Finding Harmony in Uncertain Times by Ken Donohue

A man and his family are delayed at a Hawaiian airport for 18 hours. The isn’t communicating well with its passengers. People are growing restless. A young girl asks her father what he’s PHOTOS: HARMONY PHOTOS: going to do about it. “What do you want me to do?” he replies. “You should start an airline of your own,” the girl says matter- of-factly. Subsequently, the man takes up his daughter’s suggestion and acquires a Boeing 757. Sounds like another urban myth? It could easily be, except that in this case it is true, and the man in question is billionaire Dr David T K Ho.

12 A p r i l 2 0 0 7 ost of us trapped in the situation faced Mby the Ho family would have cursed the airline, while others may have threatened to

never fly it again. But Ho has the financial AIRWAYS HARMONY PHOTOS: means to do something more positive. He Seats in ‘harmonyone’ class have a width of 22in (56cm) and a 52in (132cm) also has the ‘nose’ for a business opportunity, pitch, more than any other scheduled airline in Canada, and a four-way and his ventures rarely fail. “I travel a lot adjustable headrest plus laptop power outlets. more than 250,000 miles each year and I noticed that the service provided by in general According to Lyall Knott, a lawyer and long-time was going down,” says Ho, owner of Vancouver-based friend of Ho’s, the tycoon is a visionary who can see a Harmony Airways. future in underperforming companies; in the case of the Speaking to Airways in his modest office at the airline’s airline industry, he saw an opportunity to run an airline headquarters, Ho shares a story of how he was travelling that didn’t just talk about service but actually delivered. in business class once and he was hungry, so he asked the “David Ho doesn’t need partners or capital,” says Knott, flight attendant for something to eat. He was told he had “but when he came up with the idea of starting an airline, to wait. While he had slept, a meal had been served. But many of us thought this was the time he would do a face when he awoke the tray was gone, and Dr Ho was told plant [fall flat on his face].” there were no more meals left. “It’s really silly how some The time was post-September 11, 2001, the airline airlines treat their customers,” he reflects. “When I was industry had just been turned upside down, and along younger, flying was an enjoyable experience. Everyone came a man with lots of money wanting to start an was smiling and happy. The service was excellent.” airline. (Airways, September 1998) had just Ho has an eclectic assortment of business interests. gone bankrupt, leaving a chorus of angry customers, Apart from an airline they include a luxury car dealership, staff, and creditors in the lurch. “Transport Canada really a golf course, and a thriving greenhouse business. He is didn’t want another airline in Canada, especially if it was also heir to the Ho Empire—Hong Kong Tobacco the going to suffer the same fate as Canada 3000,” remembers largest manufacturer and distributor of tobacco products Knott, “but with determination and grit, Ho and his team in Southeast Asia. were able to pull it off.”

Effective May 18, 2004, HMY Airways began doing business as Harmony Airways. ROY LOCK ROY A i r w a y s 13 ED PASCUZZI

Harmony Airways launched nonstop service from Vancouver International Airport to Palm Springs, California, in January 2005.

The genesis of Harmony Airways was in the name When Ho announced plans to start a Vancouver- My Airways, but trademark issues with My Travel forced based airline in February 2002, there were lots of skeptics Ho to change his airline’s name to HMY Airways—which but, as he says, he had to take a chance. A group of seven represented the initials of his family name and those of people with extensive industry knowledge was brought his mother and grandfather. Ho concedes that the airline together to launch the airline. He tells Airways that the industry was in trouble when he started HMY, but he most challenging part of starting the airline was the believed that the business was a good one. “Sure, Canada regulatory application process. To aid this procedure, long- 3000 just went bankrupt, but I have to ask why,” muses time industry maverick Brent Statton became Harmony’s Ho. “Airlines get into trouble when they spend too much first CEO. Statton, founder of now-defunct Greyhound money, or expand too fast. Our plan is to grow slowly Air, is very knowledgeable about the regulatory aspects of and do things differently than other airlines.” the airline business. HARMONY AIRWAYS HARMONY

14 A p r i l 2 0 0 7 Two flight attendants are assigned to business class, which has only 16 seats. The menu was created by Rob Feenie, and customers receive a hand-held on-demand entertainment device called ‘Interlude’ that includes movies, television shows, music, and video games.

HMY took delivery of its first of two 757s on September 15, 2002. Ho recalls: “When we first introduced the concept of an airline few people believed it would happen, so it was very emotional the first time our airplane arrived in Vancouver.” Because of a delay receiving the second 757, the first flight of the fledgling airline was postponed by three weeks, from November 1 until the 22nd, when it operated PHOTOS: HARMONY AIRWAYS HARMONY PHOTOS: a service from Vancouver to Mazatlán, México. Indeed, Harmony began life as a charter carrier, operating for in- house tour operator Companion Holidays from western Canada primarily to Mexican destinations, as well as Ho, who had known Collins for several years, and had other ‘sun spots’ in California, and to Las Vegas, Nevada. been impressed with his people skills, was aware that the In March 2003 the airline became a scheduled carrier finance minister was looking for new challenges. “Gary with an expanded network. is always cheerful and optimistic, and to be successful in In November 2004, the business and political the airline industry you need to be optimistic,” says Ho. communities in were shocked to learn “People trust him and I trust him.” that Gary Collins, the province’s finance minister (and Collins admitted to Airways that his previous a commercial pilot) had resigned to become Harmony’s experience with government has been a big help. “In new president and CEO. The person least surprised was government, we had a monumental task in turning the Collins himself. “I spent 14 years in elected office…it was province around, and it comes down to leadership,” he incredibly rewarding and a privilege, but I finished what said. “The same can be said about the airline industry. I set out to do,” he related. It’s a tough business that demands leadership.” He added Before it was made public, Collins told the BC premier that in business and politics you can’t wait for something of his decision, and then began looking for new work, to happen—you have to go get it—and no business but he had to be mindful that he was still the minister of has the right to be successful. It may seem simple, but finance. Because of his discussions with Harmony, Collins Collins’s first job was to secure new customers—and the stepped away from the government’s decision on whether other airlines’ customers. Not an easy task in a country to support a rapid transit line that would link Vancouver where two established air carriers already had a significant International Airport and downtown Vancouver. Now customer base. known as the ‘Canada Line’, construction is underway Collins believed that since the demise of Canada 3000 and scheduled for completion late in 2009, a few months (Airways, May 2003) and (Airways, November 2003) before Vancouver hosts the 2010 Olympic and Paralympic the airline business in Canada had never been stronger. Winter Games. He noted that since exiting bankruptcy protection, Air

A i r w a y s 15 Canada is healthier and WestJet continues to do well. “We’re not out to be the lowest cost, because we believe there is great value in providing superior service,” Collins said, adding, “we’re not in the airline business—we’re in the customer service business, we just happen to do it on an airplane.” The airline now operates four 757-200s, and is pleased with this type for its current operations. Collins told Airways that Hawai‘i, with services to Honolulu and Maui, is one of Harmony’s best markets and the 757 is the perfect aircraft for these routes. “We’re able to offer comfortable nonstop service to Hawai‘i from not only Vancouver, but also and Edmonton,” he said. The airline is reviewing its fleet plans and considering both Airbus and Boeing products for its North American and future long-haul routes, but is careful to ensure that the decision will not hurt the airline. Harmony wet-leases a Bombardier CRJ100LR from Voyageur Airways for its Vancouver–Calgary service (News from the Airways, September 2006). “ has been very successful with its regional jets,” said Collins, “(and) it is intriguing to try smaller aircraft on routes where our Boeing 757s wouldn’t make sense.” When it was suggested that the Vancouver– Calgary route was already well served with up to 30 flights a day by two other carriers, Collins noted that, as much as anything, the Calgary service is a feeder into Vancouver for the airline’s Asian partners. In fact, along While it is making a name for itself with its North with several interline agreements, Harmony recently American routes, Harmony has long wanted to fly to signed its first code-share agreement with China Eastern Asia. But, as in most such cases, the reality is different Airlines (Airways, October 2000), which operates a daily from the intention. Finding the right aircraft at the right service between Shanghai and Vancouver. price, and obstructive government regulations, are He added that Harmony cannot fear competition and preventing the airline from serving Asia. “The aircraft over-capacity, and suggested that his airline can compete market is very tight, and we won’t enter an agreement for a on service. “Once people try us, they won’t want to fly on long-haul aircraft that doesn’t make sense economically,” other airlines,” Collins enthused. It may have sounded said Collins. like a bold thing to say, but Harmony just might deliver He also cited a decades-old government air policy that on that. Its word-of-mouth reputation is growing, and is hindering expansion to Asia. “Currently, Air Canada while most airlines are cutting back on service, Harmony is the only Canadian airline serving Asia, yet there are provides many of the extras that people used to appreciate 16 flight slots a day between Canada and China that about air travel: complimentary hot meals, movies, are not being used,” he revealed. “Canada is one of the pillows, and blankets—none of which are offered by the only countries in the world not aggressively expanding airline’s domestic and many US competitors. Harmony capacity into China.” also will not continue a route for the sake of flying it, The current policy restricts an airline from acquiring having dropped Los Angeles in favor of Palm Springs. a route unless it has the aircraft to serve it. Not a problem, Harmony doesn’t promise to have the cheapest fares, Collins pointed out, for an airline such as Air Canada, although it is competitive, but the airline’s leaders are with a large long-haul fleet already at its disposal; but it convinced that some people will pay a little more if the is a big challenge for a small carrier, such as Harmony, know they will receive better service. “Why does every which would have little other use for a long-range airline think it needs to be the Motel 6?” questioned airplane while it developed a route to Asia. However, Collins. “Why do we assume that the cost of a ticket is Harmony does hope to start service to China within a everything, when we know people will pay for a better year, having applied for authority to serve Beijing and experience?” He further asserted that the airline can cut Shanghai. Collins told Airways that the airline would also costs without beating up the customer. be interested in serving Guangzhou, but lamented that

16 A p r i l 2 0 0 7 calling it a fabulous leisure destination that is underserved from western Canada. With a 0900 departure, Harmony offers the best schedule for people heading to the ‘Big Apple’ from Vancouver. While Cathay Pacific offers a good three-class daily service to New York, it is timed in favor of Hong Kong passengers, so the return flight to Vancouver from JFK arrives at 0200, and Collins was quick to point out that the schedule can often be delayed, especially during Hong Kong’s monsoon season. Harmony recently negotiated a code-share agreement with Hawaiian Airlines (HAL), which will offer Harmony’s customers connections on HAL’s extensive network, including flights to the South Pacific and Australia. ‘Hawaiievery island every day’ is Harmony’s latest marketing pitch to position itself ahead of its Canadian competitors. While Harmony’s owner may have deep pockets, the airline is very much a business and intends to make a profit. While he wouldn’t release any financial details, Ho did say that the airline is close to breaking even, and suggested that Harmony is not a toy, and if there is no profit he won’t do it. The airline’s CEO did reveal, however, that the carrier is doing well on most routes,

ED PASCUZZI especially to Las Vegas and Palm Springs, but the Toronto service is still a challenge, even with an increased 17 flights a week during the summer months. In 2005, Harmony introduced a premium product, called ‘harmonyone’, which Collins hailed as the best domestic business class in North America. The airline Canada, unlike a lot of other countries, has yet to open a is chasing the high-end leisure traveller with this visa office in that city. cabin, and so far the service has proved very popular. Harmony’s effusive owner calls China a “sleeping Popular Vancouver chef Rob Feenie, winner of the giant,” and suggests that with a market of more than a internationally acclaimed ‘Iron Chef’ competition on TV, billion people, the demand for air travel in China will was recently commissioned to create a menu for the new continue to increase at a staggering pace. “The Chinese class of service. want to see the outside world, and their spending power The airline is keen on developing the large Chinese is growing,” says Ho. “There will not be enough ’planes and South Asian market that resides in British Columbia to fly people.” and Alberta. To that end, the airline has a Mandarin- Ho notes that once the Chinese government granted speaking call center. And, in a marketing stunt that Australia Approved Destination Status, the number of few people could pull off, famous martial arts movie Chinese tourists visiting Australia has increased tenfold. star Jackie Chan became an honorary captain of Continues Ho: “Research has shown that once Canada Harmony Airways. gets Approved Destination Status [which is forthcoming], “I’ve known Jackie for more than twenty years,” says two million visitors from China will travel to Canada, in Ho, “and we wanted people to recognize Harmony early the first year, and four million the following year. The on, so we created a marketing campaign around him.” Chinese like visiting Canada, and there is a long history Ho called Chan in Berlin, where the actor was filming a between the two countries.” movie, and asked what he was doing on Sunday. “It’s my Harmony serves seven destinations year-round day off,” replied Chan. From the other side of the world, and a handful of others on a seasonal basis. New York Ho told Chan there would be no rest, and that he wanted (JFK) and Oakland, California, are Harmony’s newest to take some pictures of him for a marketing campaign. destinations, and while some may question the viability “Now, you’re going to ask me how much I’m going to pay of OAK, Collins was bullish about the Bay Area route. you,” Ho told Chan. “Nothing,” was Chan’s answer. So Ho “The airport [Oakland] is very convenient, with BART dispatched some of his crew to Berlin for the photo shoot (Bay Area Rapid Transit) service and its close proximity with Chan. “Jackie was really good about it,” remembers to the Napa Valley.” Ho. “He even took everyone out for dinner afterward.” Collins was equally enthusiastic about New York, Having Jackie Chan as an honorary captain may

A i r w a y s 17 Harmony Airways is a small airline with big dreams. It is quietly making a name for itself in an industry that can be fickle and unkind. ‘A Better Flying Experience’ is more than a mere slogan for an airline that has staked its reputation and future on providing exceptional value and service to its passengers. If Harmony continues to fly by that motto, success will surely follow. photo to come maybe Footnote: from Garry at Harmony Shortly after being interviewed by Airways, Gary Collins, Harmony’s CEO, resigned. In leaving, Collins reportedly said that his departure should not be seen as trouble for the fledgling airline. And while he publicly stated that his departure from Harmony allows him to explore new job opportunities, his move leaves some doubt about the airline’s future. Nevertheless, Collins will maintain a connection to Harmony by sitting on its board. Kirk Henderson, former vice chairman of the Pattison Group, has been named interim president. ✈ have been a good marketing ploy, but it was probably also a subtle way of telling the competition not to mess with Harmony. Collins told Airways that the airline is always looking –––––––––––––––––––––––Fast Facts at creative ways of developing new markets. Hawai‘i is a large leisure market for western Canadians, but there aren’t a lot of Hawaiians who visit western Canada. Harmony Airways “We went on a fact-finding mission and discovered that there are a group of Hawaiians that love to downhill IATA: HQ ICAO: HMY IATA/ARC: 668 Radio: Harmony ski,” said Collins, “so we partnered with Big White Ski Resort, in Kelowna, to package ski vacations, and last P O Box 32436 Tel: +1 604 270 2088 winter we flew a thousand Hawaiians to the slopes of Vancouver International Airport Fax: +1 604 270 2082 British Columbia.” Terminal Building Harmony’s commitment to service doesn’t begin and Richmond, BC end when passengers board one of its aircraft. According Canada V7B 1W2 to Collins it is the overall experience that the airline is striving for. “When people think about taking a vacation, Website: www.harmonyairways.com we want them to think about Harmony,” he said. “We want to be part of their vacation experience.” He added Founded: 2002 that little extras like the bottle of water each passenger Start date: November 22, 2002 receives at check-in, or the leis (floral garlands) for those CEO: Dr David T K Ho travelling to Hawai‘i, cost pennies. Ownership: Dr David T K Ho (100%) The airline’s mantra seems to be that it is unique and does things differently than other carriers. So far it Cities served: Calgary, Honolulu, Las Vegas, Maui, New seems to be doing the right things. When David Ho was York (JFK), Toronto, Vancouver delayed in Hawai‘i he, along with fellow passengers, was (Seasonal): Kelowna, Palm Springs, San Francisco (Oakland), incensed that there was little communication from the Victoria airline and they were forced to while away the hours at the airport. But Harmony doesn’t only talk about doing (Vancouver–Calgary service operated by Voyageur Airways things differently. “When one of our flights was delayed with Bombardier CRJ100LR in Y50 configuration.) for a number of hours in Hawai‘i, because of mechanical problems, we bused the passengers to a shopping mall Fleet and movie theatre, so they could spend time in a Type No Seats Engines more comfortable environment,” Ho says with a sense Boeing 757-200 4 C16Y155 RR RB211-535E4 of pride.

18 A p r i l 2 0 0 7