Working to move mountains
The formation of British Columbia’s successful float plane operation, Harbour Air, is really quite a simple story.
November 5, 2014 By Paul Dixon
As a young boy, Greg McDougall decided he would have to learn to fly if he wanted to get to all the places in B.C. he wanted to see. His parents had purchased a cabin on a small island northwest of Vancouver and he realized that the only way he could spend the time he wanted there and explore other areas of B.C. backcountry would be to fly.
McDougall went straight into flight training after high school and then went to work as a pilot. He will tell you, when looking back, that there was never really a plan. He was flying as a corporate pilot for a forestry company when the bottom fell out of B.C.’s forestry sector and the airplanes were parked because the companies could no longer afford to operate them.
McDougall and a partner leased two aircraft and went to work. “We were two guys out of work, we had access to the aircraft and access to a dock in Vancouver harbour,” he says. “In hindsight, it was the worst possible time to start an airline with the state of the economy.” The saving grace may well have been how little he knew about running a business. It was a classic example of not knowing what he needed to know, but by starting in such terrible economic times, the two partners learned how to adapt and make it work.
A constant theme with McDougall is the people that make up the company. He is indebted to his team, who are the backbone of the organization. “I have a friend who says, ‘I’d rather be lucky than smart’ and I was lucky, but maybe I was also smart enough to have people around me who could fill in the gaps in terms of the business end,” McDougall says.
In the early days of the company, McDougall went to the bank looking for a line of credit. The bank asked for his business plan. Business plan? When they asked what security he could offer, he really didn’t have anything to put up. He went to his mother and asked her if she would back him for the bank and she said, “sure,” putting everything she owned on the line.
“I never thought about what would happen if I couldn’t have paid it back, there was just a belief that nothing would go wrong,” he says. “It’s a measure of how naïve we were in running a company and the things that we did worked.”
Harbour Air survived its first few years largely by providing service to what remained of the forestry industry, but a byproduct of the recession of the early 1980s created a shift in the focus of B.C.’s economy. Tourism that focused on the rugged west coast started to expand, especially fishing lodges which were added to Harbour Air’s customer base. Vancouver’s EXPO 86 put the entire province on the worldwide tourist map and created a demand that float planes could service that was outside their traditional business model. As time progressed, opportunities arose that had to be acted on.
“We did what we needed to when we needed to,” McDougall says, “and a lot of the moves we did make and will continue to make are because if we don’t do it then someone else will.” Harbour Air has grown its fleet and consolidated its routes by acquiring other operators as the opportunities presented themselves.
For example, when Trans Provincial Air Lines went bankrupt in 1993, purchasing the assets allowed Harbour Air to move into the North Coast and Queen Charlottes at the same time the fishing lodge business was expanding. Buying West Coast Air in 2010 was another move that had to be made, as was Whistler Air in 2012. The key to buying Whistler Air was the deal included the dock on Green Lake, the only seaplane dock in Whistler and there’s not much chance there will ever be another one.
Managing growth prospects
Some 33 years since first taking to the skies, Harbour Air has grown to be the largest seaplane airline in the world, a fleet comprised of 21 DHC-3 Single Otters, two DHC-6 Twin Otters and nine DHC 2 Beavers. It’s an impressive lineup, but it was McDougall’s resolve to change the corporate culture that has taken the company to where it is today.
“The one thing we did put some thought into, and it was out of necessity, was changing the safety culture in our business.” To McDougall, this was pivotal to the success of the company, transforming an unsophisticated business from the old bush pilot mentality and building the business to where it is now accepted as a regional commuter airline. It had to be done.
“There were a lot of accidents in the business. We had a few in the early days and it was just accepted by the culture of the business,” McDougall says. “When I got into this business, the definition of a good pilot was the guy who got there on the days when no one else would.”
He says candidly that he was one of those pilots and is amazed that he survived it. “We had to take that and turn it around completely. Now, the good pilots don’t go flying when weather is bad or when the plane is overloaded. That’s what really transformed the business and took it to a place where it could expand. That was a major thing and it continues to be and we keep evolving the safety culture. We never get complacent about it and we never allow that complacent attitude creep in. We have our problems and we don’t get it right every time, but we try.”
Another big change in the business is in how pilots look at the float plane industry. Thirty years ago, for most it was their first job in aviation, a stepping stone to an airline job. It’s not the case anymore as McDougall notes. “The pilots that come to us are generally career float pilots. Pilots get to exercise judgment and they actually fly the plane versus programming a machine.”
Compared to many other float companies, it’s a stable environment with pilots knowing they will be home every night. Uniforms were adopted early on as a means of projecting a professional image – as McDougall says, “you are trying to project the image of a professional operation, and you have to look the part.”
Today, as a regional commuter airline, Harbour Air provides scheduled service to 11 communities in southwestern B.C., with the principal destinations being Vancouver downtown, Victoria and Nanaimo. Up to 2,000 passengers a day taking advantage of the downtown-to-downtown connections. The principal transportation link between metro Vancouver (a.k.a the Mainland) and Vancouver Island is via BC Ferries and their two main routes – Tsawwassen to Swartz Bay (Victoria) and Horseshoe Bay to Nanaimo. Travel time is 95 minutes, dock to dock, on both routes and you have to include the time to load and unload passengers as well. It’s a minimum of four hours from downtown Vancouver to downtown Victoria by ferry, with no delays in traffic.
Time is money as McDougall is well aware. “There are lots of people on the ferry that should be flying because of what their time is worth, they could get there a lot faster, especially if someone else is paying for their time,” he says.
McDougall mentions a recent story in a Vancouver newspaper that pointed how much money the provincial government was spending on Harbour Air between Vancouver and Victoria and laughs because he thinks the number is quite low. Flying time from downtown Vancouver to Victoria’s Inner Harbour is 30 minutes and a passenger can walk up 15 minutes before departure and buy a ticket. It’s a huge incentive for someone who has to travel for a meeting and get back on the same day.
Saving money on fares is an enticement in its own right. Frequent flyers can buy books of tickets that offer a 10 per cent discount and customers are encouraged to sign up for email alerts for seat sales on specific routes that see fares below the ferry rates. An even bolder step earlier this year was the introduction of Turbo Tickets, a $100 booklet of four standby tickets for off-peak travel on any route Harbour Air travels. That’s $25 one-way. The first subscription sold out online in less than a minute, prompting the release of a second block that sold out in even less time. It’s all part of filling otherwise empty seats and exposing people to float planes who might otherwise never try it.
Staying customer focused
Harbour Air’s strength is the broad base of customers it serves. With the provincial capital in Victoria while Vancouver is the economic engine of the province, there is a steady stream of government-related business in both directions on a year round basis, though traffic does drop off over the summer. Tourism fills that void, boosted initially by EXPO 86 and then by the 2010 Winter Olympics.
|Harbour Air survived its first few years largely by providing service to what remained of the forestry industry. PHOTO: Paul Dixon
The Vancouver Harbour Flight Centre is located on the lower level of the Vancouver Convention Centre, which hosts hundreds of conferences, conventions and social events a year. Two hundred yards east of the VHFC is the Canada Place cruise ship facility, which this year saw more than 900,000 people embark on cruises to Alaska between May and October. Victoria attracts tourists from around the world by billing itself as the last outpost of the Empire. Whistler is consistently voted as North America’s top-ranked ski resort and the irony of that is that Whistler attracts more visitors in the summer season that it does over the winter season. Serving the tourist market has become a big part of Harbour Air’s business.
Buying Whistler Air in 2012 was one of those things that had to be done. It gave Harbour Air the only seaplane dock in Whistler which translates into the only scheduled fixed-wing service into the resort. Initially McDougall saw Whistler, with its short flying season, as a challenge, but it has been a pleasant surprise, a high-value surprise. There is a huge demand for scenic flights which have a higher per-seat rate and the load factors are high. Working with other service providers such as train operator Rocky Mountaineer, is a bonus for both companies by offering a fly one-way and train one-way excursion gives tourists the best of both worlds with breath taking scenery.
Tourist flights out of Vancouver run from a choice of sightseeing flights to day trips for whale watching expeditions or the option of flying one-way and returning by bus on the ferry. There are snorkeling adventures in Nanaimo, cycling in the Gulf Islands and any one of a number of other day trips, all predicated on getting there by float plane. There’s even the Mail Run, which is just that. Hop on a flight to some of the smaller stops that Harbour Air makes and you get to go where the airplane goes on that particular day.
Broadening their horizons
The next step on the agenda for the Harbour Air Group is an expansion into the fixed-wing world with the introduction of Tantalus Air and the Pilatus PC-12. McDougall is a big fan of the Pilatus and the operation fits with his idea of identifying niche markets.
“The PC-12 hasn’t been widely used on the West Coast, though it’s been extensively used in the North and back east,” he says. “It’s incredibly versatile, with the STOL ability to operate from a 1,500-foot runway, yet it has the range and performance to fly from Vancouver to Los Angeles. It’s got a big, comfy cabin and carries a big load. They’re not cheap to buy, but they are efficient to operate.”
McDougall says the PC-12 is an aircraft that’s equally at home flying hunters into a rough strip on the Chilcotin Plateau or flying down to Hollywood for a red carpet event. The response to its first Pilatus has been so positive that they are thinking of acquiring more. Beyond that, they are looking at offering management services for private corporate aircraft.
Harbour Air has also been using the Pilatus as a land-based alternative to its float planes at times when adverse weather grounds the VFR fleet. As part of its Safety Management System (SMS), the company does not allow flights if visibility is less than two miles and 300 feet at destination or departure point. The company also doesn’t fly if wind speeds are above 25 knots.
For people who absolutely have to get there, Harbour Air has used the Pilatus and a second charter aircraft for airport-to-airport service from Vancouver to Victoria and Nanaimo when the floatplanes are tied up. It’s another layer of customer service that McDougall wants to offer. “Customer service is very important,” he says. “The passenger coming to fly with is going to meet staff who understand the passenger pays their paycheque. Our employees understand that the customer on the other side of the counter is the one that pays their salary, which seems to be completely removed in a lot of big airline operations.”
The commitment of Harbour Air’s employees hasn’t gone unnoticed in the corporate world, as Deloitte has awarded the company Platinum status on its list of of Canada’s 50 Best Managed Companies. It’s one of many prestigious honours over the years.
“Surround yourself with enough good people,” McDougall says, “and they will keep all the bad things out. You’ve got to know how to get those people and you have to have the ability to assess who the good people are, but once you have enough of them you’re in a good place because the people who aren’t the right people won’t survive in an environment that has a lot of good people.
“This company is full of really good people. We have three fellows that have been with us for more than 30 years, many that have been here over 20 years and then many, many that are past 10 years. It’s amazing how they have stayed. We’re proud of what we’ve built here and I’m proud of the people”