Raise the Hammer
Back in 1986, Air Canada bought out Robert Deluce's family businesses of Austin Airways and Air Ontario. Part of the deal involved unlimited lifetime first class Air Canada tickets for Deluce and his wife. Sweet.
To date, Deluce has apparently used an average of $11,000 per month of Air Canada services, mostly for business and occasionally for pleasure, according to Deluce himself. Problem is, Air Canada unilaterally reneged on their contract last year, so Deluce is now suing them for $5 million or reinstating the passes.
Air Canada foolishly assumed that Deluce would be flying for pleasure to vacation destinations into his retirement, and failed to attach any conditions to the offer. Instead, he began building new rival Porter Airlines on AC's tab, which has got to sting a little.
On paper, Deluce is completely right and Air Canada is the deadbeat dad in the deal. But the optics conflict with that legal conclusion.
Porter Airlines has been a bee in Air Canada's bonnet, due mostly to competition on short-haul flights to Ottawa and Montreal. Porter has the advantage of flying out of Toronto's island airport, which until now has been off limits to competitors.
Now I like Porter (but not their ads, which suck eggs). Porter uses Canadian technology in their Bombardier Q400 turboprops, one of the quietest and most efficient passenger aircraft made. Also, they are competition for the big guys and competition is good.
Porter and AC have sparred endlessly over preferential treatment on the island airport, and to be honest there are good reasons for no airline to be there, due to noise and pollution in a quiet residential natural area. So Porter's monopoly with the regulators is already sweet and a little bit deviant from a level playing field.
But Bob, you are so lame in being the CEO of a supposedly proud and competitive company, by personally flying the hell out of your chief competitor.
That is so pathetic. Grow a spine.
By bigguy1231 (registered) | Posted July 23, 2010 at 21:02:26
Sorry Ted but I gotta disagree here. Robert Duluce was interviewed on the radio the other day and was asked why he used AC when he owned his own airline. His first response was because thats what AC agreed to contractually. Then he went on to explain that he only uses AC for routes that his own airline does not cover. Mostly long haul international flights. There was no distinction made in the contract between business use and personal use.
By mystoneycreek (registered) - website | Posted July 24, 2010 at 09:11:24
Hmm...
What a fascinating issue, what a great discussion. It's got some elements of propriety, it's got some aspects of 'Big Business', it's got a little streetfight, a little 'gentlmen's agreement'...
When I imagine where this discussion should be held...automatically the image of a tableful of 'participants', jugs of beer and boatloads of chicken-wings comes to mind. LOL
I especially appreciated the points that bigguy1231 brings up; I love it when more information is revealed, when what seems to be the entire story...isn't.
Looking forward to seeing not just how all this plays out in court...but what commenters here have to say.
Oh; can I get a basket of fries, please...?
By Robert D (anonymous) | Posted July 24, 2010 at 10:04:51
Chances are, if they didn't agree to the free travel, he would have asked for a higher price for his airline when Air Canada bought it.
Is he getting more than Air Canada bargained for? Sure he is. But then again, it would have been up to large corporate Air Canada and their team of lawyers to ask the tough questions and impose limits on the contract. They really dropped the ball on this one.
By Ancopa (registered) | Posted July 24, 2010 at 16:16:46
How is it pathetic that he uses the services entitled to him by contract? This article is more pathetic than Robert Deluce ever could be.
By Ted Mitchell (registered) | Posted July 24, 2010 at 21:47:56
interesting comments.
i guess some think that if it's legal, ethics and optics are irrelevant. you are scary.
however, I think that any capitalist with any semblance of an Ayn Rand character in them would rather chop off their right arm than do what Deluce is not embarrassed to do.
By unionmann (anonymous) | Posted July 25, 2010 at 00:08:55
go for it mr. deluce !!
a deals a deal. try breaking my labour contract
air canada deserves everything it gets!!
and to you mr. mitchell... get a life... don't give up your real day job... methinks you are working too hard and clouds are forming in the cranium area
frankie
By Ancopa (registered) | Posted July 25, 2010 at 07:31:55
Okay, lets break this down. In terms of optics, this fits perfectly with Porter. Porter has long been the little airline that could, sticking it to the major international carrier. Their CEO made a golden deal with Air Canada back in the day, and he continues to reap those rewards. The CEO of the company sticking it to Air Canada is sticking it to Air Canada.
And ethics? Seriously? What's unethical is Air Canada reneging on their contract.
Sorry Ted, but you are way out in left field on this one.
By No Porter (anonymous) | Posted July 25, 2010 at 21:25:10
$11,000 a month? Sounds like Deluce abused this privilege and Air Canada had every right to reneg on the deal, IMHO. Let Deluce take them to court and try to win it back.
Good luck on that.
I agree that flying Air Canada just makes Deluce look pathetic, in that he obviously does so with some kind of axe to grind. He runs an airline that only flies to certain destinations-- so what kind of business does he have in cities where his airline doesn't go? Especially enough business that could justify 11,000 a month? Hogwash.
I also agree that the noise and pollution is a burden on the neighborhood and the natural surroundings of toronto Islands and the waterfront. Porter and Deluce's arrogant insistence on building a busy commuter airport flies in the face of doing what's right for the city's waterfront, and for the residents of the neighborhood.
Deluce has been handed the island airport on a silver platter. They're in bed with a corrupt federal agency, the Toronto Port Authority, that has propped up this fledgling airline by funnelling millions of taxpayer dollars into it. Porter wouldn't have survived without the favours of the TPA and their federal cronies. And it still barely gets by. So I would hardly call it a worthy competitor or rival to an international airline like Air Canada.
By bigguy1231 (registered) | Posted July 25, 2010 at 22:47:49
"$11,000 a month? Sounds like Deluce abused this privilege and Air Canada had every right to reneg on the deal, IMHO. Let Deluce take them to court and try to win it back. Good luck on that."
It is not a privilage. It was part of a legal contract. There were no limitations placed on how or when he could use the service.
By mystoneycreek (registered) - website | Posted July 26, 2010 at 13:19:13
Whoa.
Hang on a second.
People are throwing around this $11,000 figure as if we're talking Economy flights. He's a CEO. He flies Executive Class.
Keeping in mind we're talking flights to locations that Porter does not service, perhaps such as Los Angeles, London, Florida, Paris...we're talking a minimum of $2,000 per flight, often double this. EACH. (Don't forget his wife.)
So maybe this is six flights a month, maybe just two.
An entirely different kettle of fish.
Not that this touches on the 'ethics' debate...
By VernonMa (anonymous) | Posted May 08, 2014 at 05:24:11
please delete please delete
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