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SOMBA K'E/YELLOWKNIFE - Discovery Air recently cut six Yellowknife positions at its three Northern subsidiaries partly in response to a decline in business with exploration companies doing work in the North this summer.

Discovery Air - owner of Air Tindi, Discovery Mining Services, Great Slave Helicopters and Top Aces - recently laid off six workers as the company's earnings this year have fallen behind last year's. - photo courtesy of Discovery Air

The company, owner of Great Slave Helicopters, Air Tindi and Discovery Mining Services and employer of 275 Northern workers, expects its revenue this year will be down from last year's, forcing the company to cut back on staff and spending, said interim president and chief executive officer David A. Jennings.

Those affected by the cuts were primarily support staff, including the executive assistant to the president of Great Slave Helicopters.

"As a corporation, because our revenue is down from last year, but still generally up from years ago, we are making standard, good business practice (decisions)," said Jennings.

"It's never easy to let anyone go. But the presidents of our subsidiaries have been through it before. These are companies that have been operating for 20 years and, beyond the seasonal cycles, they've seen cycles in all kinds of markets since they've been going."

The resource market accounts for 15 to 20 per cent of Discovery Air's annual revenue, according to Jennings.

"Last year was a particularly good year because it was just at the tip of the resource market being up," he said. "The portion of our business that deals with exploration companies ... was visibly weaker than it was in the summer of 2007."

The company is currently not planning further cutbacks, added Jennings.

"What I can say is that we're very confident in the other 80, 85 per cent of our business" – including government contracts and medevac services – "either staying as is or growing," he said.

"The rapid downturn in the world economy has us looking at other opportunities, be it different geographical areas in the North, not necessarily Yellowknife-specific, or maybe some other different uses for aircraft.

"Even if there is a status quo or further erosion, we're still cautiously optimistic that we can turn things around."

Jennings added that despite the recent layoffs, staff numbers at Discovery Air have risen considerably in the last several years.

Statistics from Natural Resources Canada on the amount of money spent annually in the NWT on land appraisals and exploration point to a substantial decline this year.

While the numbers do not account for the last three months of the year, the majority of exploration activity typically takes place during the summer.

As of the end of September, just under $129 million was spent in the NWT, down from just under $194 million by the end of last year.

Charlie Morgan, marketing and sales manager for Canadian Helicopters, said that while his company did not see much of a decline this summer in exploration contracts – which accounts for 30 per cent of the company's annual revenue – next year is not looking good.

"It's gonna be some tough times ahead by the looks of it," he said. "You just have to look at the stock markets. The junior companies can't raise much money."