BC Business
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Greg McDougall is running late, delayed by a traffic jam in downtown Vancouver. The 50-year-old president of Harbour Air Ltd. isn’t happy about it. “I don’t like the city much,” he grumbles, wheeling his black Toyota truck toward his Richmond headquarters on Sea Island near the Vancouver International Airport’s south terminal. Crowds, gridlock and the urban rattle and hum are all things that McDougall could live without.
He tries to keep them at bay by maintaining two residences: a home in Pemberton and an apartment in Vancouver. Lean and fit, he is wearing a black chambray shirt, green corduroy pants, athletic shoes and impenetrable black sunglasses. It may not be typical working apparel for a corporate president, but then McDougall isn’t a typical corporate president. First, there are the more than 8,000 hours of flying time on his resumé. Second, there is his extreme hobby: competing in the world’s toughest mountain-bike races. Third, there is the improbable location of his office: directly above the Flying Beaver Bar and Grill. “When we opened, there were some concerns that the name might be too controversial,” admits McDougall, “but a little controversy didn’t strike me as a bad thing for a new bar.” The Beaver, of course, is the classic Canadian bush plane with which McDougall founded Harbour Air in 1981, flying charters for the lumber industry. He has since built that modest backwoods enterprise into the largest all-float-plane airline in the world, with 32 aircraft operating out of eight bases along the B.C. coast, from Vancouver to the Queen Charlotte Islands. Although the backbone of Harbour Air’s business today is shuttling commuters on flights back and forth between Vancouver, Victoria and Nanaimo, the company also caters to the tourist market, offering package tours into B.C.’s rugged wilderness to view sights as spectacular as grizzly bears in the Khutzeymateen Valley, the hanging glaciers of Mount Mamquam or orcas in Haro Strait. In peak season, Harbour Air’s sturdy fleet of de Havilland Beavers and Turbine Single Otters record 145 departures a day. All told, the company transports more than 300,000 passengers a year. Combining your company headquarters with a pub is a unique idea, and it initially met with bureaucratic resistance. “I had to fight with the city three years to get a liquor licence,” says McDougall. But the effort paid off. Since opening in 1995, the Flying Beaver has become a popular hangout for the 4,000 people who work at the airport’s south terminal, as well as Richmond residents. The $1.5-million restaurant has the ambience of a lodge, with a large stone fireplace, lobster traps and assorted airplane memorabilia, including a complete engine from a de Havilland Beaver. The place offers daily drink specials and live music on weekends, but the major draw is the stunning view of the Fraser River, its assorted birdlife and the float-plane traffic available through the large windows. Prime viewing time is said to be an hour before sunset when the company’s aircraft, prohibited from flying at night, all return to the roost. Harbour Air’s ticket counter is in the lobby outside the restaurant, next to a gift shop that sells snazzy airline apparel. From here, passengers stroll down a wooden gangway to the dock to board their plane. There are no X-ray machines, no metal detectors and no scowling security guards. The atmosphere is relaxed, inviting and, in an age where conventional air travel is often an exercise in tedium, completely refreshing. The ease and speed of this type of air service (35 minutes between the Island and the Mainland as opposed to two hours on the ferry) has made it remarkably popular, especially among the “time is money” business crowd. It’s estimated that more than 300,000 people “hop the pond” between Vancouver and Vancouver Island each year. Harbour Air, which runs 240 one-way flights a week for $115 on its Turbine Single Otters, competes with two other companies for these frequent fliers’ business: West Coast Air Ltd., which offers more than 200 flights on its Twin Otters for $119, and Helijet International Inc., with 170 to 200 flights per week on its deluxe 23-seat Sikorsky helicopters at $189 per trip. Rick Baxter, president of West Coast Air, whose company has shared a terminal with Harbour Air in Vancouver’s Coal Harbour for the past several years, voices a grudging admiration for his rival: “I have a lot of respect for Greg. He’s a very competitive guy and he has a good product.” McDougall believes that packaging has been the key to his company’s success. “I recognized early on that the difference between being successful and failing in this enterprise was presenting a sophisticated product. The typical image of a float-plane pilot with a ratty T-shirt, a cigarette hanging out of his mouth and a plane that needs painting just wasn’t going to cut it. We set out to put a professional polish on the operation. We had our personnel wear uniforms and name tags and we really focused on customer service.” Harbour Air’s inducements include complimentary Internet kiosks; coffee and pastries; newspapers; leather seats and expanded panoramic windows on its planes; and free shuttle service between the Vancouver airport and Harbour Air’s Sea Island base, as well as to hotels and office buildings in downtown Vancouver and Victoria. In a bid to attract more business from the Fraser Valley, Harbour Air opened a new base in Langley in November 2006, from which an amphibious Turbine Single Otter now ferries passengers three times daily from Langley Airport to the inner harbour in Victoria. Attention to detail and customer service are a reflection of McDougall’s personality, according to Mark James, the food and fashion entrepreneur. James, who has known McDougall for 15 years, describes him as “a very focused, determined and meticulous individual. Greg has high standards and he surrounds himself with high-calibre people.” One example occurred during a flight from Victoria to Vancouver on November 25, 2006, when a snowstorm caused pilot Darren Malcolm to set his Otter down between a Tsawwassen coal plant and the BC Ferries causeway. Malcolm kept the heat on for the passengers, taxied to the beach and then jumped into the water to wait for the company’s shuttle van. When it arrived, he piggybacked each of the 13 passengers to shore so they wouldn’t get wet. Although McDougall has the prototypical laconic style and stoic calm of a West Coast bush pilot, his cultural upbringing was a mixture of influences. Although he is Canadian, he was raised in Ojai, California, near Santa Barbara, where his father taught at a private boarding school. The family spent each summer at a cottage on an island off the Sunshine Coast that was accessible only by air or by water. The experience instilled in him a love of the outdoors and aviation. “I got to fly on some seaplanes and got to know the pilots,” McDougall recalls. “I think that’s when I first decided I wanted to fly.” After completing high school, McDougall earned his pilot’s licence at Pitt Meadows Airport. His mentors there helped land him his first job: piloting a Cessna 185 float plane for the forest industry in Fort Simpson, a town of 1,200 in the Northwest Territories. After his northern baptism, he was hired by Victoria-based Hyack Air Ltd., where he flew for several years. Later, he flew as a corporate pilot for a land-development company. But when a recession hit in 1980, McDougall lost his corporate job. The following year, he and another out-of-work pilot, Cliff Oakley, decided to go into business for themselves. They leased an old floating office in the Vancouver harbour and a couple of Beavers and started Harbour Air. “We had no business experience and not much of a business plan,” admits McDougall. The pair began flying charters for the forest industry. In the summers they expanded their client base by flying fishermen into remote B.C. fishing lodges. [pagebreak] A year later, Vancouver Island developer Keith Fraser, who also owned a plane, joined the firm as a third partner. But shortly after, a personality conflict developed between Oakley and his two partners, and Oakley was bought out in a messy legal dispute. The company struggled along until 1986, when it acquired nine single-engine aircraft from AirBC Ltd. At the time, Jimmy Pattison [the owner of AirBC] was trying to develop a regional carrier. “Seaplanes didn’t really fit with the company’s objectives, notes McDougall. “It was a pretty good deal for us.” Harbour Air also acquired AirBC’s Sea Island terminal. As one of the conditions of the deal, however, Harbour Air could not fly the lucrative Vancouver-Victoria shuttle, which was one of AirBC’s routes. The agreement with AirBC proved timely for Harbour Air because it coincided with Expo 86 which, McDougall says, “changed the market by exposing Vancouver to the world as a travel destination. We noticed a huge upsurge in visitors. B.C. fishing lodges suddenly became a popular destination and we targeted that market.” In 1989, Harbour Air ferried 17,000 sports fishers to lodges up and down the coast. The rest of its flights carried 36,000 passengers, including 8,000 passengers flown on twice-daily scheduled services out of Vancouver to the Gulf Islands and Vancouver Island points. Fraser left to open a fishing lodge and McDougall entered into a partnership with Kenn Borek, who owned Kenn Borek Air Ltd., a Calgary company that chartered and leased planes for scientific expeditions, oil exploration, air ambulances and United Nations peacekeeping missions. For McDougall, the partnership meant guaranteed access to aircraft, specifically Twin Otters, whose larger seating capacity made them ideal for servicing the tourist industry and fishing camps in the summer. Harbour Air expanded throughout the 1990s. In 1992, the company leased a base in Victoria’s harbour and introduced sightseeing flights out of the capital. A year later, it bought Trans-Provincial Airlines Ltd., which operated from Prince Rupert. Bases were established on the Queen Charlotte Islands at Sandspit and Masset, with the northern regional headquarters remaining in Prince Rupert. By the mid-1990s, Harbour Air was the largest charter outfit in the province, but McDougall had his eyes on a bigger prize: a scheduled service between B.C.’s two largest cities. The opportunity arose in 1995 when AirBC put the for-sale sign on its five float-equipped Twin Otters and its Vancouver-Victoria harbour operation. Harbour Air submitted a bid, but the sale went to West Coast Air, a new entity founded by Allan Baydala, who had been AirBC’s CFO. West Coast Air began flying the Vancouver-Victoria route in January 1996, in hopes of luring business away from Helijet, the dominant carrier at the time. But McDougall, who was already flying 12,000 tourists a year on charter flights between Vancouver and Victoria, decided to make his own assault on the market. When its no-compete clause with AirBC expired in May 1996, Harbour Air began offering 20 one-way flights a day between Vancouver and Victoria on 17-passenger Twin Otters for $93, far less than Helijet’s $139 fare or West Coast Air’s at $120. Scheduled service and sightseeing tours had replaced charters as the major components of Harbour Air’s operations, and McDougall soon increased his airline’s presence in the commuter market by offering flights between Vancouver and Nanaimo, in competition with Baxter Aviation Ltd. In 2003, Harbour Air moved to make itself a bigger player in Victoria’s tourism industry, buying Cooper Air Inc., a float-plane charter company, and its “flightseeing” business. The deal included Cooper’s two de Havilland Beaver float planes. Harbour Air also bought Victoria’s floating Marine Adventure Centre from Richard Cooper and his partners. The waterfront centre, which opened in 1996, now incorporated Harbour Air’s offices and dock, the Blackfish Cafe and whale watching, kayaking and harbour tour businesses. The consolidation of Harbour Air’s tourism assets coincided with a strengthening of McDougall’s personal control of the company. When Kenn Borek died in a car crash in 2002, McDougall became the sole owner of the company due to a key-man insurance agreement between the two men that stipulated if one died, the other would have the right to acquire all of his partner’s shares. Always open to new challenges in both business and in his personal life, McDougall, who is an avid backcountry skier, recently became serious about competitive mountain biking. In April 2006, to celebrate his 50th birthday, he completed the Cape Epic, an eight-day 921-kilometre stage race across South Africa that has a 25-per-cent attrition rate. Later in the year, he entered the world’s most difficult mountain-bike race, Costa Rica’s infamous La Ruta de los Conquistadores, a three-day stage race that climbs more than 9,000 metres and spans 124 kilometres a day. “It was brutal beyond my wildest expectations,” remarks McDougall. And what was the reward for all this pain? “You just feel an amazing feeling of accomplishment once it’s done. If you have to ask why, then you don’t have the gene. You have to have that gene to understand it.” His next goal is to complete the final two of the world’s four toughest mountain-bike races: the TransAlps Challenge in Europe and the TransRockies Challenge in Alberta. On the business front, McDougall has been exploring new markets overseas. In 2004, he hooked up with Steve Earle and Mike Patellis to form AirSea Lines International Inc., a privately financed company whose ambitious goal is to revolutionize travel in Greece by using seaplanes to connect its archipelago of islands. McDougall, who is a director and founding shareholder in the company, contributed his expertise to the planning of the project and leased AirSea its original plane as well as supplying ongoing maintenance help. In September 2004, AirSea began using two Twin Otters to ferry passengers from Corfu to Paxos, making it the only seaplane operation in all of Europe. Today, it flies to eight destinations: seven in Greece’s Ionian Islands and one in Italy. Earle claims the Greek market has capacity for more than 100 aircraft, and AirSea plans to increase its fleet of three planes to 25 in the next five years. “There are 200 populated islands in Greece and only 27 airports,” he says, noting that most of the islands currently depend on an inefficient ferry service. The Greek venture may only be the beginning for AirSea, which is now investigating the possibility of expanding into the U.K.. “We are studying domestic passenger flights from lakes, rivers and harbours across the U.K. and can foresee up to 50 AirSea sea- planes operating in the U.K. in time for the 2012 London Olympics,” says Earle. Meanwhile, there are several other foreign options that McDougall may pursue, such as using seaplanes to transport cruise-ship passengers on day trips. In fact, Harbour Air recently formed a partnership with people in Malta and will be flying a single-engine Otter out of the Mediterranean island’s cruise-ship terminal starting in April. “We’re always on the lookout for new opportunities. Now that we’ve got the model, there’s no reason why it shouldn’t work in other places,” notes McDougall. Although the ultra-competitive McDougall enjoys pushing the envelope in his business life and in recreational pursuits, he is a traditionalist in other matters. His 22-year-old daughter is following in her father’s flight path by becoming a pilot, with an ambition of ultimately flying commercial jets. McDougall himself continues to fly, although no longer with a load of paying customers; he took himself out of the Harbour Air rotation about eight years ago. But he still enjoys the freedom and exhilaration of punching holes in the clouds. Whenever time permits, you will find him up in the blue yonder, heading back to the remote hideaway where his infatuation with aviation began – the family cottage on Nelson Island. “For me living in B.C. is all about not living in the city,” says McDougall. “That’s why I started flying in the first place. Just to get away from it all and be out in the wilderness.”