Air Tour Acquisitions Expands Eagle Group Horizons

Las Vegas-based Eagle Group is in the second phase of an ambitious growth program that includes a new terminal and office tower for its Eagle Canyon Airlines air-tour operation, and further expansion of its FBO and airline services businesses at burgeoning McCarran International.

Since 1993, when Eagle Group bought an FBO at McCarran, its share of the general aviation market has grown from 10% to almost 50% of private and corporate traffic, according to Cliff Evarts, Eagle Group CEO. In late August, Eagle Canyon Airlines became the largest Grand Canyon air-tour operator with the acquisition of Scenic Airlines and its 18 de Havilland Twin Otter aircraft.

Investments in new facilities and acquisitions, not including Scenic, have totaled $35 million to date, Evarts said. They include construction of a $20 million, 50,000-square-foot executive terminal for the FBO, called Eagle Executive Air Terminal. Earlier this year the company purchased Air Nevada's Grand Canyon business.

Even more is planned. The new air tour terminal will give both Eagle's FBO and airline operations room to grow, according to Evarts. This will allow it to capitalize on additional opportunities in fueling, ground handling, maintenance and air charter at McCarran, he said. McCarran's torrid growth is forecast to continue. Las Vegas' main airport has seen passenger traffic double to more than 30 million departures annually over the past 10 years.

Eagle also has put top managers in place with the vision to see new business and doggedly pursue it, while keeping day-to-day operations at a high standard, Evarts said. These include Grant Murray as airline president. He has more than 20 years experience in the airline industry and has managed a chain of eight FBOs for Mercury Air Group. Bob Smith is the FBO's general manager and Liz Ambrogio is head of its customer service department.

While details of the air tour merger are being worked out, Eagle Canyon will operate a diverse fleet. The original airline flies five 44- to 48-passenger Fokker F-27 twin-turboprop transports and 20 Cessna C-402 and C-207 aircraft. The slow-flying F-27s' solid ride, high wings and large windows are well-suited to the sightseeing role, while the smaller Cessnas provide fill-in and a more intimate viewing experience, Murray said. Eagle has said it wants to sell the Cessnas as it integrates the two fleets.

Future growth potential for the air tour operation remains strong: of the 800,000 air visitors to the Grand Canyon each year, 60% originate from Las Vegas, he said. The purchase of Air Nevada's 40,000-passenger-a year business also opened new markets in Europe, Australia, New Zealand and South Africa. Previously, almost 80% of Eagle Canyon Airlines' business consisted of tourists from Asia, Murray said.

Scenic brings about 155,000 passengers a year to Eagle's air tour business. Scenic's 19-passenger Twin Otters have enlarged viewing windows and meet stringent FAA noise regulations set to go into effect after 2004 for the Canyon area.

Eagle Executive Air Terminal now handles between 20 and 50 large corporate aircraft a day. It expects to pump more than six million gallons of fuel this year. Total employment has grown to 30 line personnel, 10 customer service representatives and two full-time mechanics. There are seven avfuel trucks and ramp space for 200 aircraft. Two 15,000-square-foot and two 10,000-square-foot hangars each can accommodate a Gulfstream V-size business jet.

By Paul Proctor