Celtic Air Services is launching a regional charter service out of the Allan J. MacEachen Airport in Port Hastings with a Cessna it picked up when it bought out Axair Aviation this month.
Under the terms of that deal, Celtic Air picked up the Saint-Hyacinthe, Que., aviation company for an undisclosed amount in the seven figures. A twin-engine, eight-seater Cessna was part of that package.
“In the next few weeks, we hope to launch sales of air charters for people to travel around eastern Canada and into the eastern United States,” said Celtic Air president David Morgan in an interview.
“This is a plane that can go from Port Hastings to Montreal or Boston, all your luxury destinations along the Eastern Seaboard.”
Last week, the Cessna was still in a maintenance hangar after passing all its inspections. A pilot for the charters has already been hired. She is scheduled to spend time in a flight simulator ahead of the service being offered.
Celtic Air even has a website ready to go to start taking bookings. All that’s missing is the green light from the Canadian Transportation Agency, said Morgan.
Although this foray into the charter airline market will more than double Celtic Air’s pre-existing debt of about $1.2 million, the Cape Breton company’s top exec says the move is important to adapt to the changing marketplace during the pandemic.
Last year, Celtic Air was in the black with revenues of about $1.5 million.
Low traffic, high impacts
The company was offering all the services necessary for the roughly 1,000 private jets that used the airport every year. It’s newly acquired helicopter, bought in 2018, took local residents and American and German tourists up for 15- and 20-minute tours from Chéticamp along the Cabot Trail.
Visitors from outside the region accounted for about 75 per cent of the business for those tours in Celtic Air’s Robinson R44 four-seater helicopter. That business is gone.
When the pandemic hit, governments throughout the world imposed travel restrictions. Tourists from Germany and the United States – and the rest of Canada outside the Atlantic bubble – can no longer come to Cape Breton.
In less than a year, Celtic Air’s revenues have plummeted by about 90 per cent, to roughly $150,000. That’s less than the company needs to pay its bills.
“It costs $30,000 per month just to keep the lights on,” said Morgan.
“It’s not a position I like to be in.”
Without Ottawa’s help in the form of the Canada Emergency Wage Subsidy, which covers about 75 per cent of an employee’s regular wage, all workers at Celtic Air would have been laid off, he said.
“This year, we have nine employees, at this point,” said Morgan.
“Normally, we’d have another six but we just never scaled up at all.”
Discovering opportunities
While the pandemic put Celtic Air’s major markets temporarily out of reach, it also led to new opportunities.
At the end of June, Air Canada canceled 30 regional routes, including 14 in Atlantic Canada, and closed eight of its stations throughout the country, including those in Bathurst, N.B., and Wabush, N.L.
Morgan smelled an opportunity. When Axair Aviation came up for sale, he pounced.
“That market is going to grow dramatically in the next six to 12 months before Air Canada returns to the market,” he said.
“By then, I hope local business people will have realized air travel is a wise choice.”
Celtic Air has also rejigged its helicopter tour offerings and geared them toward the local market, slashing prices by 33 per cent. A 10-minute helicopter tour was $135 last year. Now, it’s going for $90.
There is also a wider variety of experiences, with tours as short as six minutes and as long as 30.
Although that side of Celtic Air’s operations lost most of its customer base due to the restrictions, the remaining 25 per cent of customers from the region are more than making up for the lost business. Atlantic Canadians are seeking out new experiences, and the helicopter tours are taking off.
“In the past five weeks, we’ve flown more tours than we did all last year,” said Morgan.
“Folks have been amazing.”
In addition to the three tours offered on its website, Celtic Air has just added an Antigonish tour and is planning to announce a helicopter tour of Mahone Bay in the coming weeks.
“We haven’t yet released the details on that but Mahone Bay is central and so anyone on the tour can expect to see many varied landscapes with villages along the coast and amazing islands in the bay,” said Morgan.
Earlier this year, Celtic Air was eyeing the purchase of another helicopter. That was put on hold in the spring due to the pandemic, but the company is still hoping to go ahead.
“COVID-19 forced us into a corner but it also allowed us to do a lot of thinking about our cost structure and marketing and how to use our equipment,” said Morgan.
“We definitely have plans to expand when things return to normal.”
The Pivot is a regular business feature about an Atlantic Canadian company adapting to new market realities with innovative products, services or strategies. To suggest a business, email: [email protected].
