At the story's beginning, we see Porco in his flight suit, resting on a beach surrounded by cliffs. After he finishes negotiating the price of his service via telephone, he leisurely takes off in his red sea plane from his base on the beach of a tiny island to rescue a kidnapped group of young girls. Afterward, he flies to the Hotel Adriano for dinner and spends some time with Gina, one of Porco's closest childhood acquaintances and friends, and the owner of the only picture (albeit a defaced one) of Porco in human form. While at the hotel Porco also meets Curtis, a crack American pilot who is negotiating an employment contract with the pirates. It becomes clear during their conversation that Curtis is measuring Porco as a possible opponent.
Some time later, as Porco flies his plane into Milan for repairs, Curtis shoots him down. Curtis believes Porco to be dead, but Porco is in fact hiding on an island. Porco finishes his journey to Milan and has his plane repaired by Piccolo S.P.A., an aircraft design shop owned by an old mechanic and friend of Porco's. Because of the Great Depression, all men have left the town for work, and the company enlists the aid of the owner's granddaughter, Fio, along with a work force consisting entirely of female relatives. Despite his initial misgivings, Porco comes to realize that Fio, despite her age and gender, is a competent mechanic and deserving of his respect. His plane is completed, and he and Fio fly off together, as the plane is still in its prototypic stages.
Meanwhile in the private garden of Gina's, Curtis invites her to a glamorous life back in America. Gina laughs and refuses (later telling him "love here is more complicated than in the USA"). Stung, he asks who she is waiting for, and Gina tells him she has bet with herself that Porco will one day come into her garden to take her away. Just then Porco's plane appears and circles Gina's garden, but Porco does not land.
Upon landing at his island hideaway, Porco discovers that it has been infiltrated by pirates. Fio talks them out of killing Porco or destroying his plane, and appeals to their honor as seaplane pilots to win popularity among the pirates. Curtis then reveals himself, and challenges Porco to a duel. The terms are then agreed upon; if Porco wins, Curtis will pay off his airplane repairs. If Curtis does, Fio will marry him.
Later that night, Fio wakes up and glimpses Porco in human form, but is not sure. She asks him to tell her a story. He tells her about a strange incident that happened to him during his years in the air force. In the last summer of the war, Porco saw his best friend and fellow fighter Bellini marry Gina. Straight after, they were back in the skies and attacked by an enemy squadron. Eventually, Porco realised he was the only member of his squadron left. He fled the fight, but was exhausted and struggling to operate the plane's controls. He later wakes up, finding that his plane has piloted itself into a cloud of startling brightness and purity, so that he imagines he is in heaven. Eventually emerging at the top of the cloud, he spots a white band high above him. The other pilots and their planes from the battle emerge around him and climb to the white band, which is revealed to be a procession of planes downed during battle. Bellini also climbs to the band, while Porco shouts that he must not leave Gina. Bellini, apparently deaf to Porco's cry, does not turn. Porco admits that this incident is a great source of guilt for him, and it is unclear as to whether this caused his transformation.
(Note that Porco's story is very similar to Roald Dahl's short story "They Shall Not Grow Old" for his collection of short stories "Over To You", first published in 1946.)
The next day, Porco and Curtis meet for the dogfight. The duel is held on a secluded island, organized by pirates, and heavily bet on by criminals and seaplane pilots alike. At the fight's beginning, Porco merely avoids Curtis, baiting him into wasting bullets. However, as the fight progresses, Curtis begins to understand the strategy and starts conserving his ammo. Porco outflies Curtis and gains the superior firing position by using the loop maneuver which made him top Ace of the Adriatic during the war, but he does not shoot at Curtis. Curtis thinks that his enemy's guns are jammed, but the real reason is revealed to Fio by one of the pirate bosses: Porco will not take a shot at an enemy if there is a risk of hitting the pilot, and so Porco will try to outmaneuver Curtis until he has a clear shot at the plane without endangering the pilot. Curtis taunts the pig that his guns are jammed, but is quickly shut up by a short burst of fire from the red seaplane. This is the start of a stalemate, with each pilot attempting to gain the advantage over the other.
Meanwhile, Gina has received a message from a friend that the Italian Air Force, who have an arrest warrant out for Porco, are rushing toward the fight, and she takes it upon herself to warn Porco.
Back at the fight, both pilots are extraordinarily tired, and beginning to fade. However, after some time, Porco finally has gained an angle for a clear shot at Curtis' engine, but is dismayed to find that his machine gun is jammed and he cannot do anything. Curtis sees this vulnerability, and attempts to shoot Porco as well but discovers he has run out of bullets. Both eventually settle on throwing debris from their planes at each other, until they land in the bay and the duel degenerates into a fistfight. Both are quickly exhausted, and eventually fall into the surf.
At this point Gina's plane arrives. She tells Porco to get up, and in doing so, he wins the fight and the duel. Gina then gives her warning to the island's inhabitants, who all promptly flee from the approaching authorities. Curtis respectfully holds up his end of the deal and pays Fio. As she leaves with Gina, she kisses Porco and he falls into the water, bowled over by the wake of Gina's plane. Porco tells Curtis that he is going to draw the Italian Air Force away from the others, and asks if Curtis wants to join him. Curtis agrees, and then exclaims, "Hey! Your face!" and demands that Porco give him a closer look, but Porco resolutely continues to walks towards his plane. It is implied that he has once again changed.
