These fighter pilots flew some of the Canadian military's most dangerous missions. But not even
"Top Gun" training could prepare them for their
riskiest manoeuvre yet: starting their own company
CRAIG DANIELS
Report on [Small] Business Magazine

The instant the landing gear of Didier Toussaint's CF-18 fighter plane touched terra firma at Thunder Bay airport 10 years ago, his morning unexpectedly "got a lot less fun real fast." A component designed to hold the right main wheel straight when the landing gear deploys had failed, causing the wheel to partly collapse. But Toussaint didn't know that yet. All he knew was that he and $37 million worth of fighter plane were now angled toward the infield, travelling diagonally across the runway at more than 275 kilometres an hour. If he skidded off, his day would be well and truly ruined.

With no time to think, Toussaint responded purely by reflex. He punched the throttle and partly retracted the flaps. On cue, his two turbofan engines answered, and the jet was slung back into the air. As he climbed, Toussaint collected himself and ran through a troubleshooting matrix, searching for the best way of getting back on the ground in one piece.

He had two immediate problems: The wheel wasn't going to fix itself, and he didn't have enough fuel to go looking for another landing strip. And so with fire trucks and an ambulance on standby, and with a runway far shorter than he would have liked, Toussaint began a new approach. He did so knowing his malfunctioning right wheel would likely cause his airplane, and possibly him, a whole lot of hurt.

When the wheels hit the ground this time, the jet began veering "30 degrees right, then 30 degrees left," Toussaint remembers. As he fought for control, "the tower was screaming" in his headset that his jet was on fire. "I'm thinking, 'Well, if they're screaming I'm on fire, the jet is probably gonna explode, so I better egress out of here, pretty fast.'" He skidded in at a 90-degree angle, finally stopped the jet, got out and ran as fast as he could.

As Toussaint recalls that day, he speaks with the measured, matter-of-fact confidence of someone with 5,000 flight hours, a NATO tour of duty in air campaigns above Bosnia and Kosovo, and a 14-year career in the Canadian Forces. "Those situations happen," says the 37-year-old Toussaint of his crisis in Thunder Bay. "But it's all about having the ability to handle it-or knowing you're handling it even before it occurs." In other words, being ready for all possibilities. "What's fun is being in control of very challenging situations," he says. By that definition, Toussaint and his partners, Paul Bouchard and Dave Jennings, are having more fun than should be allowed.

In December, 2000, the three former military pilots formed an aerospace company called Top Aces, based in Pointe-Claire, Quebec. Their goal: to win contracts from the Canadian government worth up to $93.9 million to play the bad guys against Canada's elite corps of fighter pilots-a risky job that involves simulating cruise missiles and hijacked commercial airplanes, testing the air defences of navy ships and teaching CF-18 fliers how to perform under intense pressure. Think Tom Skerritt's Viper going up against Tom Cruise's Maverick in Top Gun. Toussaint, Bouchard and Jennings's transition from fly boys to soldiers of fortune began in 1998, with an itch for change. They had achieved everything they'd set out to do as military pilots. Each was a graduate of the Canadian Forces' prestigious "Top Gun" school, more formally known as the Fighter Weapons Instructor Course. Only four out of 80 pilots each year are selected to take the intensive three-month course. "It's the fighter pilots' graduate program," says Major Brad Williamson, the operations officer at 410 Squadron, a training unit based in Cold Lake, Alberta. "It's as far as you can go."

They had also qualified as Multi-Role Mass Attack Leads, the highest achievable combat-readiness level, qualifying them to lead large formations, or packages, of airplanes. Toussaint and Bouchard called upon those skills over the skies of Bosnia and Kosovo in the mid-'90s. But then they both got married, had kids; Jennings did too. It was time for a new challenge. And so between 1998 and 2000, each man decided to make the career move common for fighter pilots: a relatively secure and stable job with Air Canada.

But once they were at the airline, it became apparent to them that something was missing. Picture Michael Schumacher giving up Formula One for a job with Greyhound. "By its very nature, airline flying has become more and more predictable and more and more standardized," Bouchard says. "It's what makes airlines so safe."

Air Canada, however, proved to be the perfect springboard for a foray into small business. Transport Canada's and the airline's safety restrictions on flying hours meant all three men had plenty of spare time on their hands. Each started an aviation consulting business and discovered there was an appetite in the private sector for the technical and problem-management skills they'd learned in the military. Collectively and individually, they landed contracts with companies like Northrop Grumman, McDonald's, Clarica, Canada Trust and Pfizer. While Toussaint, Bouchard and Jennings were moving into private enterprise, the Department of National Defence, faced with budget shortfalls and staff shortages, was doing the same. It began looking at the idea of outsourcing some of its operations-specifically airborne training. In February, 2002, it issued a request for proposals, with bids due the following January.

On offer was a single long-term contract to provide a range of services. When no company met the guidelines, DND came up with an interim strategy: It would narrow the contract's focus and put out a three- to five-year standing offer to provide services for the air force, army and navy.

Seeing an opportunity, the former fighter pilots initially thought about teaming up with a company like Bombardier to help provide the service. Then, as Jennings recalls, it hit them: "We could do this on our own." The decision to go ahead was made in July, 2004, a mere two months before the proposal deadline. They attacked in formation.

"There's a lot of entrepreneurial spirit in being a fighter pilot," says Bouchard. "You're given a target, and you're leading a mission of 50 to 100 aircraft. But once the general makes you the formation leader, you have almost free rein to conduct that mission as you see fit." The popular perception is that pilots will run any risk, regardless of the odds, to ensure the mission is accomplished. Bouchard says the truth is far more complicated. "I'm not afraid of risk, and I understand there's risk in everything you do, but I wouldn't characterize myself as a 'bet the farm' kind of guy."

What Bouchard and his colleagues have been trained to do since they were 18 years old is plan for risk, measure it and then decide if the rewards are worth it. Their ability to do that, while flying 1,000 kilometres an hour and enduring pressures up to 7G in an environment where people are literally trying to kill them, speaks to their success to date. Indeed, that ability to assess risk and to assimilate an enormous array of information while travelling at the speed of sound may well be precisely the quality that separates a successful fighter pilot-or a successful entrepreneur-from the pack.

A key to their success in landing the DND work would be to select the right aircraft, a decision that might seem straightforward, but one that stood to derail their bid and potentially bankrupt the company. The jets had to be powerful, fast and versatile. They had to be safe, and they had to be easy to maintain. And, most important, they had to be available. DND wanted a plug-and-play solution: the pilots in the planes, ready to go.

Toussaint, Jennings and Bouchard began the selection process. Within a month, six choices were whittled down to two, then one: the German/French-designed Dornier Fairfax Alpha jet, a light, highly manoeuvrable, twin-engine, two-seat fighter used by Germany's Luftwaffe for close air support and training during the 1980s. A number of them had been mothballed in the early 1990s when the German air force decided to buy another type of plane. Although slower than CF-18s, the $1.5-million Alpha jet is more nimble and can turn more tightly. The twin engines add reliability for cross-country flights over sparsely settled regions of Canada. Moreover, they were in mint condition.

They came with a very big caveat, though-a $200,000 non-refundable deposit was required to even place a hold on the jets. Without the hold, there could be no submission to DND. But if they lost the bid, the money was gone. "I very much remember that day," says Bouchard. "It was real gut-check time. We evaluated the risk and said, Well, it's worth the potential reward."

On Feb. 23, 2005, they won the three-year $93.9-million standing-offer package, plus a $31-million option for each of the following two years, beating out four other established aerospace companies, including the vastly bigger and better-connected Bombardier. What was their competitive edge? Brian Watson, director of major services procurement (air) at National Defence, will only say: "Top Aces was the lowest-cost technically compliant bidder."

While the competitive bids, of course, remain confidential, there's no question that Top Aces' proposal represented a huge savings for DND. Every hour a CF-18 is in the air costs $30,000; every hour that one of the Alpha jets is airborne costs $10,000. All told, Top Aces promises to save the military up to $28 million over the next three to five years.

There was jubilation, says Jennings, but also a realization that the company was now on the hook to provide an extraordinarily complex service. It was also hundreds of thousands of dollars in the hole for costs incurred while securing the bid. As a result, the trio had to begin generating revenue immediately, a task complicated by the fact they didn't, as yet, have a single jet in the hangar. "We understood we had a significant challenge," says Jennings. "We had to build the business. We had to acquire the aircraft and the equipment. We had to bring on pilots and maintenance people, and we had to find investors and financiers to support us in what was, at the time, a relatively risky venture."

Persuading investors to finance a start-up without any track record, one operating in a rare and risky environment, proved anything but easy. "We had to do our pitch [what seemed like] hundreds of times," says Toussaint. "To find somebody who'd believe in you and what you do, and say, Here's a cheque-that was very difficult."

But it got done. The group obtained $6.5 million from Roynat Capital Inc., and later, $6.5 million in long-term financing from Wellington Financial LP, a specialty finance firm. "This is certainly a niche," says Chris Nelson, Roynat's manager of equity investments for Eastern Ontario. "At the end of the day what we really backed was the get-up-and-go and energy of these guys."

Having scored the financing, they now needed to get the jets. The Alphas they wanted were owned by Abbatare Inc., based in Arlington, Washington. Importing aircraft isn't easy at the best of times, requiring the consent of both Transport Canada and the Federal Aviation Authority in the U.S. When the planes in question can fly at almost 900 kilometres an hour and can be equipped with missiles, the U.S. State Department wants to know about it.

After weeks of discussions, permission was arranged. There was still, however, the Canadian bureaucracy to contend with. Starting up even the most basic air service requires submitting hundreds of pages of documentation. What Top Aces was proposing, however, was a service that had never existed, using jets that had never been certified in Canada. Moreover, it needed to operate them under the authority of both Transport Canada and the Department of National Defence, requiring the co-ordination of both agencies. More than nine months after they began the process, Toussaint touched down at Montreal's Trudeau airport with the first of the eight Alphas.

On a sunny day in May, one of Toussaint's pilots, Marc Taillefer, runs up the engines of the firm's newest Alpha jet for a test flight. The plane is sitting on the apron of Trudeau airport, just outside the offices of Execaire, the firm hired by Top Aces to maintain its aircraft. The power generated by the Alpha's twin turbofans, together capable of producing 5,952 pounds of thrust, is raw enough to make your chest vibrate.

Taillefer spends 15 minutes doing his run-up, but, unsatisfied with what his instruments are telling him, he finally decides to shut the engines down.

Had he been about to set out on a mission against the Canadian Forces, he would already have logged several hours in briefings, ensuring the mission had a clear goal and a plan to achieve it.

Fighter pilots like Taillefer work hard to avoid what they call a "merge"-they no longer use the term "dogfight"-where two or more airplanes spar at close range in the quest for a killing shot. The merge is also known as a "furball." Picture Road Runner with a bunch of animals battling one another in a frantic, tumbling scrap.

The biggest concern, of course, is getting shot at. A close second, though, is hitting one of your own guys amid the chaos. The preference is to avoid a furball altogether and lock onto the target from kilometres away, fire a missile and return to base. It saves fuel, time and energy, and minimizes the risk of collision. It's called "beyond visual range" fighting. While the enemy tries to elude your missile, you go home for tea and medals. Of course, it doesn't always work out that way. Once you're in combat, there's always the chance of plans going sideways.

And as Toussaint, Bouchard and Jennings have discovered, what's true in battle is true in business. From wagering on the bid to beating out much larger competitors for the deal, at any moment their mission could have careened off course. But, as Toussaint learned that morning in Thunder Bay, when you're fighting for survival, sometimes the only way is to recognize the risks, know the reward and hit the gas.