'We've had to cut deeper'
Great Slave Helicopters announces layoffs, fleet reduction as resource sector continues to struggle
Meagan Leonard
Northern News Services
Monday, January 18, 2016
SOMBA K'E/YELLOWKNIFE
Yellowknife-based Great Slave Helicopters has initiated a series of "temporary" cuts to staff and equipment after its two main sources of revenue failed to make a comeback this year.
Company president Chris Bassett told News/North a continued slow-down in the resource sector, including mine closures and record-low oil prices, resulted in less business contracts and a decrease in flight volume more than twice what was projected.
"Over the last two years, those industries have been in a severe depression, they're at historic 10-year lows so their budgets are drying up and a lot of projects are getting canceled," he said. "We have a lot of capacity but not a lot of demand coupled to that ... it's really depressed our revenues and made it much harder for us to pay our bills."
The company operates a fleet of single and twin engine turbine helicopters whose services include mining exploration, forest fire suppression, oil, gas and seismic exploration, wildlife and geophysical surveying and construction maintenance.
Since the business generates 90 per cent of its revenue between May and October, staff are typically reduced in the winter, but this year that reduction was exacerbated says Bassett. Approximately half of its Yellowknife maintenance engineers are currently working three days per week instead of five. A number of aircraft were also sold, reducing the fleet by 17 per cent, and 16 administrative positions were axed indefinitely. There were also some layoffs for pilots.
"When we started looking at our financials, recognizing our flight volumes are down and we were going to have misses on our finances, we began cost cuts, taking out some capacity, selling some machines and returning aircraft that were on leases," he said. "We took out some general and administrative positions ... mid-year last year and then we took more out again last week."
Staff working in the field are still at 100 per cent capacity and Bassett expects those with reduced hours will be back to full-time by mid-April.
"It's temporary, all of them have call-back dates," he said.
Bassett said the company started scaling down in 2014, but ramped back up again last year anticipating market improvement. When conditions didn't change, they had to take more drastic action.
"It's not a comeback at all. It's gone the wrong way," he said.
Right now the company is doing some counter-season work to try an offset its costs including fire fighting initiatives in Chile and Australia, and heli-skiing - off-trail, downhill skiing or snowboarding accessed by a helicopter in places without recreational infrastructure. While the company does not intend to leave Yellowknife, it continues to search for new market opportunities elsewhere.
"We're not going to sit around idly and wait for these two end markets to recover, we're going to look for a replacement," he said, adding much of this work is being done out of their Calgary office. "People don't want to relocate to Yellowknife, it's very expensive to live there. Some of the support functions are hard to fill so we've moved them to Calgary."
Though he is witnessing peers in the industry have to make the same hard decisions, Bassett says he is optimistic business will turn around.
"We will bring back to 100 per cent those who are participating in this partial layoff," he said. "They will come back on board with us full time just as soon as the weather gets a little milder, the days get a little longer and our customers start calling us to come back."
