Jeff LeeHello and welcome to this episode of cargo facts connect, the podcast of cargo facts, the newsletter of record for the air cargo and freighter aircraft industries for over 40 years. I’m Jeff Lee, editor of cargo facts and it’s Friday, the thirteenth of September. This week, we head to Canada to hear from regional carrier Pascan Aviation, which recently leased its first Saab 340B freighter and will very soon be flying it on its own AOC as the first Canadian operator of the type. I talked to president and chief executive Julian Roberts to find out more.
Jeff LeeJulian, very nice to meet you and looking forward to hearing more on pascan aviation. You recently entered the dedicated cargo market. Perhaps just, umm, tell us a bit about this, the rationale and the thinking behind that, this entry into the into the freighter segment.
Julian RobertsYeah. Well, it’s a it’s kind of natural for pascan that we’ve been operating since 1999. The company was started with a fleet of Pilatus PC Twelves, and originally those PC twelves were used a lot for moving on time freight. More specifically, the banking materials of the past. That’s pretty much gone away. It’s all digitalized now, but you know, we were moving at bankers notes, checks, documents for years and years, and we actually use that to build our regional airline. So we were always flying cargo in the tail of the plane and basically the passengers became the icing on the cake. But as we grew our past year business, it kind of transitioned more into the passengers became more important for our operation and the Cargo kind of became the icing on the cake in the back of the plane.
Jeff LeeRight.
Julian RobertsSo we’ve grown our fleet size over the year. We’ve went from PC twelves to King airs to the British airspace J30 twos, which we had all modified as COMBI aircraft. So instead of operating them in a 19 seat configuration, we operated them in a 14 seat configuration with added cargo space. So you know, cargo has always been a part of our DNA and it always will be, I guess when the banking system changed and we started to lose a big piece of those contracts, we kind of did scale back our cargo operation a bit and really just concentrated on the medical supplies, medication moving things around for a hospitals. We move radioactive isotopes for cancer treatments. Between the labs that to specific airports in eastern Canada so that we’ve been doing that cargo has been a part of our business since the 1999. Actually, it’s a very simple story how we decide to get to the Saab 340 full cargo aircraft. We did a fleet changeover that started right in the middle of the pandemic and the 2020 we took on our first the Saab 340 passenger aircraft. We operate 8 passenger aircraft today and last winter we had a request for quote come by that was from a major cargo company. Uhm and we started to look at this how we could possibly do it with our J30 twos, uh, and that was really the initial request from the company. As you know, looking for a 19 seat aircraft to move their freight. But after we started digging into this on our side, we realized that if we had just, you know, transform one of our passenger aircraft and one of our sobs into a cargo a platform, we basically be able to fly one aircraft on the roofs that were currently using that two smaller aircraft and the, I guess the contracting company, they really liked that idea, asked us to to look into it a little bit more. And as we have a pretty strong portfolio with the leasing company that has most of these cargo sobs, uh said. Well, that would be a pretty easy end to start. You know, just operating a full freighter. So I guess we started the process in April and in on July 8th, we did our first cargo flight with the Saab 340 full cargo and now we’re operating one under an American AOC. We’re waiting until the STC is approved here by our authorities at Transport Canada. We expect that will be done within the coming month or two where we will import the aircraft onto our certificate and start operating it as a Canadian aircraft. And since we’ve done that, you know, I think it’s open. Some eyes we’ve been getting calls from other companies moving different kinds of freight. I think there may be a little bit of a niche there coming up that we didn’t really expect before we looked at it as kind of a one off contract opportunity. But now it’s kind of growing into something else. So we already have a second Saab lined up, a full freighter that we’ll hopefully take a position of early in the new year.
Jeff LeeSo it’s interesting that these these market changes and opportunities led to this and obviously moved pretty quickly to to pivot to take advantage of that. So Speaking of the market in Canada generally, umm, what kind of changes have you seen as far as the demand for kind of these smaller regional turboprop freighters in, in your region specifically?
Julian RobertsWell, you know, I I’m just gonna say the way I see it, you know, this may not be the exact way it is and maybe some other companies will have a, you know, a different look on it. But the regulations in Canada change the last year for the flight and duty requirements, so the same regulations came into effect for the smaller 703 and 704 operators that are operating smaller aircraft that like we were before. So you know it put a lot of pressure on these smaller companies operating a 1900 freighters that, you know, the caravans, things like that. So the flight and duty time really became a bit of a challenge. So you know something that you were doing basically, you know, in December of 2023, the 1st of January 2024 that came became a bit of a challenge. So I think a lot of these smaller operators are struggling with that right now since we’ve been into 705 for a bit. You know, we’ve kind of had the structure in place to be able to, you know, work a little more at ease with that. It’s not such a surprise for us. And if you look at the amount of cargo that you’re flying around, let’s just say you have a company flying two 1900 side by side. You know, on some similar routes and you know a company to look at today will you know with the same amount of crew we can move twice as much volume. Uh, you know, I think it’s making this the platform now become a little more interesting for some of the freight forwarders out there. So the the big changes I do see that are having an impact on smaller operators. That is definitely the new regulations on flight and duty, and you know that’s not going away. It’s it seems like it’s gonna be here to stay. So I’m hoping to be able to take advantage of that. You know I have access right now to four or five freighters if I need it. We have a great relationship with our lessor Jetstream aviation capital. We’ve been working together since 2019. Like I said, we already have 9 platforms through them and they are offering us more. So really, now I just gotta get out there and, you know, see what the true potential is. Like who’s gonna need this aircraft type and you know, just how many of these aircraft will put in service in the next year or two.
Jeff LeeAnd and that will certainly change the, UM, the the nature of your of your fleet overall, how large do you envision? I mean obviously, depending on the demand. But, umm, how large do you see your freighter component becoming, you know, in relation to the overall fleet?
Julian RobertsWell, that’s a hard question, right? Like I’m just starting this out today and then like I said, it was based on one contract, you know, but just the interest that you know, we’ve seem to have generated in a very, very short period of time, it’s kind of leading me to believe that there’s something there and you know something that has maybe been underlooked in the past ohm, you know, right now, I know that I’m going for a second aircraft already.
Jeff LeeYeah.
Julian RobertsA lot of that is due to the fact that I need a backup airplane when the first one goes for C check, or if we have any kind of a, you know, maintenance related issues. So they have a backup is important, but since then there’s been a lot of people knocking at the door asking, you know, about different products, how we can move it back and forth a lot that’s revolving around seafood. Right now, they feel that the aircraft, the ability, the range, the amount of weight that we can fly, that seems to be a good fit for a lot of people. I know there are some nice contracts that I’d like to go after. I have some very, very preliminary discussions with us, some companies, but I I I’m really thinking that maybe even between now and the next summer, I may even have a third one operating here. So obviously I’m hoping to have two they’ll be flying daily and then one is kind of a backup aircraft backup airplanes. You know what we do with those, right? We fly them as much as we can too. So though you know short term, I say in a year maybe I’ll have the 8 commuter aircraft, two to three cargo aircraft and really just you know from there see see what’s behind this whole cargo market.
Jeff LeeRight, it’s interesting, isn’t it, because I guess it’s the nature of Canada as a country that and that it’s the specific nuances that that has led to a lot of interesting movements and developments that we’ve observed in the cargo market.
Julian RobertsSo I guess you know, uh, Canada, you can understand it’s a very, very vast territory.
Jeff LeeYeah.
Julian RobertsThe distances are far, you know, and the access between a lot of the areas are, you know, fairly difficult depending on which province you live in.
Jeff LeeYeah.
Julian RobertsThe geography is in some places it’s very tough. So a lot of the places that we’re dealing with right now are places that aren’t necessarily as easily accessible by roads or the clients that really need to get their freight very quickly from point A to point B ohm. If you look at the bigger Airlines, everybody kind of decided that they’re getting 730 sevens during the pandemic and now it seems like there are more aircraft out there than the risk cargo and this is something that we seem to go through, you know, every time there’s a change in aviation and somebody does something, everybody thinks they can make it work. So it’s rarely the case, and now we’re starting to see a lot of these bigger aircraft starting to slow down a bit. And I do believe it’s gonna open the market for some of the smaller airplanes up again, kind of like history repeating itself over and over ohm. But for some of the places that we serve, we serve a an area that’s called these Italia Madeline. It’s a small island, you know off of the coast. I guess for you know, a place like that where basically the highway for them, right, so you can’t get anything in reasonably quick by the land. So air is the next thing. So we really become, I guess, a bit of a lifeline for communities like that. And if you look towards the north of Quebec, where some of the other companies like Air, Inuit, Nolan or operate, you know they’re bringing cargo into some very, very remote areas that really they just aren’t accessible. So that you know, it really depends on the size of the company and the mission. But Canada is definitely a place where you need to have access to cargo and cargo aircraft. Yeah, I you know, there’s just a we could probably talk days about it.
Jeff LeeYeah, and I think you’re right, I mean the especially in many of these remote areas, UM, they have been and and many are still underserved. So there is probably a lot of opportunity there for these. These regional aircraft types to go in there and and really yeah, as you said be the highway for them but and obviously you have a very uniform fleet of Saab Three 40s right now. And I assuming that you will be staying in this kind of size segment, UM, are there any other regional cargo aircraft types that that might work for Pascal?
Julian RobertsWell, you know, in aviation, especially today, the cost of training, you know, retention, uh, the the shortage of pilots and mechanics like our objective right now is to really come down to 1 aircraft type. We wanna simplify the whole thing. We want all of our training to be the same, you know, not to have two different stores, inventory of parts for different aircraft types. You know, I went through that before we had PC12 King errors J, 32 Navajo and it was just, you know, it wasn’t. Uh, it was very difficult. It was a difficult operation, difficult for training, very costly to keep inventory in place. So our objective is to really streamline everything onto one platform and to simplify that as much as we can. And I think that’s where, you know, we’ll get an edge and enable us to become more profitable by focusing on one aircraft type for now. So even if there were some opportunities that came up and it would require me to change, let’s just say to an ATR 42 or something that but you know, I probably actually even turned that down the just because sometimes contracts don’t last long enough to offset what it’s going to cost you to get into a new aircraft type.
Jeff LeeRight.
Julian RobertsSo really, the next move that we make as a company is because we’re upgrading again to a different platform and that focus will remain on the new platform.
Jeff LeeYeah.
Julian RobertsAnd I’ll just do the same thing we did in the past. You know, like when it was all PC12, we face it the host, the J32. Now we’re facing at the J32 and for the Saab 30-40. After this 3:40, there are definitely things on the drawing board. Uh can’t really talk about that right now, but when we do make a transition, it’ll be probably the same kind of way, you know, make sure it’s streamlined, make sure that we have one aircraft type that serves all of our clientele and the markets that we serve and our future ambitions.
Jeff LeeRight. Yeah, you were just talking about pilot training earlier. How am how difficult is it to find pilots right now for for slabs in Canada?
Julian RobertsIt’s like trying to dig a splinter from an under your fingernail. That’s that’s pretty difficult. It’s pretty difficult, you know, it’s it’s this has been, you know, ongoing for some time for Pascal and fortunately, you know, we’re like the university for pilots, right? So if you can eventually get enough hours and come and fly at pascan, you’ve basically got a golden ticket to go right to the big league, right? So yeah, you do a couple years with us on our Saab, and then the next thing you’re flying Boeing or Airbus, that’s really it. So for us, we still maintain a pretty good ability to, you know, to recruit and hire pilots and train pilots. But it is definitely not the best I’ve seen. Like we, we do struggle. We’re running ground schools. You know, every two or three months right now, just to make sure that we can stay on top of the hiring a pilot, it’s really easy to get called by a big the big league. They’ll give us a two week notice if they’re really nice, they’ll give us a month notice. But you know, they’re gone. It takes me like the recruiting process alone and then training. Training is 3 months and the recruiting process could be another month. So you know to replace a pilot today it’s it’s difficult, there aren’t we don’t have you know 100 resumes of captains ready to go on our desk anymore. So but you have to get very creative and unfortunately you just can’t take on too much. You know, as we grow into things, we need to identify that we can actually do it in our current state and you know, not first hand that this is something we’re gonna be able to do possibly. So when we sign up or we make a move, we make sure we can, it’s something that we can actually do today and not pretend that we’ll make this work in three months. So that’s always a setup for failure so.
Jeff LeeSuper interesting and it’s nice to see the first saab 340 freighter operator in Canada. And with that said, I we’re looking forward to seeing your development and good luck with everything going forward. And you know certainly in the next few months.
Julian RobertsYeah, well, absolutely, you know, like I said, it’s a we’re we’re always trying to diversify our company. Cargo is something that seems to be new for us, but it’s been in our DNA since 1999, so we’re very familiar with the ends and outs. But as to having a fully dedicated cargo aircraft, this is our first but so far so good. We have a nice long term contract in place already. We’re working on other opportunities right now, so you know, we’ll see where it goes.
Jeff LeeThat was Julian Roberts, president and CEO of Pascan Aviation. And that’s all the time we have today. For more coverage of the freighter aircraft market, visit cargo facts.com. Thank you very much for tuning in, and join us again next time.
