John Crichton doesn't fly planes anymore, but he is still a blue-sky kind of guy.

"I like to keep my eye on the big picture, accomplishing things, getting things done, doing things that haven't been done before," he says.

In one of his unprecedented moves, Crichton co-ordinated the privatization of Canada's air navigation system. Ultimately, that's how he became president and CEO of Ottawa-based Nav Canada, which he helped launch a decade ago.

Nav Canada, a private non-share capital corporation, operates the country's civil air navigation system and provides around-the-clock air traffic control, flight information, weather briefings, aeronautical information services, airport advisory services and electronic aids to navigation. The firm also markets its technology, which it designs in-house, to other countries.

Ashley Fraser, Business Edge
Nav Canada president and CEO John Crichton believes it is important for the corporation to develop its own technology and market it internationally.

Crichton is the son of a Second World War-era pilot, and has his own flying licence. You could call him a fly-around manager, since he spends much of his time visiting many of Nav Canada's 2,500 properties and 6,300 employees.

But don't blame him for your higher plane-ticket prices.

Nav Canada, he notes, actually lowers costs by reductions, or paybacks, to operators in years when the firm makes money. This year, Nav Can is forecasting about a four-per-cent rate reduction.

His main passion is his work. It's said that he loves to hold an annual dinner for top-performing employees each year.

"My style is to get a good management team around me and then let them go and do what needs to be done," says Crichton.

"I'm not a micro-manager. I let people go and do their things and I'll only get involved where I'm a pest to somebody if I think there's something wrong. Otherwise, I leave people alone, but I tell them where it is we're going and what we've got to do - and let's go do it, folks."

1. Where did your father serve in the Second World War?

"It was all in Canada. When he got his wings, he ended up as one of those top 10 per cent that they kept back to be an instructor. He didn't like that. But that's what they used to do. He was in Ontario and Quebec. Towards the end of the war, he was flying long-range patrols off Vancouver Island, looking for Japanese submarines."

2. What did your father do after he came back from the war?

"He worked in construction as a salesman and sales manager, that type of stuff. (My mother) worked later on after all (six) kids were grown up. She worked in a law office, and then both my mom and my dad started a title-searching business. My father was a guy that could never quit. When he was around 65, he went into business with her as a title searcher and he didn't hang 'em up until he was 84."

John Crichton

3. When did you fly a plane for the first time?

"I got my first licence in 1967. (The first plane I flew was a) Cessna 150. It was something I always wanted to do. I paid for the lessons and eventually got a private licence, and then kept working at it and got a commercial licence. At that point, I decided that I really liked the aviation business and eventually ended up running a flying school in Ottawa. Then it was on to commercial airlines. I went to First Air and stayed there for 23 years. My actual flying was pretty much around the southern part of the country, in Ottawa and Quebec, but I didn't fly that much. I got into management fairly quickly."

4. What made you choose management over flying?

"I guess I just had a flair for it and it probably interested me more. Flying can become very routine after a while."

5. How did the management opportunity come about?

"I was sort of recruited out of the flying school to actually manage the flying school. I did that for a while, and that was fairly successful. The man who was running First Air in those days noticed me and recruited me to come over there."

6. What was your approach to developing air transportation in the North?

"It's a long story, (but) it was really about building a scheduled network that linked up all of the smaller communities in a systematic way, bringing technology to bear into the North, which really didn't have very much in those days. So it was pioneering a lot of the things that people down south sort of took for granted, but which didn't really exist up north. And introducing newer aircraft, pressurized aircraft, faster aircraft and computer reservation systems."

7. What do you think the effect of all that has been?

"It has been very positive. Today the North has a system, a network of airline services from different airlines that closely resembles what you see in the South. But back in those days, it was radically different and very hit and miss. I mean, it was not unusual for someone trying to get out of a place like Iqaluit on Baffin Island to wait a week or two before they could go to another community. Now, there are daily flights. You can go from Ottawa to Clyde River the same day."

8. How has the demand for air traffic and air travel there changed since the 1970s?

"It's gone up by a multiple ... the cargo, passenger traffic, mail traffic - it's multiples. People now get fresh fruit and vegetables in the store that are flown in every week. It's a radical change from, you know, 30-35 years ago. Passenger travel back in those days was limited to people who were deathly ill or government officials. Now, people are travelling for all the same reasons they do down south."

9. Why did you develop a route between Iqaluit and Greenland?

"We thought we could make money. There's a strong community of interests, the Inuit of the Eastern Arctic and the Inuit in Greenland are the same ... They can understand each other. They speak a different dialect, but they all came from the same ancestry. And Greenland, its only links for trade were with Denmark. They didn't have a link with North America, so there was quite a market there for North American goods and for tourism and so on. So that was the motivating force behind starting the route. And the only way people could get to and from Greenland from North America was to go through Europe, so it was a rather long, drawn-out and expensive process."

10. What do you think that meant for business and trade between the two?

"Oh, it boosted it considerably. I know today in the summer there are two ships a week that sail out of Halifax with goods for Greenland. I think there's one a week in the winter. So it's come a long way."

11. How did you become chairman of the organization that privatized the air navigation system?

"Well, I left First Air in early '94 to become president of the Air Transport Association of Canada (ATAC). Shortly after that, the government indicated its willingness to sit down and talk about the privatization of the air-navigation system. And that sort of thrust me right into the middle of all of that on behalf of the airlines. One thing led to another. Serious negotiations began. I chaired that. The company was set up. I was appointed as its first chairman, led the negotiations, which culminated in the deal being done, and ultimately on Nov. 1, 1996, Nav Canada took over the air navigation system. About a year later, I left ATAC to be the CEO."

12. How did you raise the $3 billion to purchase the air navigation system?

"The actual purchase price was a billion and a half, but we lined up a $3-billion credit facility through a consortium of Canadian banks."

13. What was that process like for you?

"Very interesting. We retained a lead investment banker to put together the financing deal. They did the heavy lifting, but it was a financing built on the actual deal that we were doing with the government, which really was a privatization of a previous government function. It gave us a franchise to operate the air navigation system and to set and collect the charges in accordance with our costs, which is the basis of the financing. There were a lot of details to it, but it all came together."

14. What were the negotiations like, as far as privatizing the organization?

"Very complex. Very long, drawn out. The ANS (air navigation system) is a big creature. It's coast to coast to coast, and has all kinds of various complicating factors when you're talking about purchasing and papering a deal of 2,500 separate pieces of land and 6,300 employees. All kinds of agreements, contracts (and) so on had to be documented and valued. It was a process that began in the spring of '95 and ended up with the closing in November of '96. It took about a year and a half. Lots of lawyers and accountants and negotiations and a million and one details, so it was a very intensive year and a half."

15. What was it like to actually hand over a cheque for $1.5 billion?

"It was interesting, but it was actually 16 cheques, because the banking system then would not write a cheque for more than $100 million.

So we had to give 15 cheques for $99,999,000 and then the 16th cheque made up the rest."

16. How were you affected by 9/11?

"We lost right off the bat, (15) per cent of our traffic, which meant we lost (15) per cent of our revenue. The challenge for us is that we're pretty much a fixed-cost business because we have a service mandate where we've got to provide service in all the airspace 24/7 regardless of the volumes of traffic. Therefore, our costs kept running, but our revenue fell off. That gave us an enormous challenge to deal with until the traffic came back - and it took three years for the traffic to come back, so financially it threw us off plan. It caused us to increase our rates to customers for a while, and we're just now back to a more steady state where we've been reducing them again."

17. What do you see as the challenges for Canada's airline industry and Nav Canada this year?

"They're the same as they've always been. The airline industry is hyper-competitive, so (the challenges are) keeping your costs down (and) keeping your customer service up. They've got lots of challenges on the cost side. The price of fuel is an obvious issue and it's something they don't control. We have challenges related to our own cost control.

"We've got to provide a service 24/7 - regardless of traffic offering - and that means we've got to be pretty smart about how we achieve productivity. This means developing and deploying technology that allows people to do more with less, which, fortunately, in this business is a possibility. But you still have to have the wisdom to know the right ways to do that and to develop it and get it out there. If the economy goes into recession or the U.S. economy goes into recession or if there's a pandemic of some sort or another, it could very negatively affect our traffic and therefore, our revenue. We saw that after 9/11. There's no end of challenges, but a lot of ours are focused on our cost structure, because unlike most companies, we can't really influence our revenue."

18. How is Nav Can marketing its technology internationally?

"One of the things we did after we took over was change the way technology was developed. Historically, under the government, technology was developed by contracting it out to system developers and suppliers. (But) we had our own engineering and computer science people develop the technology. It's more efficient, it doesn't cost us as much and we get it done faster. And we own it. Because we own the intellectual property rights, (we) are now selling it to other countries. And the profits that we get from that go into a single till and help lower the costs for all of our customers, which gives them some payback. It's only appropriate, since it was their money that helped develop the technology in the first place. We think we have the world's most sophisticated oceanic air-traffic control system. So did the British, so they bought it. That's a pretty big deal. We developed an automated tower terminal electronic-flight-strip system, which we use in our own facilities across the country. We also sold that to the British, so the four London airports are now using it. We also sold it to the Danes, put it in their new tower in Copenhagen and we're working with a number of other countries to buy it as well. Historically, air traffic controllers worked with paper strips that keep track of the aircraft and all the changes on paper flight strips. And this system replaces that with touch-screen electronic technology. I'd say we've been averaging $10 million a year (in revenue) ... Because we're establishing relationships with other ANSs, it enables us to enhance and further develop those systems and others. It's one of these situations where everybody wins. But we're the only ANS in the world that really develops its own technology. Everybody else is still using contractors."

19. What are you hoping your legacy will be at Nav Can?

"Being somebody who had a good idea and stuck to it and it was successful."

20. What will you do when you're not running Nav Can anymore?

"I don't have any plans to retire at the moment, so I haven't really thought about that. All I can say is I'm not the kind of person who is very happy sitting around doing nothing, so I'm sure I'll be doing something. I just don't know what that would be."

John Crichton

* Title: President/CEO.

* Born/raised/age: Ottawa, 61.

* Education: Attended Carleton University.

* Family: Married with four children and one grandchild.

* Career: Crichton launched his career in the aviation industry while in university, when he obtained his pilot's licence and managed a flying school. He was recruited to work for First Air, which operates primarily in Canada's North. After 23 years with First Air, he became president of the Air Transport Association of Canada (ATAC). Shortly after joining ATAC, he helped privatize the federally owned air-navigation system. He spent about a year as chairman of ATAC before joining Nav Canada in 1997.

* Passion: Aviation.

Nav CanadA

* Brass: John Crichton, president and CEO; William Fenton, chief financial officer; Rudy Kellar, vice-president of operations.

* Profile: Ottawa-based Nav Canada operates the world's second-largest civil air-navigation system - based on flight hours controlled - and provides around-the-clock air traffic control, flight information, weather briefings, aeronautical information services, airport advisory services and electronic aids to navigation. The firm also markets its technology, which it designs in-house, to other countries. Nav Canada purchased the air-navigation system from the federal government in 1996 for $1.5 billion.

* Stats: Nav Canada has 5,300 employees who serve as air traffic controllers, flight service specialists, electronics technologists, operational support specialists, engineers, managers and administrative staff and manage 18,672,000 square kilometres of Canadian airspace. The company operates seven area control centres (in Vancouver, Edmonton, Winnipeg, Toronto, Montreal, Moncton and Gander, Nfld.) along with 42 control towers, 60 flight-service stations, seven flight-information centres, 38 maintenance facilities and 50 community aerodrome radio stations which provide weather information in the North. It also has 45 radar sites across the country and employs a network of 1,000 ground-based aids to navigation.

* Corporate Structure: Nav Canada is a non-share private corporation that collects user fees based on aircraft weight and distance travelled. Any profits in a given year are returned to customers in the form of rate reductions. The rate reduction for the 2007-08 fiscal year is set at four per cent. The company has no majority owner. The governing board consists of Crichton and four representatives from airline carriers, one from general and business aviation, three from the federal government, and four independents appointed by the board.

They control $1.95 billion worth of bonds and medium-term notes outstanding.

* Website: www.navcanada.ca

* HQ: 77 Metcalfe St., Ottawa, K1P 5L6

* Phone/Fax:. 1-800-876-4693/(613) 563-3426.

(Monte Stewart can be reached at monte@businessedge.ca)