Winnipeg Free Press

Winnipeg Free Press (Newspaper) - August 8, 2024, Winnipeg, Manitoba B5 THURSDAY AUGUST 8, 2024 ● BUSINESS@FREEPRESS.MB.CA ● WINNIPEGFREEPRESS.COM BUSINESS Probe Research founder MacKay, Show and Tell co-CEO George pass torch for respective businesses Winnipeg careers, success in parallel S COTT MacKay and Peter George both grew up, as MacKay would say, on the mean streets of River Heights. A year apart in age (George is 62, MacKay 61), they negotiated their way into business ownership in the ear- ly 1990s and then leadership in their respective industries — MacKay as founder and CEO of Probe Research; George as co-founder of Taylor-George then, after merging with McKim in the mid 2000s, the head of that advertising/ marketing firm (which changed its name to Show and Tell Agency last year). They ended up doing business togeth- er through the entirety of their careers, with Probe doing market research for George and his clients. They became business friends, then social friends and ended up with summer places near each other. Then they negotiated the sales of their respective businesses — both to long time colleagues/partners — earli- er this summer, closing the deals just days apart. They even used the same lawyer. “We both went to Kelvin (High School), we both knew the same people,” said George. “It’s one of those weird kind of Winnipeg/River Heights coincidental things.” You could also say their career tra- jectories were also a weird kind of Win- nipeg thing. MacKay only had one job after he finished university and before founding Probe Research: at the old Angus Reid Group, a national polling firm based in Winnipeg at the time. MacKay was the one who took calls from local would-be customers who had to be turned down because of Angus Reid’s focus on national clients. “I had an idea there might be a busi- ness to service those local organiza- tions who were looking for quality mar- ket research,” he said. George started his career with one desire: to be a freelance graphic de- signer. He credits the dedication of industry professionals and the decency of the Winnipeg business community for his longevity and the good luck to have a partner to buy him out at the end. “You don’t get rich being a graphic designer working in advertising. You really have to cash out. You have to sell.” To his good fortune, MacKay realized not long after starting Probe that he really liked the business side as much as the social science side. “I liked the idea of trying to steadily grow a business, employing a few more people, all the personalities involved and the challenges,” he said. “I didn’t know I had that in me.” MacKay sold his business to Probe principals Mary Agnes Welch and Curtis Brown. George sold his to Marty Fisher, for- mer head of Sherpa Marketing, a digit- al marketing agency that merged with McKim in 2021. (George had merged his former firm with McKim Cringan in 2006.) Their career stories are also dis- tinctive Winnipeg stories in that, not unlike the rest of the world, technology reshaped their industries. However, unlike many of their peers elsewhere, the two were able to forge ahead, retain the skilled characters they needed and keep their companies intact. “Winnipeg is really a great place to build a business,” said George. “I could not have built a business like this in a place like Toronto. There’s just way too many competitors … Winnipeg is a little bit of an insular community, which is helpful to get a business to sale up in the early days.” The original idea for starting Probe was to provide the kind of market re- search to local clients that had previ- ously only been available to national players. Probe has always had competition in Manitoba, such as Prairie Research Associates and Leger (which grew out of Western Opinion Research). But it’s not like there was blood spilled in the process of bidding for work. “One of us wins. We shake hands and move on,” MacKay said. “Maybe we get it the next time.” Probe once owned 50 per cent of a call centre, but the rise of cellphones and online surveying forced MacKay to exit that business a decade ago. George’s tools at his first job was a drawing table, some markers and an X-Acto blade. The digital world changed the tools completely — wiping out some suppli- ers along the way — but the need for both market research and branding and marketing services has likely grown. “The demand has been very con- stant,” said MacKay. Organizations, product manufactur- ers, political parties, etc., will always want to gather primary information about how people feel about something. “But the way you go about acquiring accurate reflections of this information has changed profoundly,” he said. Both men said they’re retiring be- cause of opportunity — they had busi- ness partners who wanted to buy. Neither were burned out or tired of business challenges that had become too prickly. “It’s not that I am exhausted or any- thing,” said MacKay. “I had a good run. The company is going to have a good fu- ture. I’m really happy about the whole thing.” While George expressed a “sense of ease” knowing he’ll not have to have to face the “seismic changes that are coming” with the rise of artificial intel- ligence tools, he also said it is an amaz- ing opportunity for the industry. That such good fortune would befall two guys whose careers ran in parallel might make them think this is the way it happens for everyone. martin.cash@freepress.mb.ca MARTIN CASH NIC ADAM / FREE PRESS Scott MacKay (right), founder and former CEO of Probe Research, and Peter George, former co-CEO of Show and Tell Agency. ‘We both went to Kelvin (High School), we both knew the same people. It’s one of those weird kind of Winnipeg/River Heights coincidental things,’ George says of the decades-long intersection of the two men’s business careers. Both recently retired from their respective firms. Paris Olympics puts dent in Air Canada sales as travellers avoid France MONTREAL — Air Canada may be the official carrier of Team Canada, but that didn’t stop the 2024 Paris Olympics from hobbling its summer sales. Despite Canadians’ continued thirst for Mediterranean getaways, the air- line’s transatlantic ticket proceeds suffered in its latest quarter as travel- lers from France and Germany opted to stay on the Continent to soak up the Olympic Games as well as Euro 2024. “Core Europe, markets like France, Germany, where there’s a significant point-of-sale Europe component, that was quite weak,” said Mark Galardo, Air Canada’s head of revenue and net- work planning. “The Olympics and a bit of the Euro soccer tournament all contributed to some of those declines.” The distracting athletics along with a glut of Atlantic flights from competi- tors helped prompt Air Canada to cut its capacity for trips across the pond, Galardo said. While the Olympics are typically a tourism boon, many vacationers opted to steer clear of the City of Light, with parts of central Paris closed off for the duration of the games. “A number of travellers have decid- ed to try to avoid France during the Olympics,” said analyst Chris Murray of ATB Capital Markets. The weaker demand contributed to Air Canada’s 51 per cent year-over- year dive in profit last quarter — even while revenues rose. “Our second-quarter results were solid, although they did not achieve our internal expectations,” CEO Michael Rousseau told analysts on a conference call Wednesday. Higher capacity and strong demand for international flights drove year- over-year revenue growth of two per cent to $5.52 billion in the quarter end- ed June 30. But revenue-per-seat fig- ures dropped compared with the year before, when soaring post-pandemic demand and lower capacity across the industry made for fuller planes, higher fares and wider profit margins. As a result, net income in Air Can- ada’s second quarter fell to $410 million from $838 million a year earlier. Operating expenses that stood nine per cent above last year’s also helped account for the plunge, as the cost of jet fuel and labour rose, chief financial of- ficer John Di Bert said. Despite ongoing growth, Air Can- ada’s post-COVID rebound remains incomplete four and a half years after borders closed and lockdowns began. “We’re still not back to 2019 levels in terms of scale and the size of the air- line,” Di Bert said. Air Canada’s adjusted earnings notched slightly lower last quarter than in the same period five years earlier. The size of the carrier’s fleet is also smaller with 356 planes as of June 30, compared with 400 in the second quarter of 2019, although many of the scrapped aircraft were smaller, older and less efficient. Air Canada shares slid 1.39 per cent to close at $14.93 on Wednesday, a clos- ing price not seen since October 2020 — aside from Aug. 2 — to cap off a 19 per cent decrease since the start of the year. “Like our shareholders, we’re disappointed with our stock price per- formance here … especially coming off our record 2023 and having complete- ly repaired the balance sheet. We also know that most global airline stocks are having similar challenges,” Rousseau said. Earlier this year, executives said cor- porate travel, which is more lucrative for airlines than leisure traffic, would help fuel profits in 2024, even as pan- demic habits of video conferencing and remote work proved tough to shake. As rivals flocked to transatlantic routes, Air Canada dialled down its ser- vice there and ramped up Pacific flight volumes by a third. Two new routes — Toronto to Seoul, South Korea, and Montreal to Osaka, Japan — did “ex- ceedingly well,” Galardo said. On an adjusted basis, the Mont- real-based company earned 98 cents per diluted share, down from an ad- justed profit of $1.85 per diluted share in the same quarter a year ago. The re- sult beat analysts’ recent expectations of 92 cents per diluted share. But it also came after Air Canada lowered its 2024 financial forecast in late July, saying its planes have not been as full as anticipated due in part to tough competition in international markets. The airline said it plans to increase its flight capacity in the third quarter by more than four per cent compared with the same quarter in 2023. — The Canadian Press CHRISTOPHER REYNOLDS CHRISTOPHER KATSAROV / THE CANADIAN PRESS FILES Air Canada announced Wednesday its Q2 net income fell to $410 million from $838 million a year earlier. The airline says it plans to increase flight capacity in its third quarter. Hail damage grounds 10% of WestJet fleet CALGARY — WestJet says 16 of its planes have been grounded after a massive hail- storm hit Calgary earlier this week. The Calgary-based airline says those aircraft — 10 per cent of its fleet — need substantial repairs and inspections before they can fly again. The carrier also says 84 of its flights were cancelled Wednesday, with 106 cancelled Tuesday and 58 on Monday. The Calgary International Airport was pummelled by hail Monday evening, forcing parts of its domestic terminal to close for repairs for an undetermined time. A spokeswoman for Air Canada says its Calgary operations have returned to normal. — The Canadian Press ;