At first glance, Robert Deluce seems an unlikely giant killer. The founder and chief executive of Toronto-based Porter Airlines stands shorter than many of the retro-uniformed flight attendants working his airplanes, and his small-town Ontario mannerisms—unfailingly polite with a tendency to ramble—are about as far away from Bay Street big shot as you can get.
On a recent afternoon, he ambled through the departure lounge of Porter’s terminal at the Billy Bishop Toronto City Airport and chatted awkwardly with pilots and other staff, resembling a sort of Columbo of Canadian commercial aviation, minus the scruffy trench coat. And like the fictional TV detective, he is not to be underestimated.
Just ask Air Canada. The country’s biggest airline has unsuccessfully waged a four-year battle aimed at forcing its way back into Toronto’s tiny island airport, a 90-second ferry ride from downtown, after one of Deluce’s companies bought the airport’s terminal from the private company that previously owned it and promptly had Air Canada evicted. The shrewd tactic gave Porter an effective monopoly at the airport in the run-up to its 2006 launch, a protection that was bolstered by a deal with the airport’s operator, the Toronto Port Authority, or TPA, that guaranteed Porter the lion’s share of available takeoff and landing “slots” for more than three years. Not surprisingly, Air Canada cried foul and launched a flurry of legal actions—all of which were either withdrawn or thrown out by the courts.
This year, however, Porter’s monopoly will end and Air Canada will finally have its shot at revenge. While Porter will still dominate— with a stranglehold on the airport’s slots and a growing share of the lucrative business travel market in the busy “eastern triangle” of Toronto, Ottawa and Montreal—Air Canada’s return to the island could spell trouble for the still fragile airline as it seeks to make itself a permanent fixture on the Canadian aviation landscape.
The battle has grown increasingly personal. In addition to stealing Air Canada’s most important customers—deep-pocketed corporate types, not to mention government ministers en route to Ottawa—in its most important market (while forcing it to watch from the sidelines), Deluce has foisted other indignities on its much larger rival. A few weeks ago, it was revealed that he and his wife have spent the past two decades flying around the world on Air Canada’s dime, racking up about $10,000 a month in air fares to London, Los Angeles, Vancouver and elsewhere. The free flights, some of which Deluce says were used for business purposes, were part of a deal struck when Deluce’s family sold its interest in Air Ontario and Austin Airways to Air Canada in 1986. “There were no restrictions on what we could use the travel arrangements for,” Deluce says.
Air Canada disagreed. It abruptly cut him off last year. Now Deluce is suing for breach of contract, claiming it’s yet another effort by Air Canada to “throw Porter off its game.” He says that, before Air Canada pulled the plug, he felt like he was being treated differently than other passengers, which in the past few years included “secondary searches and anything else that might be in the neighbourhood of harassment.” An Air Canada spokesperson declined to comment.
So how, exactly, did Deluce manage to repeatedly outmanoeuvre—and embarrass—an airline whose size and dominance has helped speed the demise of a long list of failed challengers? A unique and meticulously planned business model had a lot do with it. But he also received an unusual level of assistance from the airport’s troubled operator—and, it turns out, the federal government. The big question, however, is whether he can maintain the momentum he has built in a notoriously unforgiving industry.
Prior to Porter’s arrival, the island airport was a sleepy place. Catering mostly to hobby pilots, it was served by a rickety open-air ferry and a wood-framed terminal that dated from the late 1930s.
Passenger traffic through the airport hit a peak of 400,000 annually in the 1980s and dwindled to a low of about 25,000 in 2005 as Air Canada, which had operated there since 1990, began moving more flights over to Toronto Pearson International Airport, its main Canadian hub.
Today, by contrast, the island is busier than ever. Porter now flies 20 Bombardier Q400 turboprops to nine destinations in Canada, including Ottawa, Montreal and Halifax, and four in the U.S., including New York and Chicago. Last week, it signalled that it planned to continue its expansion with the purchase of four more planes, with the option to add as many as six more. Airport traffic, meanwhile, has ballooned to between 1.2 million and 1.3 million passengers a year.
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