James Risdon
Northern News Services

Yellowknife (Dec 08/99) - Aircraft charter companies in Yellowknife are cutting back and redeploying their fleets to other areas as the sharp drop of investment in mining exploration takes its toll.

In April 1999, Air Tindi returned a leased Dash 7, which could seat 50 people or handle 10,000 pounds of freight, at the end of a three-year agreement. Bob Schnurr, Air Tindi's manager of marketing and sales, said the Dash 7 could do the work of three of the company's smaller aircraft and represented roughly 15 per cent of its capacity.

"It wasn't busy enough for us to keep it," Schnurr said. "It's a big airplane and you have to fly it a lot to get maximum utilization."

Air Tindi is also reducing the size of its fleet during the slow winter season this year by sending a Twin Otter, which can carry 19 people or handle 3,300 pounds of freight, to an airline on the island of St. Martin, one of the Leeward Islands in the Caribbean.

Under the terms of this Air Tindi-Win Air deal, the Yk company provides the plane, two pilots and an engineer for five months. Since Air Tindi is a private company, it does not disclose financial information, but Schnurr described this deal which will soak up another five per cent of the company's seating capacity as "profitable." Air Tindi, which has six Twin Otters, would also consider leasing another one out, Schnurr said.

"Things have slowed right down so we did two things," he said. "We got rid of this airplane and we're looking for work elsewhere. It's not normal for us to send a plane to the Caribbean."

The slowdown that's hit Air Tindi is due to a dramatic drop in mining exploration here. In the past four years, investment in mining exploration in the territories has fallen by 55.6 per cent, from a high of $194.5 million in 1996 to an projected $86.3 million this year. Air Tindi's revenues fell about 25 per cent in the same period.

Air Tindi and other charter aircraft companies are looking for new markets to pick up the slack. Last month, Air Tindi responded to the change in the local market by buying a King Air 200, an 11-seater executive plane geared to the relatively stable government sector. And Yellowknife-based Great Slave Helicopters has redeployed its fleet somewhat to deal with the current slowdown in the market.

Adam Bembridge, president of Great Slave Helicopters, recently confirmed that the company has bought Hudson Bay Helicopters which was based in Churchill, Man., and had a presence in Iqaluit. Hudson Bay Helicopters' assets included a hangar and a couple of helicopters.

"We're increasing our exposure and footprint for the 37 aircraft we operate," Bembridge said.

Bigger players in this market are more protected against a drop in mining exploration dollars because they offer regular scheduled flights and cater more to the resident population. It's clear, however, that even First Air -- the biggest carrier in the North -- is feeling the pinch.

"Everybody's got to go into Yellowknife or Iqaluit so we'll see a drop on the passenger side (when mining exploration falls off)," Michael Olson, First Air's western region sales director, said. First Air was among those airline companies looking at a deal with Win Air and is still keeping an eye out for similar leasing arrangements.

"When it's not too busy up here, we'll look for work for our Twin Otters because they're not included in our scheduled flights," he said.

Many people in the charter aircraft industry are hoping mining exploration will pick up soon.

Malcolm McLean, vice president of Yellowknife-based Discovery Mining Services, predicts "within the next year or two, (mining exploration activity will) spring back up."

Government geologist Joe Heimbach, said it's likely mining exploration activity will level off where it is now. He doesn't expect another boom unless a new commodity is discovered, commodity prices rise considerably, or a new technique for mining exploration is developed.

"The biggest problem isn't the lack of minerals. It's the lack of investment," he said.