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May 19, 2010
Getting high on service

Clearly, one of the things that have made Porter Airlines soar has to be the fact that it is led by a man of remarkable commitment. Despite preparing to take his company public in the following days - a move that was blocked when the markets tanked again - Robert Deluce kept his engagement with the PMCQ and came to talk to a select crowd at the Marriott Hotel on a Wednesday evening.

He joked that one element that attracted him to talk to people in the pharma business is that it’s rare for him to speak to people whose businesses are subject to even more regulation than his. What he really came to deliver, though, was a warm and cogent talk that revealed how customer service and dedicated teamwork are at the heart of the Porter success story.

For those of us who delight in being able to land at the newly renamed Billy Bishop Toronto City Airport on the island just minutes from downtown Toronto, it seems as if Porter’s been around for a lot longer than a mere four years. Of course, Air Canada served the island too, but not nearly as well and its ridership plummeted through the years. Porter has become the third largest scheduled carrier in Canada, flying 20 Bombardier Q400 aircraft into Canada and the US. The aircraft itself is a major element on the positive side of the ledger. It’s fuel efficiency and reliability actually assured Porter’s success when oil prices spiked. Porter can fly profitably with a 49% load-factor. The competition has to sell 70 to 80 percent of capacity to break even. In 2009, the company flew over 900,000 passengers and generated over 150 million dollars in revenue.

But low cost, he reminded the audience, doesn’t mean low quality. The defining factor in Porter’s appeal is service and the airline was founded on the belief that making air travel enjoyable for passengers would be a winning formula. When other airlines are nickel and diming the customer, even threatening additional charges for overhead carry-on and, yes, lavatory usage fees, Porter offers complimentary beer, wine, snacks and a straight-forward, easy-to-understand price structure. Does it work? According to the most recent Ipsos survey of business travel, 93% of customers were satisfied or very satisfied by the service - an enviable record for any service industry, an extraordinary one for the airline business.

Porter flies to 14 destinations, including Chicago, Boston and New York, and the airline hopes to be able to fly from Montreal to a number of key US destinations. Mr. Porter, the brand raccoon mascot, might become recognized quite widely through Eastern Canada and the US northeast.

“We take great pleasure in providing outstanding service,” Mr. Deluce said. Now there’s something worthy of some pause. The company derives that intangible, immeasurable thing called “pleasure” in providing service. You could hear that he genuinely believes it and that has got to ripple through the company as a whole. It’s the kernel of a business that seems poised for greater heights.

Alan Conter
alan@alanconter.com

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Have a great summer and see you in September.