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Flying Forward: How Connect Airlines is Changing Regional Aviation · Behind the Business

• 0:00
  Ian McLean: Welcome to another episode of Behind the Business, presented by Gore Mutual.
• 0:04
  Ian McLean: I'm your host, Ian McLean, president and CEO of the Greater Kitchener Waterdoo Chamber of Commerce.
• 0:09
  Ian McLean: This podcast is recorded on the traditional territory of the neutral Anishinabe and Haudenosaunee peoples.
• 0:15
  Ian McLean: Each week I sit down for candid conversations where we go beyond the boardroom and behind the business to uncover the real stories of Waterdoo Region's business community.
• 0:25
  Ian McLean: Today we're taking you into the cockpit of the global aviation sector with someone who has not only lived its evolution but shaped some of the industry's most defining moments.
• 0:42
  Ian McLean: Our guest is John Thomas.
• 0:44
  Ian McLean: He's the CEO of Waterloo Region's newest airline, Connect Airlines.
• 0:48
  Ian McLean: John is a globally recognized aviation strategist, former CEO of Virgin Australia Airlines, and the advisor behind major transformations at Delta, United, British Airways, Qantas, and more.
• 0:59
  Ian McLean: He's launched airlines, led billion-dollar turnarounds, engineered game-changing joint ventures, and even created the ancillary revenue model that transformed how modern airlines operate.
• 1:09
  Ian McLean: Today we're unpacking the journey behind his extraordinary career, the early days of entrepreneurship, the principles he applies when fixing complex businesses, what the future of air travel looks like, and what regions like Waterloo Region can expect and think about when it comes to connectivity and competitiveness.
• 1:28
  Ian McLean: It's a rare chance to get a truly global perspective on leadership, innovation, and building resilient organizations for someone who has influenced the sector at every altitude.
• 1:38
  Ian McLean: So join me as we go behind the business with John Thomas of Connect Airlines.
• 1:43
  Ian McLean: Well, John, we're excited to have you here in Waterloo Region.
• 1:46
  Ian McLean: I know you were, you know, here recently, and thanks for sticking around for a few minutes or a few days to uh to have some conversation with business leaders, but uh to come on and do an episode of the podcast.
• 1:57
  Ian McLean: I really appreciate it.
• 1:58
  Ian McLean: Great, thanks, Sam.
• 1:59
  Ian McLean: So um we had our our Vision One Million event and John Torrey uh Jr.
• 2:06
  Ian McLean: from Pivot Airlines, and you were uh joined me on stage, and we we you know um you told the story of Connect Airlines, why it's based here, the connection with Pivot being the operation side of the airline, which is a which is a great Canadian story, based here at Waterloo Region.
• 2:24
  Ian McLean: All of those things are are really important.
• 2:26
  Ian McLean: So we'll get to those things, but I I'm fascinated because you know, for those that are listening, they won't see that he says he's been in the airline industry for 50 years.
• 2:36
  Ian McLean: He does not look like he's old enough to have been in business for 50 years, but you've had a front row seat to global aviation.
• 2:45
  Ian McLean: Um and I I the story is fascinating.
• 2:49
  Ian McLean: Tell us what really what sparked your interest in aviation and what um you know what got you started, when you got started, and what's kept you anchored in the sector?
• 2:58
  Ian McLean: Because I I think as you've said a number of times, the airline business is not an easy one, you know, to be successful at.
• 3:04
  Ian McLean: But tell us how you got started, what sparked your interest.
• 3:07
  John Thomas: Yeah, thanks, Ian.
• 3:08
  John Thomas: Um well, I mean, I uh I was born in a a little country town in Australia called Wagga Wagga and uh moved to uh moved to Sydney uh at a young age, but still had a lot of interest in the uh in the country.
• 3:23
  John Thomas: And I I used to fly a lot back and forwards, and to me flying or airlines was all about connecting people.
• 3:32
  John Thomas: I mean, I there was we used to have a property down in in the country, uh my mother used to go and look after that property, so I'd literally be back and forth.
• 3:42
  John Thomas: Back and forth.
• 3:43
  John Thomas: And so when the um when the when I got old enough, uh actually between uh high school and uh and university, where I was still just uh just under 17, I managed to uh to get my private my private pilot's license, and um and really the rest is history, and and it really is the it's the joy of connecting people, and that's really um it's really the thing that um that keeps me uh it keeps me going on it.
• 4:14
  Ian McLean: I mean, now uh we were talking before we we went on, and and I just came back from Australia, New Zealand, and I and uh you said when you come to Canada you kind of feel like you're home.
• 4:22
  Ian McLean: Yep.
• 4:23
  Ian McLean: And when I went to Australia, I said, other than driving on the wrong side of the road, it felt a lot like Canada.
• 4:29
  Ian McLean: Yep.
• 4:29
  Ian McLean: And and by that, I mean Australia is a very coastal country because all the big cities are around the water.
• 4:35
  Ian McLean: Yep.
• 4:35
  Ian McLean: Uh it's not quite the same in Canada, but we're a country of five or ten, I guess, big cities, and then a lot of small rural, a lot of lot of country.
• 4:45
  Ian McLean: And that's very much like Australia.
• 4:46
  Ian McLean: So the connecting of people is there's lots of people that that need to get to back and forth to where their their their their home is, if you will, or where their roots are.
• 4:56
  Ian McLean: Uh and so I I found that to be, you know, when as you were talking about that in our session, I thought that that connection um and connecting people throughout the a a large um urban, like a large footprint of a country and and having to get to those big centers is uh is is very similar to what we find in Canada, which takes us to talk about that first regional airline.
• 5:19
  Ian McLean: You were I think you said you were 19 when you first started your first regional airline.
• 5:24
  Ian McLean: Talk a little bit about what that looked like.
• 5:27
  Ian McLean: You know, like I like getting financing, doing the operations, like getting an airline, all very difficult things.
• 5:34
  Ian McLean: Um, how did that happen?
• 5:35
  Ian McLean: How did that how did you make that happen?
• 5:38
  Ian McLean: And what stands out for you as formative lessons?
• 5:42
  Ian McLean: Like as you've been you stuck with it, so you you didn't quit after what what what stands out for what did you learn from those early entrepreneurial days?
• 5:51
  John Thomas: Right.
• 5:51
  John Thomas: So so Ian, it was uh again communities that didn't have air service and um they needed air services.
• 5:58
  John Thomas: And as you say, um Australia is very similar to Canada, where you have the economic heartland that drives a lot of economic activity, but in most of these regional centers, you just don't have enough people to support sort of a regular airline service.
• 6:16
  John Thomas: So it's all about um how do you how do you make sure you don't put too much capital because the service can't support a lot of capital, um, and do it in a way that meets the needs of the uh of the of the local community.
• 6:32
  John Thomas: So um so we started this airline, it was called T Thomas Air Transport Systems.
• 6:36
  John Thomas: We had to put the T at the front because there was a big transport conglomerate called TNT that we couldn't be couldn't uh couldn't be too similar to.
• 6:45
  John Thomas: And we started a service uh that went from um went from Sydney to basically the southwestern region of New South Wales that included country towns like Hay, Bowranold, uh, and Miljura.
• 6:59
  John Thomas: And then um, and and it was and the the um the Sydney to Meldura service um was actually very uh very important because this was a big rural center actually on the border between New South Wales and Victoria.
• 7:15
  John Thomas: But Miljura was sort of like it was sort of basically um, you know, closer to go to Adelaide or to Melbourne.
• 7:23
  John Thomas: And so what happened there was good service between Melbourne and uh and Mildura, but there are a lot of people who wanted to get to Sydney.
• 7:29
  John Thomas: So actually putting in the direct service rather than them having to fly to Melbourne and connect to uh to get to Sydney.
• 7:37
  John Thomas: So um, and then in terms of uh in terms of um how we actually pulled it off, we we uh um we uh leased aircraft.
• 7:47
  John Thomas: Uh I had a very strong financial supporter who happened to be my father.
• 7:51
  John Thomas: It happens with lots of entrepreneurs and lots of people.
• 7:54
  John Thomas: Yep, yep.
• 7:56
  John Thomas: And um and because I was a pilot, I actually flew the line.
• 8:00
  Ian McLean: Yep.
• 8:00
  Ian McLean: Well, like all small businesses, you do everything.
• 8:02
  John Thomas: Chief cook and bottle washer.
• 8:04
  John Thomas: Yep, yep.
• 8:04
  John Thomas: And and and also again, uh the times get it where passengers would get on.
• 8:10
  John Thomas: And one of them said, You're not old enough to fly this plane, are you?
• 8:14
  John Thomas: And I said, Absolutely.
• 8:16
  Ian McLean: So when you think back on those things, and as opposed to an aha moment, what's your uh maybe a sliding door as you're closing, you know, in in airport or airline parlance, what were the decisions or risks that fundamentally shifted the the trajectory of your of your uh of your journey?
• 8:34
  Ian McLean: Because you must have got to some points and said, go, no, go, whatever, what are the you know, do I keep, you know, do I make this investment?
• 8:42
  Ian McLean: Do I do because there's risk in in every business along the way, doesn't matter what you're doing, you get to points and you have to kind of say yay or nay, and what what's the risk profile?
• 8:54
  Ian McLean: Uh talk about some of those.
• 8:55
  Ian McLean: There must have been a number of those as you're as you're growing that business, and then I'll uh maybe we can we can talk about that in in context of your latest venture.
• 9:03
  John Thomas: Right, right.
• 9:04
  John Thomas: Well, from a from a personal perspective, um the the sliding door was uh I when I started to fly, I wanted to pursue a professional career in in aviation.
• 9:16
  John Thomas: So um I applied to uh cadet ship uh with Qantas uh and got through, but unfortunately failed the uh medical uh medical exam because of poor eyesight.
• 9:28
  John Thomas: So that to me that was a obviously at the time uh was heartbreaking, but it actually said, you know, you can be part of aviation without necessarily flying.
• 9:40
  John Thomas: Um there's a lot more interesting things that you can do, and hence that sort of put me on more of the, or perhaps I should be, you know, do more of the business side on the uh on uh on aviation.
• 9:53
  John Thomas: And then the the the second one was really when we when we had this uh regional airline going in Australia, um it was interesting because the government down there changed the regulations where in the old days uh you could actually fly all these services with just one pilot.
• 10:11
  John Thomas: And you know, the economics again, economics are always marginal, but just like what has happened time and time again for the airline industry is government just sort of brushed a new regulation in that required on a eight-passenger aircraft.
• 10:28
  John Thomas: Two pilots.
• 10:29
  John Thomas: Two pilots.
• 10:30
  John Thomas: And it just killed the economics.
• 10:32
  John Thomas: And and the thing was, and that was really the epiphany for me, was, and something that I'm actually quite proud of is we we were in the process of actually um investing another, at the time it was about a half million dollars, on actually buying new aircraft to better serve the regions.
• 10:49
  John Thomas: But when this impl uh this requirement on the two the two pilots came in, we said no, the economics just don't stack up.
• 10:56
  John Thomas: So we literally in we literally, as I say, we were one of the few airlines in the world to actually leave the leave and and stop flying by our own volition because we said the numbers just don't stack up.
• 11:10
  John Thomas: Well, so in in uh And and and and sorry, so the the that that to me has made it you've got to have a you've got to have a sustainable business model and and and you can't kid yourself.
• 11:27
  John Thomas: I mean a classic example um is is what we're trying to do here in the region is um you know you get you get these new carriers that come in and they say, oh, you know, everyone's tired of paying all these high fares.
• 11:41
  John Thomas: Well, the fares are high because the costs are high, yeah, and the costs really are high because of government taxes, fuel, et cetera, et cetera.
• 11:49
  John Thomas: But they come in and say, oh, well, you know, we can take all of this market and, you know, all of these other people are idiots in the industry and we'll be successful.
• 11:59
  John Thomas: Well, guess what?
• 12:00
  John Thomas: If you actually looked at their business model, it just just doesn't work.
• 12:06
  John Thomas: Whereas we look at what we're what we're uh proposing to do here in the region is we're not about saying we're gonna sort of come in and everyone, if we come in, you know, we're gonna go to the city.
• 12:18
  Ian McLean: You're not saying you're the ultra low-cost carrier.
• 12:19
  Ian McLean: No, no, no, no, cheaper.
• 12:20
  Ian McLean: No.
• 12:20
  Ian McLean: You got to say a reliable service that gets you where you want to.
• 12:24
  Ian McLean: It's it's a you know uh the experience isn't as painful.
• 12:27
  Ian McLean: Because air travel has become painful.
• 12:29
  Ian McLean: Yeah, people hate traveling.
• 12:31
  Ian McLean: I mean, they like where they're going, they don't like the part in between.
• 12:34
  Ian McLean: Trevor Burrus, Jr.
• 12:35
  John Thomas: The experience.
• 12:35
  John Thomas: Absolutely, absolutely.
• 12:37
  John Thomas: So um so this is all about how do you so so here in particular, and this is the thing that gets me so excited about the region, is we're not here to create a market.
• 12:48
  John Thomas: The market already exists here.
• 12:50
  John Thomas: There are 3.4 million passengers a year coming out of the region.
• 12:56
  Ian McLean: At Pearson.
• 12:58
  John Thomas: No, no, no, no.
• 12:58
  John Thomas: Out of the region of Waterloo.
• 13:00
  John Thomas: The region of Waterloo catchment area generates 3.4 million passengers a year.
• 13:05
  John Thomas: That was in 2024.
• 13:07
  John Thomas: We think with the population growth that's happened in the region, it's probably closer to about 3.6 million now.
• 13:13
  John Thomas: But the problem is, and and God bless the airport, the airport's done everything possible to encourage airlines to come here.
• 13:20
  John Thomas: The problem is, given the current dearth of air services, literally 87 percent of the go to Pearson.
• 13:29
  John Thomas: Yeah, yeah.
• 13:29
  John Thomas: And that's the problem.
• 13:30
  John Thomas: So what our view is we're not here to stimulate the market or grow the market, etc.
• 13:36
  John Thomas: All we're saying is if if we have a stronger customer value proposition than what exists today, then, you know, we we we can tap into those 3.4 million million passengers.
• 13:51
  John Thomas: So our plan over the next, say, five, so the current, as I say, the current capture rate at the airport is about 13 percent of the total market.
• 14:01
  John Thomas: So it's about 400,000.
• 14:02
  Ian McLean: People that are flying in this catchment area, only 13 percent of them are flying out of a water, and out of the out of the airport.
• 14:09
  John Thomas: So our plan has us that if we can sort of keep, you know, our plan over the next five years is we think we can grow that from um from basically again, by flying to the right destinations, we can grow that from 13 to about 50 percent.
• 14:26
  Ian McLean: Yeah, and that that that's great.
• 14:27
  Ian McLean: And there's no one that uh would that wants to get on the 401 and go to Pearson.
• 14:32
  Ian McLean: If they can avoid it, they would, but they uh they you know the it's the do we have a reliable service?
• 14:38
  Ian McLean: Because we've had airlines before, we've talked about this.
• 14:40
  Ian McLean: Um what you know American Eagle was here, it flight to Chicago, 85, 86 percent load factor.
• 14:47
  Ian McLean: Yeah, so it wasn't people weren't using it, but it's a business, and they could make more money flying that same aircraft from Akron, Ohio, I think it was, yeah, to Chicago.
• 14:56
  Ian McLean: So that's what happened.
• 14:57
  Ian McLean: Okay, so uh I because I want to keep you know, get get it focused on this.
• 15:01
  Ian McLean: The the philosophy that you the operating philosophy you bring to the business when you when you step into it is you know, so maybe go with that.
• 15:09
  Ian McLean: It's it's customer experience, it's competitive pricing.
• 15:14
  Ian McLean: I wouldn't say that you're not you're not trying to be lower it's it's it's it's fair pricing.
• 15:18
  Ian McLean: Fair pricing.
• 15:19
  Ian McLean: Yeah.
• 15:19
  Ian McLean: So so I mean those are some of the philosophies, but talk about some of the things that that you've taken from your philosophy of and your years of experience that you're bringing to to the relationship with pivot and and or connect airlines, using pivot, being based here.
• 15:33
  Ian McLean: Are all of those things some of the things you've learned as now you're upgrading?
• 15:36
  Ian McLean: Philosophy of seeing you gotta be you gotta be where your market is.
• 15:40
  Ian McLean: You know, like talk about how you're connecting those things.
• 15:43
  John Thomas: So so uh so Ian, there's a there's obviously a lot, a lot here.
• 15:47
  John Thomas: I mean, people say the airline industry is very complex.
• 15:50
  John Thomas: It's actually not complex, it's actually pretty simple.
• 15:53
  John Thomas: But here are some of the cat the critical components.
• 15:56
  John Thomas: Number one is because um you you you want to come in in the lowest risk way possible.
• 16:04
  John Thomas: So you basically get aircraft that are perhaps older aircraft, but you can still they're still perfectly good aircraft, older aircraft where the lease rates are a lot lower than getting a spank you know, brand new aircraft.
• 16:17
  John Thomas: I mean, um that that is a recipe for disaster.
• 16:20
  John Thomas: I mean, all these new airlines that come along with their brand new aircraft, I mean, put this in order of magnitude, those brand new aircraft are probably costing them something like about 300,000, 400,000 Canadian a month to lease.
• 16:35
  John Thomas: Whereas ours will be significantly, significantly below that.
• 16:39
  John Thomas: So number one, set yourself up for success by making sure that your uh your overhead costs are very efficient.
• 16:48
  John Thomas: That includes the leasing of the aircraft, the uh the corporate overhead, uh, etc.
• 16:54
  John Thomas: So number one.
• 16:55
  John Thomas: Number two is fly where people want to fly.
• 16:58
  John Thomas: I mean, serve the market.
• 17:00
  John Thomas: If you serve the market better than the alternative, guess what?
• 17:05
  John Thomas: People will come to you.
• 17:07
  John Thomas: So make sure you do the, you know, I hear constant stories of people saying, oh, we need the air service.
• 17:13
  John Thomas: And part of the issue with the air service why we didn't use it, is because they gave us the service in the middle of the day.
• 17:19
  John Thomas: And of course, you know, that's useless.
• 17:22
  John Thomas: So again, a great example here is time, you know, again, our objective is meet the needs of the business traveler and connect the region to the world.
• 17:31
  John Thomas: So, in order to meet the needs of the business traveler, right destinations, places like Montreal, New York, Ottawa, Boston, Chicago, et cetera, but do it at times of the day that actually allow people to do a day trip.
• 17:45
  John Thomas: So, you know, that means like a 6.30 a.m.
• 17:48
  John Thomas: flight out of here, uh out of uh Waterloo Kitchener to uh to Montreal gets you there at sort of like eight o'clock in the morning, and then you know, there's a return flight at 8.30 that allows people from Montreal to come to the region for the day.
• 18:04
  John Thomas: And then the return flight is in the afternoon, uh in the evening.
• 18:08
  John Thomas: So, you know, you you can do it.
• 18:10
  Ian McLean: So if you fly out at 6 30 a.m.
• 18:11
  Ian McLean: out of Waterloo region, and your return flight comes back at six or seven o'clock at night.
• 18:16
  Ian McLean: And so you say you've got a you've got a a nine or ten hour working day in in New York, can still get get back and forth.
• 18:24
  Ian McLean: You don't have to.
• 18:24
  Ian McLean: Absolutely.
• 18:25
  Ian McLean: No stress.
• 18:26
  John Thomas: You I mean, you can you can leave your house at six in the morning and be at the air in basically again, no requirement to be there an hour in advance, blah, blah, blah.
• 18:38
  John Thomas: I mean, again, one of the benefits of the airport.
• 18:41
  John Thomas: So so the next one is make regional flying great.
• 18:46
  John Thomas: The biggest benefit of regional flying is you fly out of really, really convenient airports and you couldn't ask for a better example at uh than what the Waterloo Kitchener Airport.
• 18:57
  Ian McLean: I mean, well, the the investment that Regional Council over the last decade has put in there saying they're building for the future, and we've seen the air, the service pick up, like the number of travelers, uh, it's just getting something to stick.
• 19:10
  Ian McLean: I mean, an actual scheduled airline, you know, there are some there, but uh has been the the challenge.
• 19:16
  Ian McLean: But that's those are many of those things are beyond the control of the airport itself.
• 19:20
  Ian McLean: But they made the investment.
• 19:22
  Ian McLean: So this would be a lot of people.
• 19:23
  John Thomas: To attract to attract airlines.
• 19:24
  Ian McLean: And that's what that's what attracted Connect and Pivot here.
• 19:27
  John Thomas: Yeah, yeah.
• 19:28
  John Thomas: So part of that customer experience is it's not just the airport, but it's the onboard experience.
• 19:33
  John Thomas: So so um most fi well, all 50 seaters only have one class, which is 50 seats at a 30-inch, uh 30-inch pitch.
• 19:45
  John Thomas: Well, guess what?
• 19:46
  John Thomas: What's different about Connect is that we have a premium economy uh section.
• 19:50
  John Thomas: So we'll have uh we'll have tr 12 seats or three rows of seats that'll actually be at an additional four inches of legroom.
• 19:58
  John Thomas: And I mean four inches of leg room actually makes a difference.
• 20:01
  John Thomas: So, but yeah, okay, you get the Lexra legroom, but what else does that mean?
• 20:05
  John Thomas: It means that you know you get priority boarding, priority security, et cetera, et cetera.
• 20:11
  John Thomas: But you also get a meal.
• 20:13
  John Thomas: I mean, where where do you get on a one-hour flight and you get a you get a meal?
• 20:18
  John Thomas: So, and and obviously it's not going to be a hot meal, but you know, you'll actually have a breakfast, uh, you know, breakfast box that'll be, you know, really good.
• 20:27
  John Thomas: And you, you know, it it's a better experience.
• 20:31
  John Thomas: And the other thing too that uh we're planning for, um, and and to be confirmed, but the other thing too is having the best Wi-Fi on the aircraft.
• 20:40
  John Thomas: There are no 50 passenger regional jets flying today on schedule service that have Wi-Fi.
• 20:47
  John Thomas: And we're gonna have true gate-to-gate Wi-Fi that again makes this experience better than what people get on the regular airlines.
• 20:57
  Ian McLean: When you get on most airlines in economy, uh 30 inches is a dream.
• 21:01
  Ian McLean: Yeah.
• 21:01
  Ian McLean: You would you would die and go to heaven if you had 30 inches, let alone having 34 if you're in a premium economy.
• 21:08
  John Thomas: And and and sorry, and the final component, which is probably one of the most important components, is I don't care how big you so I I spent a lot of time in the industry developing these win-win commercial partnerships.
• 21:22
  John Thomas: So, you know, working for the um the alliances, working for airlines on developing bilateral agreements.
• 21:29
  John Thomas: But my view, and again, having done this for some of the largest airlines in the world, is I don't care how big you are.
• 21:37
  John Thomas: We in this industry you need lots of friends.
• 21:39
  John Thomas: And so again, what you know, your classic startup is, oh, well, we're gonna go head-to-head with these major airlines.
• 21:47
  John Thomas: No, no.
• 21:48
  John Thomas: The whole concept around Connect is most of the major airlines acknowledge that they can't they can't adequately meet the need uh of smaller communities uh with these smaller aircraft, and they want to get out of that business.
• 22:04
  John Thomas: They really want to get out of the business.
• 22:06
  John Thomas: So we say, we're this is our core business, but we want to partner with you.
• 22:13
  John Thomas: So that's one of the other benefits of uh of again of the Connect service is that you know we're not going to have a frequent fly program because you don't want to earn points on a Kinect airline.
• 22:24
  John Thomas: I mean, et cetera, et cetera.
• 22:26
  John Thomas: However, if you plan or if you have any, I mean, and it just won't be one airline.
• 22:31
  John Thomas: It'll be, you know, you could participate in any of the major airline frequent flyer programs when you fly an hour on our flight.
• 22:40
  Ian McLean: And you know, the other part is Pearson is getting to the point where they really only want to do long-haul domestic and international flights.
• 22:50
  Ian McLean: They just don't have enough capacity.
• 22:51
  Ian McLean: Yeah.
• 22:53
  Ian McLean: So regionally, and we've been this is why we the business community are so excited about this airport and the investments, is you know, and we're we're getting all day two way go service.
• 23:02
  Ian McLean: The idea is that there would be, you know, hourly service into Toronto, and we're already doing the planning, which I know you're aware of, and which which gets us connected to Pearson, of having a spur that you could get on here in Waterloo and end up at Pearson.
• 23:18
  Ian McLean: So it some people could come from Pearson to do a flight from Waterloo or vice versa.
• 23:23
  Ian McLean: You know, and that that makes the appeal of this could be a place that you fly in, you might fly to Pearson, but that that connection will make those partnerships.
• 23:31
  Ian McLean: The Behind the Business Podcast is made possible through the support of our title sponsor, Gore Mutual.
• 23:39
  Ian McLean: Proudly Canadian, Gore Mutual has stayed true to one purpose for more than 185 years: insurance that does good.
• 23:46
  Ian McLean: It's the reason they exist.
• 23:47
  Ian McLean: They believe that when we focus on being good, doing good, and spreading good, we all thrive together.
• 23:53
  Ian McLean: We're grateful for their continued commitment to our local communities and the positive impact they make every day.
• 23:59
  Ian McLean: For more information, visit goremutual.ca.
• 24:03
  Ian McLean: Okay, uh so you've talked about a number of the operational discipline, right?
• 24:10
  Ian McLean: Of saying know what you are, uh you're not ultra and ultra-low carriers.
• 24:15
  Ian McLean: Yeah, it's great.
• 24:16
  Ian McLean: Their their first sticker price is next to nothing.
• 24:20
  Ian McLean: Yeah.
• 24:20
  Ian McLean: Uh except for if you want to breathe or have a uh take on a purse or do anything because it's all everything's added on top of that.
• 24:29
  Ian McLean: And the experience is not very good.
• 24:30
  Ian McLean: It's cheaper, but it's not a great experience.
• 24:33
  Ian McLean: How do you struggle the operational discipline, right?
• 24:37
  Ian McLean: Of saying there's a business, like you have to do the things to kind of be able to make money or break even uh to start with the innovation.
• 24:45
  Ian McLean: Because you're talking about innovation things of different aircraft, you know, certain knowing that you're gonna talk to your customers about what markets they want.
• 24:53
  Ian McLean: Like first meeting we had, there was the COD Father, uh Ron Cottle from Cottle's Cat Seafood.
• 24:59
  Ian McLean: There's a lot of people that go to Halifax.
• 25:01
  Ian McLean: Well, you didn't immediately say, hey, look, it's not one of our first number, but we're open to that.
• 25:08
  Ian McLean: Like if we if we think that there's a market there, that's the sort of thing we'd add.
• 25:11
  Ian McLean: How do you keep the operational discipline with that innovation or new markets?
• 25:15
  Ian McLean: How do you how do you balance both those pieces?
• 25:17
  John Thomas: So I uh so Ian the again it gets back to having the right aircraft that gives you the operational flexibility to to do uh to to flex into new uh new routes.
• 25:33
  John Thomas: I mean the the great thing um I mean Pivot currently operates great aircraft, the Dash 8, uh Dash 8 100s, 300s, but unfortunately they're limited in their range and they're and they're slower.
• 25:46
  John Thomas: And so part of part of our goal is again, work have a five-year plan and make sure that you start off with the right foundation.
• 25:57
  John Thomas: And the right foundation is the CRJ 200, the 50-seat regional jet.
• 26:02
  John Thomas: Because that that can again, the economics aren't great because it's a regional jet, but it gives us the operational flexibility to it works commercially on a YKF to Montreal, but it also works on a YKF to Winnipeg, to Halifax, to uh DFW, to Miami.
• 26:23
  John Thomas: So that gives us the and and the thing is is that you always run your models to say, okay, you know, how do you how do you sort of splice all this together?
• 26:34
  John Thomas: So no, uh again, a lot of it's sort of the market analysis, but the innovation, the innovation is ubiquitous because the innovation is all about we the Connect brand is all about a better regional airline service.
• 26:50
  Ian McLean: Yeah, and and delivering on what people are asking for, right?
• 26:53
  Ian McLean: And and getting and I think the other part which I like in the name is and we we talk about this.
• 26:58
  Ian McLean: Waterloo region punches above its weight in in in in in context of of business for a lot of reasons, but Connect Airlines, we need to connect to the world without having to go to Toronto, and that's that's what's exciting for us.
• 27:13
  Ian McLean: Okay, um so for regions like Waterloo, where and we've talked about this a little bit, connectivity with the rest of the world, talent, uh, innovation, the the business growth, are they all interconnected.
• 27:26
  Ian McLean: Um, talent attraction, et cetera.
• 27:28
  Ian McLean: What does smart aviation strategy look like?
• 27:31
  Ian McLean: I mean, we we talked you're excited about you've got the um the Waterloo Flight Center, uh, which is training um you know aircraft professionals.
• 27:40
  Ian McLean: You've got the University of Waterloo and their uh their their sustainable um uh um flight uh school or or project.
• 27:49
  Ian McLean: What are the things that uh that for you start to look like smart aviation here that are that that you can build upon here in Waterloo Region?
• 27:59
  John Thomas: Well, I mean part of it uh Ian is as you say, the region already punched above punched well above its weight.
• 28:05
  John Thomas: And in particular, uh tapping into the local flight school um as a as a channel to get uh pilots, because as we grow, we'll need more pilots.
• 28:15
  John Thomas: So, you know, working with the local flight school in terms of uh in terms of that development, really, really excited to work with the University of Waterloo's um the Waterloo Institute of Sustainable Aviation because one of the things that we haven't really talked about much here is um we we have an ambition as Connect Airlines to lead the world with uh into um zero uh zero emission aviation.
• 28:42
  John Thomas: And uh done a lot of work over the last five years and we're uh we're on a path to that.
• 28:47
  John Thomas: Um and the bottom line is that it's actually um it's basically electric hydrogen aviation, and the University of Waterloo is all over that.
• 28:56
  John Thomas: Um so we're we're very keen to work with uh with WISA to their their uh sustainable aviation institute to basic basically make the region uh the epi the epicenter of um the move to the inevitable move to uh zero emission aviation.
• 29:14
  Ian McLean: Uh well it is a great goal and it needs to happen, and you know, people aren't going to stop traveling, so we better make it as uh uh uh environmentally um uh sustainable as possible.
• 29:24
  John Thomas: Okay, and and I want to come back to the Well and actually I would say, Ian, that our focus on sustainability is not just on environmental sustainability, but believe it or not, the move to alternative uh the move away from fossil fuels to fuel aircraft to electric hydrogen is not only environmentally sustainable, but believe it or not, it dramatically reduces the cost structure of of the airline and makes it financially more sustainable.
• 30:00
  Ian McLean: YKF, we've had regular service to so we Bear Skate Airlines to Ottawa and then Ottawa and Montreal.
• 30:06
  Ian McLean: We had service to Detroit with I I think it was uh American Eagle.
• 30:11
  Ian McLean: Northwest.
• 30:11
  Ian McLean: Oh Northwest.
• 30:12
  Ian McLean: It was Northwest.
• 30:13
  Ian McLean: Uh we've had uh Chicago with with um uh with American Eagle.
• 30:18
  Ian McLean: Um so we've had scheduled service, it's it's it's always been well utilized, um, but it it never has stuck for some of the reasons that you've talked about.
• 30:29
  Ian McLean: But for so help uh kind of paint the picture for how Connect uh Airlines can help restore and strengthen those those connections and make them make them stick.
• 30:40
  Ian McLean: Yeah, I guess is what and you've described some of that, but why are you convinced that you can succeed where other airlines and I think I I know part of that is it's a different structure, but but kind of paint that in a in a piece put all those pieces together and say, yeah, like you're invest you're invested here, the the airport itself has invested, pivot and and connect are investing here.
• 31:03
  Ian McLean: Just kind of carry that through because I think that's one of the things that people will be be a little concerned about or want to hear is how do we know that this is going to be here?
• 31:13
  Ian McLean: Yeah, the the stickiness.
• 31:15
  John Thomas: Yep, yep.
• 31:16
  John Thomas: Well, as as as you say, we've already made the it's not as if we're about to make the investment, we've actually already made the investment of actually basing pivot at um at YKF and for very, very uh rational reasons.
• 31:29
  John Thomas: Um so number one is and and we really do want to be the homegrown airline.
• 31:34
  John Thomas: I mean, uh we s our our our our success is totally aligned with the success of the uh of the local community.
• 31:42
  John Thomas: So it it but it again it's sort of how do we best meet the needs of the 3.4 million passengers who the bulk of which are going to Pearson today.
• 31:52
  John Thomas: So number one is we know there's a lot of business travel out of out of the region.
• 31:57
  John Thomas: So let's make sure that we fly to the right business um uh business destinations, but more critically, let's do it at the times that people want to do it.
• 32:07
  John Thomas: So that's number one is just meet the need and the needs of the of the travelers.
• 32:13
  John Thomas: And the second one is again, how do you connect to the world?
• 32:17
  John Thomas: So let's make sure that we fly at the right time so that people can connect to, you know, uh fly to Montreal and then connect to the European bank that gets them, you know, all of those great destinations in Europe uh out of Montreal.
• 32:32
  John Thomas: Similarly to um, you know, and it's sort of quasi-connecting, but also businesses, obviously there's a huge technology sector here.
• 32:41
  John Thomas: Um and they have affinity with the West Coast, with the West Coast of the US, like San Jose, San Francisco, et cetera.
• 32:48
  John Thomas: It's really hard to do a direct service between YKF to the West Coast, but boy, if we do a really regular frequent service from YKF to Chicago, O'Hare, that gives you great connectivity to the West Coast.
• 33:03
  Ian McLean: And and having those and and setting the schedule here so there's a seamless connection in O'Hare.
• 33:09
  John Thomas: Yeah, yeah, so that you don't arrive at O'Hare and then you've got to sit there for six hours for the connection to San Jose.
• 33:14
  John Thomas: No.
• 33:15
  John Thomas: It's actually timing the flight so that um that you actually have that seamless connection.
• 33:20
  John Thomas: And and I know there's sort of uh a little bit a little hesitation with um uh with sort of having to go through U.S.
• 33:28
  John Thomas: Customs and the fact that uh YKF doesn't have preclearance, but again, we will streamline that process.
• 33:34
  John Thomas: I mean, most of the business travelers here, I would assume, have Nexus.
• 33:37
  John Thomas: Many do, yeah.
• 33:38
  John Thomas: Yeah, and that gets them uh seamlessly through.
• 33:42
  John Thomas: And let's just say that we'll do things at Chicago O'Hare to make that uh to make that connection seamless.
• 33:49
  Ian McLean: Okay, uh now you over your 50 years, which I still think is remarkable uh you've seen a lot.
• 33:55
  Ian McLean: Deregulation, crisis, mergers, 9-11, COVID, take-your-pick transformation, you know, uh all kinds of things.
• 34:04
  Ian McLean: What do you think the next decade looks like for broadly for aviation?
• 34:08
  Ian McLean: I mean, we're gonna continue to see the growth of people, it's in I don't think there's any shortage of people wanting to travel, whether it's whether it's and I think there's a growing ne sense that Zoom calls are great, but people thrive on person-to-person connections.
• 34:24
  Ian McLean: That's where business gets done.
• 34:25
  Ian McLean: So so business the travel isn't gonna go away.
• 34:28
  Ian McLean: Where where do you see the industry and aviation going in the next decade?
• 34:32
  John Thomas: Um so so number one, I think um people people realize that the low-cost carrier phenomena has is done.
• 34:40
  John Thomas: I mean, you look at um you look at I mean it it it the model isn't sustainable.
• 34:47
  John Thomas: Yeah.
• 34:47
  John Thomas: And you know, and Southwest is a great example of that.
• 34:51
  John Thomas: You can start off as a low-cost carrier, but you over years become a legacy carrier and your costs converge with the uh with the major carriers.
• 35:00
  John Thomas: So I think that there'll be less new entrants in terms of you know this low-cost, low-cost carrier, number one.
• 35:09
  John Thomas: Number two, I think there'll be greater collaboration with the airlines to give people global connectivity because that's what people want.
• 35:17
  John Thomas: People want the global connectivity.
• 35:19
  John Thomas: I I think the third one is um the the dilemma of the major carriers is that you can't be all things to all people.
• 35:29
  John Thomas: And I think it's those carriers who are brave enough about their core business proposition to say there are parts that we just can't do well.
• 35:41
  John Thomas: And region regional aviation is a classic example, is it's very different operating a 50 passenger aircraft versus a 350 passenger aircraft on long haul versus on short haul.
• 35:56
  John Thomas: So I think you'll I think you'll see more, let's call it specialized airlines that actually are very focused on meeting the specific needs of a of a community or of a customer segment, et cetera.
• 36:12
  John Thomas: And then finally, is the industry has to the industry has to decarbonize.
• 36:17
  John Thomas: And you know, I I'm I'm sad to see the amount of money that's going into SAF because I don't see SAF as a uh sustainable aviation fuels.
• 36:28
  John Thomas: Yeah.
• 36:29
  John Thomas: And and again, it gets back to government regulations.
• 36:32
  John Thomas: I mean, um I'm on the board of Iceland Air, we're a European as part of the Schengen, we're a European carrier.
• 36:38
  John Thomas: So therefore, we we're feeling the pain of of SAF in that um the EU has uh dictated that any uplift from a European airline, uh European airport this year, at least two percent needs to be at SAF, which is at a much significantly higher rate cost.
• 36:56
  John Thomas: So I do think there needs to be at I I I use the term at the moment Europe is using a stick to try and decarbonize.
• 37:06
  John Thomas: They've got a uh punitive carbon tax, um, they've got the SAF requirements, et cetera.
• 37:12
  John Thomas: You need the carrot.
• 37:13
  John Thomas: And to me, the carrot is the region and again fits in the regional aviation space.
• 37:19
  John Thomas: If you look at the migration to electric hydrogen, which I think everyone has now recognized is the first step to the on that path, and the the the technology exists today to refer uh to reconfigure uh you know the the the current turboprops into hydrogen electric.
• 37:39
  John Thomas: Um I I see much more uh that evolution uh happening.
• 37:45
  John Thomas: Um and interestingly enough is because uh because the industry, the airline industry will be a huge producer and consumer of liquid hydrogen, the airports can actually become hydrogen hubs and have additional benefits for the local community.
• 38:04
  John Thomas: I mean, the after after well.
• 38:07
  Ian McLean: That's always a problem with hydrogen is the scale.
• 38:09
  Ian McLean: Yeah, sc scaling it.
• 38:11
  Ian McLean: And and I mean sometimes the technology, you know, it will catch up with the the scaling of of having you know the the the hydrogen available where you need to have it is.
• 38:22
  John Thomas: Yeah, and Ian that that also gets back to the point is um you need you need to do it in a economic uh economic rational way.
• 38:33
  John Thomas: And the classic is to your point, um producing hydrogen through electrolysis is really, really expensive, depending upon what your electricity costs are.
• 38:43
  John Thomas: But one of the cheapest ways to produce hydrogen is natural gas.
• 38:47
  John Thomas: Now, under the rainbows of the hydrogen, which we'd all like to get rid of, it's gray hydrogen.
• 38:52
  John Thomas: Well, guess what?
• 38:53
  John Thomas: There is technology today that allows you to pass natural gas through a uh through a process where the offtake is either carbon black or graphite, and you get green hydrogen.
• 39:05
  John Thomas: So the the let's use the resources we have.
• 39:10
  John Thomas: I mean, don't go and put even more tax on the on the grid, because at the moment, as you know, AI in the uh data centers are a really a huge drain on uh on electricity.
• 39:22
  John Thomas: Take resources that we have, and you know, Ontario has a great an abundant supply of natural gas, so use that.
• 39:31
  John Thomas: Put the there therefore you actually significantly reduce the cost, and then you need to obviously have a liquefaction, and that's where you put the capital is the liquefaction of the highest.
• 39:42
  Ian McLean: Who would have thought the John Thomas and the airline industry are are gonna be some of the greatest environmentalists of uh of uh of you know for for sustainability?
• 39:51
  Ian McLean: I mean I hadn't thought of it in those contexts, but you know, when we when we do talk about energy, uh we all know that the big industrial users are the are the biggest contributors.
• 40:01
  Ian McLean: Transportation, manufacturing, travel, uh, and so all that that needs to be done.
• 40:06
  Ian McLean: So that's fascinating.
• 40:07
  Ian McLean: Listen, okay, before we've we've we've gone over, I'm I'm way over time, but we still have to get to our rapid fire questions.
• 40:13
  Ian McLean: But last thing before we do that, um what what is the best way for people to um to help as Connect starts here?
• 40:22
  Ian McLean: So whether you're a business person or someone that does a lot of travel, how can how can people support um you making the right decisions uh for for delivering service in this area?
• 40:37
  John Thomas: Uh so just tell us um go to www.connectairlines.com.
• 40:42
  John Thomas: Uh there is a feedback uh uh feedback thing on on the website.
• 40:48
  John Thomas: Uh so we'd love to hear people's views um uh on that.
• 40:52
  John Thomas: And that's also a way that we can keep them informed as to uh as our plans uh solidify.
• 40:57
  Ian McLean: So things that may be helpful where they would they might travel from, how often they travel, uh you know, maybe some price sensitivities of saying I would travel if it was an X, Y, or Z.
• 41:08
  Ian McLean: Uh, you know, so some of those types of things are helpful data points for for to understand what the market is saying here so that you can make your decisions and in sort of stack and and and schedule things.
• 41:20
  Ian McLean: Yeah.
• 41:20
  Ian McLean: Perfect.
• 41:21
  Ian McLean: Yeah.
• 41:21
  Ian McLean: Okay.
• 41:22
  Ian McLean: Now, this is uh this has been a fascinating story.
• 41:24
  Ian McLean: I'm I'm I've I've thoroughly enjoyed this, but this podcast always I always ask a series of questions which I think kind of get to leadership, right?
• 41:33
  Ian McLean: It's a fascinating to hear how leaders in their in their industry kind of view things.
• 41:38
  Ian McLean: And there's no right or wrong answers, but I ask the same set of questions to everybody.
• 41:41
  Ian McLean: So if I was if you could go back and tell your younger self something, what would it be?
• 41:46
  Ian McLean: Uh have self-confidence.
• 41:50
  Ian McLean: That's a good one.
• 41:52
  Ian McLean: It's a good one.
• 41:53
  John Thomas: You know, we we all we all and I and it's funny, I walk around looking at kids today, and I want to say just believe in yourself because you really are great, yeah, and no one's told you that yet.
• 42:05
  John Thomas: But everyone has their greatness, and just believe in yourself and go for what you believe in.
• 42:10
  Ian McLean: Okay, who uh uh as you think back on your on your journey and where you are today and what's yet to come, what are who inspires you uh um most?
• 42:19
  Ian McLean: My wife Paula.
• 42:20
  Ian McLean: Yeah, yeah.
• 42:21
  John Thomas: She's a hell of a lot smarter than me.
• 42:23
  John Thomas: Marrying up is always a good thing.
• 42:27
  John Thomas: Oh no, no, I definitely marry.
• 42:29
  John Thomas: And she says she knows what I got out of the relationship, not my she did, but yeah, no, my wife.
• 42:36
  Ian McLean: That's great.
• 42:37
  Ian McLean: Okay, if you weren't, and this is hard to imagine.
• 42:39
  Ian McLean: I said this, you you've been in it so long.
• 42:41
  Ian McLean: I mean, I I I find it hard to imagine that if you weren't in your current career, what would you be doing?
• 42:47
  Ian McLean: But what would you do if you weren't in the airline industry?
• 42:50
  Ian McLean: I'd be a singer.
• 42:51
  John Thomas: Really?
• 42:51
  John Thomas: Yeah, yeah.
• 42:52
  John Thomas: I come from a very musical family, and I love music.
• 42:56
  Ian McLean: That's the first time we've had singers.
• 42:57
  Ian McLean: That's awesome.
• 43:00
  Ian McLean: Um Are you reading a book?
• 43:02
  Ian McLean: Do you listen to podcasts?
• 43:04
  Ian McLean: What do you do to kind of stimulate your brain or or shut off?
• 43:07
  John Thomas: No, no, no, no, no.
• 43:08
  John Thomas: So I uh I read books on uh history of uh of countries and states.
• 43:14
  John Thomas: So uh Robert Mitchum, uh Texas, Hawaii, love those books.
• 43:20
  Ian McLean: My old boss who used to uh he'd love those books.
• 43:22
  Ian McLean: Great big thick ones that would take a long time to get through.
• 43:25
  Ian McLean: Yeah, they're famous, but they're they're almost historical, but they're wrapped in a story.
• 43:30
  John Thomas: Yeah, yeah, yeah, yeah, yeah, yeah.
• 43:31
  John Thomas: But for anyone who's interested in aviation, history of aviation, another great one is uh Empires of the Sky.
• 43:36
  John Thomas: Empires of the Sky.
• 43:38
  John Thomas: I'm gonna take that one on.
• 43:39
  Ian McLean: Empires of the Sky.
• 43:40
  Ian McLean: Okay, and um uh one more time, just if someone wants to be in touch with you or connect or pivot, where do they go?
• 43:47
  Ian McLean: www.connect airlines.
• 43:49
  Ian McLean: Listen, John, uh if it's been a fascinating couple of days, appreciate you uh coming.
• 43:55
  Ian McLean: And you do live in Texas, right?
• 43:56
  Ian McLean: Is it Houston?
• 43:57
  Ian McLean: Uh no, Dallas.
• 43:58
  Ian McLean: Dallas.
• 43:59
  Ian McLean: Cowboys fan, boo.
• 44:01
  Ian McLean: We're Buffalo Bills fans in this part of the world.
• 44:04
  Ian McLean: Thank you for coming up here um uh doing our our session and and taking time to uh record the radio show and now doing this.
• 44:11
  Ian McLean: We want to tell the story.
• 44:12
  Ian McLean: This is an important development for Waterloo Region, for our you know, broader community, but certainly the business community to make this successful because it's it is um it is connecting Waterloo region to the world, and that's that's gonna be important for particularly as as we grow, and we've talked about this at that session.
• 44:30
  Ian McLean: We're gonna be a million people in 20 years.
• 44:33
  Ian McLean: Uh it's 300,000 more people in your customer base.
• 44:36
  Ian McLean: We've got to be ready with the the services and connections uh globally that people will expect when they live here and Connect Airlines.
• 44:44
  Ian McLean: We hope will be a long and uh and and uh valued partner in that in that process.
• 44:49
  Ian McLean: Thanks for joining us today.
• 44:50
  John Thomas: Thanks, Saiyan.
• 44:51
  John Thomas: I appreciate it.
• 44:53
  Ian McLean: Thank you for joining us for another episode of Behind the Business, proudly presented by Gore Mutual, insurance that does good.
• 45:00
  Ian McLean: New episodes drop every Thursday, so be sure to tune in next week.
• 45:04
  Ian McLean: You can also visit greater kw chamber.com to catch up on past episodes anytime.
• 45:09
  Ian McLean: We'll see you next time as we continue to go behind the business.