First Air's C130 Hercules cargo plane prepares to take off from Yellowknife on April 21. It would be the last Hercules flight operated by First Air before the sale of the plane to Lynden Air Cargo. The two companies recently signed a new strategic agreement for Hercules services. - Photo courtesy First Air

NORTHWEST TERRITORIES
A move by the American owner of Hercules aircraft formerly based at First Air's Yellowknife hangar is being calling a threat to Northern airlines.

First Air president and CEO Brock Friesen shakes hands with Lynden Air Cargo president and CEO Rick Zerkel in Yellowknife April 21 after signing a strategic agreement for C130 Hercules transport services. The U.S. company Lynden has recently applied for a ministerial exemption to operate a Hercules aircraft at 22 mine sites and communities in the NWT and Nunavut. - Karen K. Ho/NNSL photo

U.S.-based Lynden Air Cargo and First Air have jointly applied for a ministerial exemption from Transport Canada to operate in Canada using American crews to carry cargo loads which require the capacity of a Hercules aircraft, and for smaller cargo loads as well.

David Morgan, Nolinor Aviation's director of charter operations, called it upsetting to see the application by Lynden and First Air come through within months of the Hercules aircraft leaving Yellowknife.

"An American-owned airplane (taking) away jobs from local people," is how the former manager of heavy airlift and charter sales at First Air sees it.

In April, Lynden acquired the last Canadian-owned Hercules aircraft from First Air during a combination sale and signing of a strategic agreement for cargo services going forward.

And on May 1, aviation lawyer William F. Clark, on behalf of Lynden and First Air, applied to Transport Canada for an exemption from section 55 of the Canada Transportation Act and a specific section of the Canadian Aviation Regulations.

Specifically, the application would be for delivery orders primarily at Dominion Diamond's Ekati mine, Rio Tinto's Diavik mine, De Beers' Snap Lake and Gahcho Kue mines. The applications also list routes from Yellowknife to the destinations of Hay River, Thompson, Man., the Meadowbank gold mine, the Lupin mine, Resolute Bay, Baker Lake, Cambridge Bay and Hall Beach.

While acknowledging its status as a foreign carrier, Lynden points to the fact that currently no Canadian carrier owns Hercules aircraft or comparable cargo planes.

Morgan said that Nolinor pursued purchasing the Hercules airplanes, including contacting First Air directly. However, he alleges that First Air declared that their Hercules would not be sold to any Canadian company and that was a decision made by the board.

"We've been pursuing the purchase of a Hercules for three years now," he said, "It was a setback, but we definitely didn't expect to see First Air and Lynden working together so shortly after this deal."

Morgan said the major problem with Lynden's application is their request for the ability to haul any kind of cargo, not just oversized or overweight loads that would only fit on a Hercules aircraft.

He estimated that aircraft currently owned by companies like Summit Air, Buffalo Airways or Nolinor, such as Electras, Boeing 737s, Dash 7s, Dash 8s and DC3s, could transport 90 per cent of what Lynden would be hauling.

The former First Air employee acknowledged there are situations with a legitimate need for a Hercules aircraft, especially emergencies like the recent Pangnirtung generator failure.

"This is different than the exemptions they've received in the past," Morgan said.

Lynden's president, Rick Zerkel, acknowledged "there might be a little bit of fear" among some of the other airline companies that its application could open up a crack in the country's regulations that could be taken advantaged of. However, he stressed that his company's request for the ability to transport other types of cargo would be for a restricted and short amount of time. "It makes it economically viable to utilize the Herc for their needs," he said.

Zerkel said there's no guarantee Lynden will get that, but stressed it was based solely on the economics of the situation on the mines. "If (Transport Canada) determines we can't do that then we will abide by that determination," he said.

The president and chief executive officer of the Air Transport Association of Canada, John McKenna, confirmed Transport Canada asked his organization to distribute Lynden's application to its members for comments, which could be submitted by June 3, but stressed it is part of a general consultation process. McKenna said he could not comment directly on the application itself, citing the fact that First Air is currently a member of the national transport association and other airlines who plan on responding are also members. "We're not going to be caught taking sides."

McKenna also said the reactions received by Transport Canada will likely only be negative ones. "I suspect there will a few reactions," he said with a laugh. "Those reactions will go directly to Transport Canada."

One of those will be from Canadian North. Spokesperson Kelly Lewis confirmed the company had registered its dissent with Transport Canada regarding Lynden's application and expects other airlines will as well.

"If it's approved it will take away work from other carriers and compromise the sustainability of the Canadian airline industry," Lewis said, who also called the terms in Lynden's application very broad in regard to the types of loads it would be allowed to transport.

Lewis also said it is a falsehood that airline companies serving the Northern territories have insufficient aircraft, and the Hercules is not a market necessity aside from special one-off situations.

In an e-mail, Transport Canada spokesperson Sau Sau Liu confirmed the department had received a request for an exemption to Canadian aviation regulations from Lynden Air Cargo to provide services within Canada, working under contract on behalf of First Air.

However, she said that the views submitted by individual companies and organizations are in confidence and that "it would be inappropriate to comment on the specifics of these."

Liu also said it would be premature to provide a specific date for a decision.

However, if the application is accepted and granted by Transport Canada, Morgan said there would only be negative effects on the country's airline industry, including the possibility of First Air itself losing cargo business contracts.

"At the end of the day, there's less Canadian-registered airplanes flying if a Hercules that can haul 48,000 pounds of cargo is in town making trips to the mines or Cambridge Bay or Resolute as suggested in the application," he said. "It could be anybody's airplane that is losing out on that work."

Zerkel strongly disagreed. "The economics of that argument are not correct," he said, pointing to many previous similar operations by Lynden done in the past, some of which were for longer periods of time.

"To my knowledge, not a single operator in the Yellowknife area ever objected and not a single operator went out of business," Zerkel said.

The Lynden executive acknowledged that it is still up to Transport Canada's decision and the company will abide by whatever decision is rendered.

"We're going to be here regardless of whether we're allowed to do these short-term operations or not," Zerkel said. "We will always be here to serve the emergency needs that will inevitably come up in the country of Canada that will require this type of lift."

First Air's vice-president of commercial services, Bert van der Stege, declined to comment for this story.

Buffalo Airways' president, Joe McBryan, and Air Tindi's president, Alasdair Martin, both declined to comment for this story. Calls to Summit Air and Calm Air were not returned.

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