rotornut
25th Apr 2007, 11:41
'Workhorse of the North'
World demand for Canada's Twin Otter aircraft has spurred a Victoria company to restart production after two decades
Scott Deveau
Financial Post
Wednesday, April 25, 2007
Resting on the banks of MacKay Lake, 240 kilometres north of Yellowknife, is a small hunting lodge to which hundreds of tourists trek every year for the pristine landscapes and the aurora borealis, and to hunt caribou and fish for giant lake trout.
But with no roads leading there, and thousands of acres of rugged terrain surrounding it, Gary Jaeb, owner of the MacKay Lake Lodge, is entirely dependent on chartering de Havilland Twin Otter aircraft to get customers up to the lodge each summer.
The rugged twin-engine aircraft can land on the lodge's gravel runway or at its float dock -- it can even land on snow -- which has secured its place as the backbone of the Canadian hinterland.
"The Twin Otter is the workhorse of the North," said Mr. Jaeb in an interview.
The aircraft went out of production nearly two decades ago, and the global fleet of Twin Otters has shrunk from the 844 made to about 600 still in the air.
However, a small Victoria-based aerospace manufacturer announced its plans this month to bolster the Twin Otter's numbers by bringing the Series 400 model back into production for the first time since 1988.
According to David Curtis, president of Viking Air Ltd., there was one reason for resurrecting the Canadian- made aircraft: demand.
The 19-seat passenger planes are used in jungles, deserts and mountainous areas around the world, in places where there are no control towers or asphalt runways. The plane's ability to land on wheels, skis or floats has made it as popular in Africa as it is in the Alps or the Arctic.
"These areas where they punch in these tiny dirt strips and they need to get people in an out of them, the Twin Otter will do it all day long," Mr. Curtis said.
The DHC-6 Twin Otter was developed by de Havilland Canada in 1964, before it took flight one year later. Its short takeoff and landing ability made it a fast favourite as a regional passenger or cargo plane and has since secured its popularity for skydiving, or as an air ambulance or island hopper.
The Twin Otter went out of production in 1988 but Viking purchased the rights to produce the parts and the planes from Bombardier Inc. last year, along with six other de Havilland heritage aircraft, including another favourite of the Canadian North, the DHC-2 Beaver.
"The emotional favourite to go back into production was the de Havilland Beaver, but it's a much more crowded marketplace with a lot more single-engine aircraft," Mr. Curtis said. "We looked at the whole product line but, really, the Twin Otter kept coming up."
An independent market assessment commissioned by Viking found that as many as 400 Twin Otters could be sold over the next decade.
"Used Twin Otter prices are continuing to escalate. People are trying to expand their business models based on that airplane, but they just can't get them," Mr. Curtis said.
"The costs to develop a new airplane for what is essentially a niche market are just huge. So there hasn't been anything that hit the market that does what the Twin Otter does."
While there are a couple of direct competitors on the market -- China's Harbin Y-11 and the Polish PZL Skytruck -- neither stacks up against the Canadian competitor, he said.
Roughly 75% of the global fleet are more than 25 years old, which means most of the Twin Otters in existence are not allowed in some countries where it is ideally suited, such as India and Nepal, which have 15- and 25-year age limits respectively on planes allowed to fly in those countries.
Viking began taking orders for the Twin Otter last September to test global interest. After receiving more than two dozen orders from carriers around the world, Viking decided this month that it would begin manufacturing the plane again immediately.
Loch Ard Otters LLC, of Palm Beach, Fla., purchased six Twin Otters from Viking with an option for six more, according to Matthew Lorentzen, Loch Ard's president. Loch Ard plans to lease the planes around the world.
"Even though it's an older design, it's still the best aircraft out there," Mr. Lorentzen said.
The first of the $3.2-million planes will be delivered at the beginning of 2009 to Zurich-based Zimex Aviation, which operates most of its fleet in Africa. In total, seven units will be delivered in 2009, 12 in 2010 and 18 in 2011.
The parts will be manufactured in Victoria, with final assembly in Calgary, almost doubling the workforce of the 175-person Viking operation.
"We really wanted to keep it a Canadian program, even though there [are] a lot naysayers out there saying you couldn't build it in Canada," Mr. Curtis said.
To help cover the sky-high startup costs, Viking will draw on the recently announced federal Strategic Aerospace and Defence Initiative.
The new Twin Otter will have slight modifications -- it will be lighter and use modern avionics -- but will fundamentally be the same plane.
"I like to use the analogy, rightly or wrongly, it's like the Chevy truck," Mr. Curtis said. "While the seats are more comfortable and you may have more do-dads in it, it's still a pickup truck."
Financial Post [email protected]
World demand for Canada's Twin Otter aircraft has spurred a Victoria company to restart production after two decades
Scott Deveau
Financial Post
Wednesday, April 25, 2007
Resting on the banks of MacKay Lake, 240 kilometres north of Yellowknife, is a small hunting lodge to which hundreds of tourists trek every year for the pristine landscapes and the aurora borealis, and to hunt caribou and fish for giant lake trout.
But with no roads leading there, and thousands of acres of rugged terrain surrounding it, Gary Jaeb, owner of the MacKay Lake Lodge, is entirely dependent on chartering de Havilland Twin Otter aircraft to get customers up to the lodge each summer.
The rugged twin-engine aircraft can land on the lodge's gravel runway or at its float dock -- it can even land on snow -- which has secured its place as the backbone of the Canadian hinterland.
"The Twin Otter is the workhorse of the North," said Mr. Jaeb in an interview.
The aircraft went out of production nearly two decades ago, and the global fleet of Twin Otters has shrunk from the 844 made to about 600 still in the air.
However, a small Victoria-based aerospace manufacturer announced its plans this month to bolster the Twin Otter's numbers by bringing the Series 400 model back into production for the first time since 1988.
According to David Curtis, president of Viking Air Ltd., there was one reason for resurrecting the Canadian- made aircraft: demand.
The 19-seat passenger planes are used in jungles, deserts and mountainous areas around the world, in places where there are no control towers or asphalt runways. The plane's ability to land on wheels, skis or floats has made it as popular in Africa as it is in the Alps or the Arctic.
"These areas where they punch in these tiny dirt strips and they need to get people in an out of them, the Twin Otter will do it all day long," Mr. Curtis said.
The DHC-6 Twin Otter was developed by de Havilland Canada in 1964, before it took flight one year later. Its short takeoff and landing ability made it a fast favourite as a regional passenger or cargo plane and has since secured its popularity for skydiving, or as an air ambulance or island hopper.
The Twin Otter went out of production in 1988 but Viking purchased the rights to produce the parts and the planes from Bombardier Inc. last year, along with six other de Havilland heritage aircraft, including another favourite of the Canadian North, the DHC-2 Beaver.
"The emotional favourite to go back into production was the de Havilland Beaver, but it's a much more crowded marketplace with a lot more single-engine aircraft," Mr. Curtis said. "We looked at the whole product line but, really, the Twin Otter kept coming up."
An independent market assessment commissioned by Viking found that as many as 400 Twin Otters could be sold over the next decade.
"Used Twin Otter prices are continuing to escalate. People are trying to expand their business models based on that airplane, but they just can't get them," Mr. Curtis said.
"The costs to develop a new airplane for what is essentially a niche market are just huge. So there hasn't been anything that hit the market that does what the Twin Otter does."
While there are a couple of direct competitors on the market -- China's Harbin Y-11 and the Polish PZL Skytruck -- neither stacks up against the Canadian competitor, he said.
Roughly 75% of the global fleet are more than 25 years old, which means most of the Twin Otters in existence are not allowed in some countries where it is ideally suited, such as India and Nepal, which have 15- and 25-year age limits respectively on planes allowed to fly in those countries.
Viking began taking orders for the Twin Otter last September to test global interest. After receiving more than two dozen orders from carriers around the world, Viking decided this month that it would begin manufacturing the plane again immediately.
Loch Ard Otters LLC, of Palm Beach, Fla., purchased six Twin Otters from Viking with an option for six more, according to Matthew Lorentzen, Loch Ard's president. Loch Ard plans to lease the planes around the world.
"Even though it's an older design, it's still the best aircraft out there," Mr. Lorentzen said.
The first of the $3.2-million planes will be delivered at the beginning of 2009 to Zurich-based Zimex Aviation, which operates most of its fleet in Africa. In total, seven units will be delivered in 2009, 12 in 2010 and 18 in 2011.
The parts will be manufactured in Victoria, with final assembly in Calgary, almost doubling the workforce of the 175-person Viking operation.
"We really wanted to keep it a Canadian program, even though there [are] a lot naysayers out there saying you couldn't build it in Canada," Mr. Curtis said.
To help cover the sky-high startup costs, Viking will draw on the recently announced federal Strategic Aerospace and Defence Initiative.
The new Twin Otter will have slight modifications -- it will be lighter and use modern avionics -- but will fundamentally be the same plane.
"I like to use the analogy, rightly or wrongly, it's like the Chevy truck," Mr. Curtis said. "While the seats are more comfortable and you may have more do-dads in it, it's still a pickup truck."
Financial Post [email protected]