Winnipeg lands aircraft centre for Canada’s new search-and-rescue fleet – Feds to announce Airbus as the winner of a $3-B contract

Originally published by Mia Rabson and Martin Cash for Winnipeg Free Press on December 8th 2016

OTTAWA — Winnipeg’s aerospace industry is expected to get a boost today as the chosen site for in-service support and maintenance of Canada’s new Airbus C-295 search-and-rescue aircraft.

Defence Minister Harjit Sajjan and Public Works Minister Judy Foote will be in Trenton, Ont., to announce Airbus as the winner of the $3-billion contract to replace Canada’s aging fleet of search-and-rescue planes.

That contract includes a 20-year in-service and support program, which a source tells the Free Press will be placed in Winnipeg.

Airbus Defence and Space has partnered with Newfoundland’s Provincial Aerospace to provide the 20-year in-service maintenance for the new planes. Provincial Aerospace is headquartered in Newfoundland but was acquired by Winnipeg’s Exchange Income Corp. in 2015.

Mike Pyle, the CEO of Exchange Income Corp., wouldn’t confirm Airbus as the winner but said if that is the case, “We think it is highly likely that we would have some base here (in Winnipeg) to do work on the aircraft.”

Pyle noted Provincial Aerospace currently does not have the capacity to do the heavy maintenance work required on the C-295.

Winnipeg’s central location and cost factors makes it a more attractive location for that work than Provincial Aerospace’s Atlantic facilities. Winnipeg is also home to one of Canada’s five search-and-rescue bases. The 435 Squadron is based at 17 Wing and is home to one of the C-130 Hercules dedicated for search-and-rescue work.

Pyle refused to speculate on the amount of capital investment that would be required or the size of the workforce necessary to do the work. An industry source very familiar with the maintenance, repair and overhaul industry said a facility set up to do that kind of work on a fleet of 15 to 20 C-295s would likely require a workforce of about 100 people.

Initially, the plan was to buy 17 new fixed-wing search-and-rescue aircraft, but the request for proposals issued in 2015 asked for the bidding companies to suggest how many were needed based on the capabilities of their airplanes.

Exchange Income Corp. owns a 65,000-square-foot hangar at the Richardson International Airport that currently is used for minor line maintenance work for some of its other aviation companies. Whether that is where the C-295 maintenance will be done or whether a new facility will be part of the plan has yet to be announced.

As news broke of the Airbus contract win Wednesday, shares of Exchange Income Corp. shot up $1.97 to $44.42, a new all-time high for the seven-year-old company.

In addition to the Winnipeg maintenance contract, there will also be a training component set up by Provincial Aerospace in Comox, B.C.

The announcement was scheduled to take place in Winnipeg but was moved to Trenton to accommodate the ministers’ schedules.

Airbus beat out the C-27J from Italy’s Leonardo and a plane from Brazil’s Embraer. It was long believed the competition was largely between Airbus and Leonardo.

The decision to buy the Airbus planes brings to an end a 12-year saga to buy new fixed-wing search-and-rescue planes that began when Jean Chrétien was still prime minister and outlasted his next two successors. It has been another example of the difficulties Canada’s military has procuring new aircraft. Some of the C-130 Hercules have been in service since the 1960s and are so old and out of shape the government raided a museum exhibit to get spare parts to keep them in the air.

Winnipeg is home to the largest aerospace sector in Western Canada and the third-largest in Canada, but the federal government is often accused of ignoring or overlooking Winnipeg’s aerospace work in favour of Quebec. Transport Minister Marc Garneau, who represents a Montreal riding, was accused of favouring Quebec recently when he agreed to amend a law requiring Air Canada to keep heavy maintenancework in Winnipeg and Montreal in exchange for Air Canada buying new jets from Quebec’s Bombardier.

Winnipeg was to get an aerospace maintenance centre of excellence in exchange, but earlier this week the Free Press reported that centre is in jeopardy because the deal with its largest component, Cargojet, is falling through. The other two companies involved are still set to participate but are very small.