From Charter to Regional

Aug. 8, 2005
Once a float plane operation serving Northern Ontario, Bearskin Airlines has grown in the past 40-plus years to become a scheduled airline that continues to offer charter service.

THUNDER BAY, ON — Once a float plane operation serving Northern Ontario, Bearskin Airlines has grown in the past 40-plus years to become a scheduled airline that continues to offer charter service. According to Brad Martin, director of operations, the airline is now focusing on a transition to a one-type aircraft fleet; it will then reevaluate the communities it serves — and those it doesn’t — for growth opportunities. It places an emphasis on technology and the need for training.

Bearskin Airlines started in 1963 as Bearskin Lake Air Service in the small, native settlement of Bearskin Lake, some 385 miles north of Thunder Bay, according to Martin. A float plane operation, the company expanded service to neighboring Big Trout Lake and eventually moved into twin-engine aircraft.

In 1978, the airline established a base at Sioux Lookout, some 276 miles south of Big Trout Lake, providing scheduled airline service between the two cities. Throughout the years the airline transitioned from operating Aztecs to Navajos and then to Beech 99s.

Bearskin expanded by setting up a base at Thunder Bay International Airport in 1980, picking up a NorOntario contract, explains Martin. “This provided Bearskin a network that linked from Sioux Lookout to Thunder Bay and all the way out to Winnipeg.”

Martin says the airline saw “constant expansion” from the 1980s up until the early ‘90s. In 1992, the company acquired two Fairchild Metroliners and took on new routes eastward out of Thunder Bay to Ottawa and Sudbury. The airline also operated Pilatus aircraft in its fleet.

Most recently, the carrier has made the decision to consolidate its fleet and stick with one type of aircraft — the Metro. “The idea now is to run a single type fleet and operate our route structure that way,” says Martin.

Advantages of a single fleet type are numerous he says, including pilot training, parts, and maintenance training.

Rethinking the Business

In 2003, the airline inked a deal which Martin says was a turning point for Bearskin. “We sold off all our routes where we started out in Northwestern Ontario,” says Martin. “There were 18 communities that we serviced up there which we sold to Wasaya Airways.” Bearskin entered into an agreement with Wasaya in which Wasaya acquired all Bearskin routes in the region, along with some aircraft and infrastructure.

The Northern routes, explains Martin, were Aboriginal communities. “Wasaya is an Aboriginal airline and they wanted to serve their own communities. Rather than gear up to compete against us, they asked us if we’d be interested in entertaining a buyout on those corridors. That was a bit of a turning point.

“We were pretty much focused at all times for all of Northern Ontario and Northwestern Ontario, so it required a rethink of what we do with our business; now we’re predominately a 19-passenger commuter, pavement to pavement operation, as opposed to having gravel and pavement operations. It’s a big difference in how you operate an airline.”

Martin says that the divestiture of those routes also helped the airline to justify its shift to a one-type aircraft fleet. “The Metros are where we want to be and what we want to do.”

Technology Tools

Aircraft are not the only tools the airline needs to be successful, says Martin. The company has been evaluating its technology needs and requirements to become more cost-efficient and effective.

“We sourced out some software providers and tools to help the airline grow in that end. We changed reservation providers and went with Sabre Systems, which has been a really good thing for us to date. And we went with a revenue management system to enhance our revenue on the corridor and to place us in a very competitive position, flying pavement to pavement, against other competitors.”

Integration allows the maintenance, revenue, reservations, and planning systems to communicate with one another. “For example, when a part comes in, everybody can follow it right through to where it goes and what airplane it went on, to how much it costs, and then calculate the cost of doing business,” says Martin.

“It all comes down to how much do you sell a ticket for and are you actually covering your costs. The integration made it very clear as to where our costs really were as opposed to saying, it costs this much and we made this much, but now try and find out where our costs are. It helps pinpoint exactly where the costs are. The software that we now have also shows us exactly where the revenue is to the point of what time of day it is.

“We certainly want the tools in place to continue to grow. And we’ll spend our money on that.”

Looking Toward Growth

Bearskin operates two main bases, one at Thunder Bay and the other at Sioux Lookout Airport. Both locations have maintenance bays to maintain the airline’s fleet. Currently Bearskin serves 15 cities, not including its charter operations, and operates eight Metros, an A100 King Air, and three Beech 99s. Some 270 people are employed with the airline.

Looking ahead, Martin sees the airline continuing to phase out its Beech 99s and King Airs and expects those will be replaced with Metros. “With that said, we’ll either fill in the gaps in our schedules that we feel that we have based on the information we’ve garnered, or we’ll expand to new locations. Once that’s done, we’ll take a look into whether or not the frequencies match to what the customer wants, as opposed to increasing the gauge of the aircraft.”

Martin says there is always the possibility of moving to a larger size aircraft if passenger traffic grows. But the main focus now is to complete the transition to one aircraft. “If demand is there, and I believe it will be there, I can see us into the next size aircraft.”

Bearskin operations on a hub basis, says Martin, with hubs in Thunder Bay and Sudbury.

“Our focus is on building a new schedule on paper and seeing exactly what we would need to accomplish that schedule, and then running the numbers to make sure it works. And then moving the company in the direction to make it happen. We’re always planning to see where we can go.”

Many of the communities the operator serves, including Thunder Bay, have economies which rely heavily on natural resources, such as forestry and mining. Martin says the activity of the airline certainly reflects how those industries are faring. “When those hit a low, so do we for passenger travel.” However, he adds, “2005, we’ve noticed, has done very well for passenger travel.” In 2004 the airline carried some 115,000 passengers on its scheduled service.

Martin says the charter side of the airline will continue, even after aircraft other than Metros are removed from its fleet. “We’ve worked with the theory that we need a spare,” he says. “And the spare will also double as a charter aircraft.”