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Airline Management, Airline Mergers & Acquisitions, Airline Restructuring, Canadian Operators, Commercial Airliners, Regional Aircraft, Regional Airlines, UPDATES

UPDATE: Transwest Air is now a fully owned subsidiary of WestWind Aviation, now there is only 1 large regional airline in Saskatchewan, and 80% owned by 2 First Nations economic development corporations (EDC’s). These First Nations EDC’s now pretty much own ALL airlines in Canada’s north, usually through Aboriginal economic development corporations (EDC’s), with a few family and corporate hold outs in the Northwest Territories, especially at Yellowknife (Summit Air, Discovery Air-Air Tindi/Great Slave Helicopters, Buffalo Airways) and in Fort Smith Northwestern Air Lease Ltd. Is this a good thing or a bad thing where First Nations own all air services in Canada’s north ? Is this the only viable exit strategy available in the north or are there “pressures” to sell to local First Nations ? and Can the EDC’s create long term financially sustainable airlines ? First Air (Makivik Corp.) and Canadian North (IDA), have tried to merge several times but each time it has failed, even though it makes lots of economic sense to do it, or is more cooperation among the EDC’s needed, like the recent cooperation between Air North and First Air ?

As to my blog of August 21, 2016, the Transwest Air deal is done and it is now a fully owned subsidiary of WestWind Aviation, which itself is owned 55% by the Athabasca Basin Development (ABD) and 25% owned Prince Albert Development Corporation (PADC), in short 80% First Nation owned with 20% owned by the employees of WestWind Aviation.

The First Nations now own every airline in the north to some degree (Air Creebec – Creeco, First Air & Air Inuit – Makivik Corp., Canadian North – Inuvialuit Development Corporation (IDA), Air North – Vuntut Development Corporation (VDC), Wasaya Airways, Aklak Air, Air Labrador and more).

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Seems you cannot do business without the First Nations participating in the north these days, either through ownership shares or through joint ventures with subsidiaries like Kivalliq Air, a scheduled service subsidiary of Keewatin Air, owned by EIC, Kitikmoet Helicopters a joint venture with Great Slave Helicopters (GSH) owned by Discovery Air, Aqsaqniq Airways-medivac joint venture with Air Tindi, owned by Discovery Air, and many more small First Nations joint venture air services (e.g. Unaalik Aviation, Ookpik Aviation, Dehco Reegional Helicopters, K’ahsho Got’ne Helicopters, etc.).

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Is this a good thing ? well as long as they are run professionally, which is a BIG question, though some like First Air under President/CEO Brock Friesen and Air North under Joe Sparling are very well run operations by professional, well knowledgeable and experienced airline executives, others not so professional, and Wasaya Airways is one of those that for years was riddled with safety violations and failed safety audits by Transport Canada for years, but never shut down, “too important to fail” ? and that is a concern today with several First Nations owned airlines.

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Now, First Air (Makavik Corp) has made some unusual moves this year, which I do not understand if its mandate is to help the peoples of the Eastern Artic, like selling off their 2 highly valuable and rare Lockheed L-100-30 / L-382G Hercules civilian cargo aircraft (only +/- 35 in service globally out of 115 civilan built Hercules, new LM-100J priced at $US 65 million) to Lynden Air Cargo of Anchorage, Alaska, and will lease them back when needed, yet the aircraft are the only aircraft that can provide out sized cargo to move around the Artic.

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Also, sold off its Kivalliq non aircraft assets to EIC (owner of Calm Air International), which takes over scheduled services, freight and charters in the central artic region ?? and then asks the Federal Government for a $42 million loan to finance “newer” ATR-42-500’s to replace its older ATR-42-300’s (2+ going to Air North). Not sure how those actions go with Makivik objectives.

Makivik, which in Inuktitut means “To Rise Up,” is a fitting name for an organization mandated to protect the rights, interests and financial compensation provided by the 1975 James Bay and Northern Quebec Agreement, the first comprehensive Inuit land claim in Canada, and the more recent offshore Nunavik Inuit Land Claim Agreement that came into effect in 2008. The Objectives are:

  • To receive, administer, distribute and invest the compensation money payable to Nunavik Inuit, as provided for in the James Bay and Northern Quebec Agreement;
  • to relieve poverty, to promote the welfare, advancement, and education of the Inuit;
  • to foster, promote, protect and assist in preserving the Inuit way of life, values and traditions;
  • to exercise the functions vested in it by other Acts or the Agreement; and
  • to develop and improve the Inuit communities and to improve their means of actions.

Meanwhile some First nations owned airlines have gone bust like (Air Mikisew 2011-Ft. McMurray, AB (B99/J31 PHOTO BELOW), First Nations Transportation 2009-Gimli, MB, NAC Air 2008-Thunder Bay, On.), and others.

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There are a few hold outs left today to First Nations ownership, but not for long like the Harrold family at Northwestern Air Lease in Fort Smith, Northwest Territories, then Ledcor with Summit Air, Joe McBryan with Buffalo Airways, Discovery Air with GSH and Air Tindi, all based in Yellowknife, Northwest Territories, the fortress that has yet to be taken over by First Nations development corporations, for now.

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The development of viable business opportunities is essential for the First Nations, Metis and Inuit peoples future prosperity, and here the Economic Development Corporations (EDC) are the business development and drivers of growth and jobs. The EDC are growing but still have challenges with sales growth, capital investment, leadership, relationships with financial institutions, drawing investments and community employment.

I guess change is inevitable, and the sale of Transwest Air to WestWind Aviation this summer, is an example, the merge of 2 great airlines, Athabasca Airways and La Ronge Aviation created Transwest Air and one day that name itself will disappear as well under WestWind Aviation.

Too short you say ? I know it’s a rare short article for me ! till next time, cheers, and thank you for reading my blog.

 

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About Aviation Doctor - Helping aviation companies to transform the present into a more profitable tomorrow

I am a Canadian and EU national with an MBA and 33+ years experience in aviation business development with 20 years overseas and work in 25+ countries. A former investment/merchant banker (mergers and acquisitions to corporate turnarounds). airline and OEM senior executive and past owner of 6 successful aviation companies in 3 countries (executive jet charter/management companies, aircraft sales, aircraft broker, airline/aerospace consulting to aircraft insurance). I have a very diverse aviation background with 75+ aviation companies (45+ airlines of all sizes, OEM's, airports, lessors, MRO to service providers) as consultant, executive management, business analyst and business development adviser. Excellent success track record in International Business Development. Most work with airlines is with new start-ups and restructuring of troubled carriers. I sold new business jets, turboprops and helicopters for Cessna, Raytheon, Gulfstream to Eurocopter as an ASR as well as undertaking sales and marketing of commercial aircraft for Boeing, de Havilland, Dornier, Saab and Beechcraft. Brokered everything from LET-410's to B747's and from piston PA31 to G550 business jets. I look beyond the headlines of the aviation news and analyze what the meaning and consequences of the new information really means. There is a story behind each headline that few go beyond. Picked the name Aviation Doctor, as much of my work has been with troubled companies or those that want and need to grow profitably. I fix problems be in the business, and help with restructuring for a better tomorrow. You can reach me with comments or suggestions at: Tomas.Aviation@gmail.com and I comment a lot on Google+, my Facebook and LinkedIN.

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