EIC buys MFC

[bobcaygeon]

Creating their own pilots for their airlines???

https://www.skiesmag.com/press-releases ... t-college/

[BE02 Driver]

I'd say that's exactly what they are doing. And as such securing their future going forward in this increasing pilot shortage.

[digits_]

I doubt that's their only motivation though. There is no shortage for 200 hour pilots anyways, which is what MFC "produces". If it is the reason why they did it, then it's probably a good sign they are expecting this shortage to last...

[MarkyMark90]

There is no shortage for 200 hour pilots anyways, which is what MFC "produces".

Keep in mind the 4000 hours TT shortage impact all the level of expériences...

AC recruits at lower times
Regionals recruits at lower times
Charters recruits at lower times
Flight School are having a hard time retaining instructors
No instructors = No graduation of 200 TT students

No graduation of 200 TT students = No future instructors
No instructors = Less charter pilots available
Less charter pilots = Less pilots at regionals
Less pilots at regionals = Less pilots at AC

As long as there is more retirement than graduating students, the problem will grow. We already see a shortage of Class I instuctors in Montréal, and I know a school who's having a hard time keeping up with the training of instructors for the amount of students on record and the amount of instructors leaving for Jazz and some other charters.

Expect the total times requirements to continue to go down in the few years to come.

[bobcaygeon]

No shortage of 250hr wonders but they have instructors (+90). If they can keep instructors around by offering them jobs at one of their subsidiaries then it may work. At least a few of EIC companies already hire their instructors.

[digits_]

No shortage of 250hr wonders but they have instructors (+90). If they can keep instructors around by offering them jobs at one of their subsidiaries then it may work. At least a few of EIC companies already hire their instructors.

But why would they want to work at Wasaya/Bearskin/... if westjet and jazz are hiring? Most pilots still want to go to the "big" airlines. I can see the general idea, but I fail to see how the specifics would help them. They might as well end up with a flying school without instructors or with an ample supply of 200 hours which they could already hire if they wanted to anyway.

[J31]

Just so all know what is being talked about.....

Exchange Income Corporation (EIC) announced it has entered into an agreement to acquire CANLink Global Inc. (Moncton Flight College) for a purchase price of approximately $35 million

[fish4life]

Isn’t the majority of the students on MFC foreign students that are going to go fly an airbus anyway? Why would they want to go . bags up north?

[Cessna 180]

Isn’t the majority of the students on MFC foreign students that are going to go fly an airbus anyway? Why would they want to go . bags up north?

They can get them to become flight instructors then have em work for them under temp visas "so they can get some Metro time before they fly the Airbus." Probably cheaper that way and they will likely stay longer.

[fish4life]

Isn’t the majority of the students on MFC foreign students that are going to go fly an airbus anyway? Why would they want to go . bags up north?

They can get them to become flight instructors then have em work for them under temp visas "so they can get some Metro time before they fly the Airbus." Probably cheaper that way and they will likely stay longer.

but why would the student want to stay is my question

[rvdungen]

None of the Chinese students are here by their own choice and 99% of them want to get back to China as fast as possible. Any thoughts of using them in a TFW capacity especially when they want to be on an Airbus or Boeing in China is hilarious.

[BE02 Driver]

No shortage of 250hr wonders but they have instructors (+90). If they can keep instructors around by offering them jobs at one of their subsidiaries then it may work. At least a few of EIC companies already hire their instructors.

But why would they want to work at Wasaya/Bearskin/... if westjet and jazz are hiring? Most pilots still want to go to the "big" airlines. I can see the general idea, but I fail to see how the specifics would help them. They might as well end up with a flying school without instructors or with an ample supply of 200 hours which they could already hire if they wanted to anyway.

Short sighted. Look at the number of airlines EIC owns. They could amalgamate and form a large regional airline. Puts them in a position for a CPA with someone. They might just be the next Jazz. And there's no signs of the M&A's slowing down.

[bobcaygeon]

I doubt that. Look at Chorus Aviation's financials. CPA's pay shit for ROI.

[flyingjerry]

Because it hasn't been stated yet:

The pilot shortage is global. EIC could easily be acquiring because of more room for profit at the bottom.

- More demand for pilots world wide = more demand for training
- More demand for training worldwide = lots more training in Canada (one of the best)
- More demand in Canada = more at Moncton... you get where I'm going
- More profit

[Cessna 180]

Look what EVAS is doing. There's more demand then just Chinese students.

[BE02 Driver]

I doubt that. Look at Chorus Aviation's financials. CPA's pay shit for ROI.

I have no idea how you came up with that statement. Every financial they have had is up 10-20% across the board. The only decrease is in CPA incentive pay for not meeting OTP etc (approx 4% decrease). The stock is up 50% over the last two years and pay 5.5% dividend.

That appears to be a very healthy stock. In fact I would say it's currently under valued.

Fairfax Financial (Prem Watsa) Canada's version of Warren Buffet felt that a a $200 Million investment in Chorus was appropriate. That says a lot.

I currently have no position in Chorus Aviation.

[digits_]

No shortage of 250hr wonders but they have instructors (+90). If they can keep instructors around by offering them jobs at one of their subsidiaries then it may work. At least a few of EIC companies already hire their instructors.

But why would they want to work at Wasaya/Bearskin/... if westjet and jazz are hiring? Most pilots still want to go to the "big" airlines. I can see the general idea, but I fail to see how the specifics would help them. They might as well end up with a flying school without instructors or with an ample supply of 200 hours which they could already hire if they wanted to anyway.

Short sighted. Look at the number of airlines EIC owns. They could amalgamate and form a large regional airline. Puts them in a position for a CPA with someone. They might just be the next Jazz. And there's no signs of the M&A's slowing down.

Still don't see why having your own flying school would help or be needed. You are still training 200 hour pilots. The pilots either want to work for a Canadian airline, in which case you didn't need to train them yourself, as others are available. Or they don't want to work for a Canadian airline, and then it doesn't matter if you trained them.

As a separate investment, a flying school that is profitable makes sense to buy of course, like any profitable company. But the "buy the school to get more pilots" angle makes no sense to me. Ah well time will tell.

[flaps78]

Has anybody considered that EIC is thinking 5 - 10 years ahead of most of us? EIC could use MFC to train it's own future entry level pilots. For reduced student training costs or a bond, EIC could provide young commercial pilots to it's various aviation companies for a specified period of time. Some will stay longer than others, some will move on ASAP. EIC is NOT doing something new. This training / employment scenario has been operating for many years in Europe. I expect that AC, Jazz, WJ, etc will be pleased to enter into an agreement with the EIC Group to provide trained pilots to them.

250 hours to operate in the RS of a KA 200! Why not? The Euro's have 250 hr pilots in the RS of 320's and 737's. The AOC holders will have to make changes to their Ops manuals. The insurance companies / user groups are going to have to be encouraged to lower their pilot hourly requirements. This can be done by increased training, more hours /sectors on line training.

In addition, MFC makes a profit. In MHO a brilliant move.

Flaps78

[C.W.E.]

250 hours to operate in the RS of a KA 200! Why not? The Euro's have 250 hr pilots in the RS of 320's and 737's

Exactly with only 250 hours they can be trained to fly the way you want them to fly without having to un-train bad habits they may have developed.

[digits_]

Has anybody considered that EIC is thinking 5 - 10 years ahead of most of us? EIC could use MFC to train it's own future entry level pilots. For reduced student training costs or a bond, EIC could provide young commercial pilots to it's various aviation companies for a specified period of time. Some will stay longer than others, some will move on ASAP. EIC is NOT doing something new. This training / employment scenario has been operating for many years in Europe. I expect that AC, Jazz, WJ, etc will be pleased to enter into an agreement with the EIC Group to provide trained pilots to them.

250 hours to operate in the RS of a KA 200! Why not? The Euro's have 250 hr pilots in the RS of 320's and 737's. The AOC holders will have to make changes to their Ops manuals. The insurance companies / user groups are going to have to be encouraged to lower their pilot hourly requirements. This can be done by increased training, more hours /sectors on line training.

In addition, MFC makes a profit. In MHO a brilliant move.

Flaps78

In Europe, people want to make a career out of flying a 737 or a320. So if they get hired from a flight school into that seat, they'll stay forever.
In Canada, people generally don't want to fly a BE20 for their career. So they'll still try to go anywhere else as quickly as possible.
If EIC wants to hire 250 hour pilots, there is ample supply out there already at the moment.
Training pilots for jazz, sure, good business model, but that doesn't help EIC to get pilots themselves.

If there is a shortage in 5 year, and nobody wants to be a pilot, why would they attend EIC's school to get a bond to fly a king air? A shortage implies they could go to the airlines instead as well.

I must miss something, but again, I don't see how this would help for the potential 250 hour pilot shortage.

[bobcaygeon]

I doubt that. Look at Chorus Aviation's financials. CPA's pay shit for ROI.

I have no idea how you came up with that statement. Every financial they have had is up 10-20% across the board. The only decrease is in CPA incentive pay for not meeting OTP etc (approx 4% decrease). The stock is up 50% over the last two years and pay 5.5% dividend.

That appears to be a very healthy stock. In fact I would say it's currently under valued.

Fairfax Financial (Prem Watsa) Canada's version of Warren Buffet felt that a a $200 Million investment in Chorus was appropriate. That says a lot.

I currently have no position in Chorus Aviation.

Good for a CPA carrier but as a business the ROI and ROC is quite low for the capital involved.
Why take 5-10% when you can get more on the open market?

If the pilot shortage continues as predicted why would you crew a plane for cpa rates? Use the “limited resources” where there’s more $$$. It will come down to that.
Jazz is fubar’d the minute someone like Georgian low balls them again for AC flying. Jazz has shrunk significantly.

[oldncold]

Logically it makes sense as most of eic companies have had to park planes over the last12-18 months due to crew shortages .
So if they can get low time 500 hour class 4 or3 instructors to go right seat in a king air or metro . they can keep the wages very low average 28kyr avg eic first officer king air but incentivize the opportuniy to fly alot by offerng a pay hike to an young instructor that may only make 18-25 first year instructing . . most know the wages on the east coast are even lower than central canada or out west . eic desperately needs a pipeline . to feed their companies .

they have made a conscious choice not to pay more to crews . will accept the revovling door if they can feed the pipeline .

[goingnowherefast]

500 hours of instructing, then a year in the right seat of a king air/metro is enough for your ATPL before off to Jazz/Encore. Doesn't solve the shortage of captains. Although, for those chasing tin, money doesn't matter. They just want that instergram picture from the front of a freshly painted CRJ.

a 5000hr metro 3 captain can work for pretty much whoever they want. It won't be the company with salaries in the basement.

[FL007]

Logically it makes sense as most of eic companies have had to park planes over the last12-18 months due to crew shortages .
So if they can get low time 500 hour class 4 or3 instructors to go right seat in a king air or metro . they can keep the wages very low average 28kyr avg eic first officer king air but incentivize the opportuniy to fly alot by offerng a pay hike to an young instructor that may only make 18-25 first year instructing . . most know the wages on the east coast are even lower than central canada or out west . eic desperately needs a pipeline . to feed their companies .

they have made a conscious choice not to pay more to crews . will accept the revovling door if they can feed the pipeline .

I'm not sure where you got that information as I have friends at PAL making more than 40K first year flying the 1900s right seat, the Dash ops are definitely paying more than that, too.

As well that press release has PAL aerospace all over it? Are MFC instructors going to be put under the PAL pilot group?

“We are excited to be adding this team to PAL Aerospace as we continue to open new markets and grow our capabilities.”

[tps8903]

From Q1 2018 release:

The acquisition of CANLink Global Inc. ("Moncton Flight College") supports the long-term growth and operational requirements of our airline and aerospace portfolio by providing us with a unique ability to address pilot recruitment and retention.