A Winnipeg company has signed a $32.5-million letter of intent to purchase Bearskin Airlines.
Bearskin executive vice-president Cliff Friesen on Wednesday said the deal will help the airline continue to progress and grow.
"There’s an opportunity here," said Friesen, who will retain his position with Bearskin, despite the sale. "Exchange Income Corporation approached us about buying our airline. We have now come to an agreement and have signed a letter of intent."
Friesen said he’s hopeful the deal, which awaits the completion of due diligence by EIC, will close by the end of November or early December.
"We have to go through the process of getting the aviation authorities to approve it. So there’s a lot of work yet to be done prior to closing."
Friesen said there should be little or no outward change to Bearskin’s operations.
"The operation of the airline is still going to remain at the direction of the ownership group that is here today. One thing that EIC does is they allow people to run the airline (for them)," Friesen said.
EIC currently owns three airlines: Perimeter Aviation, Keewatin Air and Calm Air. The company also operates specialty manufacturing firms that build custom tanks for oil and gas transportation, heavy duty pressure and steam washing systems and precision sheet metal and tubular products.
"They all run independently and we will have that same operating ability. There will be no change in … the management of the company and/or the staff," he said. "Customers should not have any concerns at all because it’s business as usual and there aren’t going to be any changes at all to the company.
"There may be enhancements as we go forward, and more opportunities for the growth of the airline. That’s what EIC’s direction is when they buy companies like (us)."
Friesen added Bearskin Airlines will continue to look into taking over Delta’s abandoned route between Thunder Bay and Minneapolis.
It remains a priority over the next month or so, he said.
EIC’s history was the main reason the brothers decided to sell the airline after nearly five decades of operation
"Their track record with their other aviation companies was a key driver in our decision to sell. It is a rare combination to find a buyer that has the access to capital that EIC brings, yet still enables us to keep our core culture and values that have driven the company to its current level of success."
According to the company website, Bearskin Airlines was founded in 1963 by bush pilot John Heglund, who named the company after Bearskin Lake, a remote First Nation community some 435 kilometres northeast of Sioux Lookout. It was bought by Henri Boulanger and Bert Cone in 1965. Harvey Friesen, originally a pilot for the company, bought a 50 per cent share in 1972.
Five years later Harvey Friesen bought his partner out, and a year after that brother Cliff Friesen purchased his share of the company and assumed his executive vice-president role.
The airline’s first scheduled route, between Big Trout Lake and Sioux Lookout was launched in 1977. Thunder Bay was added to the destination list in 1978.
Eventually the company began a partnership with Air Canada, providing service to Northern Ontario cities and by 2003 it flew into 40 different destinations.
Today Bearskin has more than 100 daily scheduled flights to 17 different destinations. The company generated $47 million in revenue last year and owns and operateds 14 Fairfield Metro Aircrafts, each with a 19-passenger capacity.
EIC president and CEO Mike Pyle, in a release, said the deal is a natural progression for his company, adding it will help accelerate growth on a number of levels.
"Most notably, it allows our aviation segment to expand its operations into select markets in Thunder Bay, Sioux Lookout, Kenora and Dryden," he said. "Equally important, it complements a number of our existing routes in Manitoba, providing opportunities for increased synergies and efficiencies for all of our aviation segment subsidiaries."
According to the release, 10 per cent of the purchase price will come through the issuance of EIC shares. The remainder will be financed.
