In June, Airbus demonstrated its C295W transport plane to Northern Ontario based First Nation owned Wasaya Airways (“it is bright” in oji-cree), which comes just as the airline gets creditors approval for its $C 35 million debt restructuring plan, giving just 10% of unsecured debt value to its long list of creditors.
The airline has 26 year history, and rocky one at that, with former President Tom Morris struggling with various issues after buying the northern Ontario routes from Bearskin Airlines in 2013, from poor service, debts, buying a DHC-8 which did not work out, HS 748 aircraft burning on the ground to problems with Transport Canada and executives stealing money, etc., just a “gong show” for several years by all accounts.
Today the airline is run by industry veteran President/CEO Michael Rodyniuk who has been busy turning around and fixing the troubled airline for the past 2 years. The airline has 24 aircraft (3 x HS748’s, 8 x Beech 1900D’s, 5 x C208B and 8 x PC-12’s), serving 26 northern Ontario destinations home to the 12 First Nations that own 100% of the airline.
The BAe/HS (Hawker Siddley) 748 (PHOTO BELOW) was built between 1961 and 1988, and 380 were built, with only 15 at best in service today, of which 9 are in Canada (Air Creebec x 2, Air Inuit x 1, Air North x 3, Wasaya Airways x 3)
Just last week a new Board of Directors was approved, which surprising removes some of the First Nations Chiefs and bring in 8 new members, which includes industry veteran Stephen Smith (infamous ex-President CEO of WestJet, President of Air Toronto, Air Ontario and Air Canada executive and President of low cost airline ZIP which was to crush his former employer WestJet).
This is what the airline needs, a knowledgeable Board, which from my experience I have seen very often as small airlines generally have dis-functional and inept Boards with little business and airline experience.
A quick history diversion, as maybe not known to many, but Stephen Smith was chosen to succeed President/CEO and Founder (one of 3) of WestJet Airlines, Clive Beddoe in 1999, a fantastic opportunity for Stephen Smith, but which sadly resulted in a Stephen Smith leaving WestJet Airlines 18 months later in 2000 due to a clash of corporate culture with other executives, as Mr. Smith was too confrontational for what they were used to.
A slight historic diversion here, WestJet had its first flight on February 19, 1996 starting with just 3 x B737-200’s and was formed by 3 individuals, Clive Beddoe, Mark Hill and David Neeleman. It is worth noting that Mr. Neeleman, a Mormon and diagnosed with ADD, is one of the low cost airline industries “rock stars”. In 1984 he and June Morris started Morris Air in Salt Lake City, a B737-200 operator that grew rapidly and by 1993 it was bought by the US low cost leader, Southwest Airlines for $US 130 million, and netting Mr. Neeleman $25 million and a seat on the Board of Southwest Airlines, which did not last long and eventually found his way to Clive Beddoe and Mark Hill and WestJet Airlines.
Then, in 1999, Mr. Nelleman founded JetBlue Airways which today is a major player in the US airline industry, but more of a evolved hybrid airline than a LCC (low cost carrier), which is what WestJet is today as well. In 2008, Mr. Neeleman founded Azul Linhas Aereas Braileiras in Brazil, and today operates 152+ aircraft (ATR-72-600’s to A330-300’s) with 102 aircraft on order, and in 2015 attracted United Airlines to invest $100 million and HNA Group (China) to invest $450 million at a time the Brazilian economy and therefore the airline industry is in a “mess”, and through Gateway consortium buys majority in TAP Air Portugal in 2015 as well.
Now, back to WestJet, where after Stephen Smith’s departure Clive Beddoe returned to his position at WestJet as President/CEO where he would stay until 2007, after the Air Canada lawsuit with Air Canada was settled, where WestJet was alleged to have used the password of a former Air Canada executive to access the Air Canada webpage to download lots of detailed commercial material. In the end, Westjet apologized to Air Canada and paid $15.5 million to settle the corporate espionage case.
Stephen Smith re-emerged in September 2002 as President of Air Canada’s new low cost airline ZIP, and was hand picked by President/CEO Robert Milton to stop the advancement of WestJet. ZIP was to wage war on Westjet but even with 12 brightly colored 118 passenger B737-200’s (same aircraft as WestJet), ZIP could not unseat WestJet and on September, 2004 ZIP was shut down after only 24 months of operation (see Photos below).
Now, what caught my eye is that Wasaya Airways now wants to become the 1st global customer for the $US28+/- million Airbus C295W (C295 with upgraded engines and winglets) military transport plane, and looking to buy 2 + 3 later, for $C 140 million ? when much cheaper options are available. For a company that just got out of bankruptcy proceedings it is a bold and questionable move, buying the C295W (Photos below) when no one else has. The aircraft is a military aircraft though it received its civil certification in July, 2012 and 4 years later no buyer till now, maybe. One has to think about support, resale values and really the price as well, and I don’t get it.
Yes, it has the rear loading ramp which is always useful for cargo transportation, but note the starboard side passenger door, something uncommon on civilian aircraft.
The aircraft is also competing for the Canadian FWSAR (fixed wing search and rescue) contract to replace the DHC-5 Buffalo, with Embraer KC-390 and LM/Alenia C-27 Spartan in competition.
The C295 is not a great commercial success, as of a year ago only 165 have been sold since 1998 (average 9.2 sales per year), not busy assembly line is it ? when Boeing builds 48+ B737’s per month, can’t be economical at a production rate of what 0.8 per month ? that is even lower than the B747-8 and A380.
The P&W 127G powered 2,645 shp engine (same as ATR-72-600), the C295W can carry 70 troops in side facing seats or 51 passengers in airline seats and has a cruise speed of 260 kts (311 kts maximum) and a takeoff run of 2,200 feet, which is needed for the 3,300 foot long northern Ontario runways and can carry up to 20,000 lbs of freight.
Apparently, the aircraft can bring in a lot of goods into the northern communities “really cheaply”, but at roughly $US 250,000 a month lease or finance, I do not see this airplane being “cheap” to operate, and with possibly 5, not sure where $US +/-15 million per year in aircraft finance/leasing is coming from ?
Yes, Wasaya Airways needs to replace its 3 old HS 748’s, once the work horse of Northern Canada at First Air and still at Air North, but First Air moved to ATR-42/72’s and this spring Air North brought in its first ATR-42-300 to replace its 5 HS 748’s in time.
An ATR-42/72 freighter (Photo below) can run you anywhere between $US 4.0 to $US 9.0 million on the used market, and surely a “cheaper option” with the ATR-72 able to carry up to 19,000 lbs in its 2,666 ft3 cabin.
As a veteran of working with many airlines around the world, I always question when someone tries to be too “different”, and this stands out like a sore thumb. To be the FIRST civilian operatorof an expensive turboprop has many issues, from support to resale values, one only has to look at Summit Air and its 2 x DHC-5E Buffalo’s the world’s only civilian certified Buffalo’s. Now here is a great aircraft, only 122 built between 1965 and 1986, the DHC-5 can carry 41 troops or 18,000 lbs of freight, and able to clear 50 feet on takeoff in 1,210 feet and land over 50 feet obstacle in 980 feet.
Powered by two GE-CT64-820-4 engines producing 3,133 shp, the DHC-5 has a max cruise of 252 kts, a stall speed of only 67 kts, and current type certificate holder, Viking Air wanted to bring the aircraft back into production for the Canadian FWSAR (fixed wing search and rescue) tender as the DHC-5NG (with PW150 engines, glass cockpit, enhanced vision and night goggles, etc.), and would have competed against the C295W if Viking Air had chosen to proceed with the program.
When becoming the first customer of an aircraft that has been available for 4 years with NO buyer, one needs to ask why is no one else buying ? I do not think Wasaya Airways requirement to serve remote communities with short unimproved runways with lots of cargo is that unique, one sees it all over the world, and I have worked in over 25 countries, many in Africa where such operations are the norm.
With First Nations complaining of insufficient funds for their communities in Canada, it seems outrageous that they would even think about spending $US 28 million per aircraft to fly freight and passengers when the airline was near bankruptcy with $C 35 million in debt just a month ago, and now when it gets out of bankruptcy is is risking putting it back into possible financial stress again. A small airline like Wasaya Airways should never be the launch customer for any large aircraft programs, and the C295W is a large aircraft by even regional airline standards.
It was only last year that Canada’s First Air sold its 2 x L-100-30 civilian Hercules (the last in Canada) to Lynden Air Cargo (USA), such aircraft probably were priced somewhere in the $US +/- 6 million range each and carried 40,000 lbs of freight. Now First Air has no large dedicated out-sized freighter, which in my opinion goes against what its mission is to support the people of the eastern Artic region.
But then, maybe cargo is not so important these days ? Summit Air sent one of its DHC-5’s to Southern Sudan on Red cross work last year, while it bought an old ATR-72-200 for freight work for about $US 2.5 million (plus cargo conversion), would that not be a cheaper option for Wasaya Airways ? instead of $28 million for one Airbus C295W ?
Its not like the regional turboprop cargo market is very big, as of 2015, there were only 43 ATR-42 freighters, 50 x ATR-72 freighters, 35 x BAe ATP freighters, 38 x Saab 340 freighters, 13 x Fokker F50 freighters and 3 x Q400 freighters, at most 182 aircraft, and Bombardier has a new cargo conversion program for the DHC-8-300, starting with Air Inuit.
Sometimes I find airline executives get too caught up with buying new aircraft when they really should be looking at good second hand equipment, other than Porter Airlines, and recently First Air, no Canadian regional airlines buy new aircraft, for a reason. Even Air North’s recent “new” ATR-42-300 is an old model from First Air as it upgrades to real new ATR-42-600’s, but also wanted a big $42 million loan from the Federal government to fund the acquisition ?
Meanwhile Canada operates some of the oldest B737-200’s in the world, in fact 16, mostly Cargo or Quick Change as the Series 200 is the only B737 able to operate in and out of gravel and unimproved airstrips, BUT how long can we keep flying 40+ year old B737-200’s when there is NO replacement insight ?
Is this the thinking behind the Airbus C295W ? if so, then maybe its worth looking at the new LM100J Hercules at $60 million ? currently only 34 commercial L-100-20/30 Hercules are in service out of 115 built between 1964-1992, and now there are 20 orders for the new Lockheed Martin L100J (really model L-382J), with 10 for ASL Aviation for Safair (South Africa) and recently 10 for Bravo Industries LLC (Brazil), time for some Canadian operator to order 1-2 no ?
I have said my peace, hope you learned something, till next time so long and keep those “good” comments coming, thank you for reading my blog, cheers.