The province will spend $5 million to help B.C. firms tap “unprecedented” air traffic growth predicted for the next two decades, but Surrey’s aerospace industry may be wary of jumping at the blue sky opportunity.
The recent provincial budget formalized a five-year, $5 million deal between the government and the Aerospace Industries Association of Canada Pacific Division (AIAC Pacific) to attract global aerospace and defence contractors’ attention and win business for B.C. firms.
Jay Teichroeb, vice-president, AIAC Pacific, said the plan aims to “focus dollars” on the best strategic investments to align with Boeing’s (Nasdaq:BA) forecast of about US$4.8 trillion in new aircraft construction as global passenger traffic doubles during “unprecedented growth” to take place in the next 20 years. He said Surrey has a “healthy, robust, growing group of companies,” well placed geographically to access the Boeing supply chain and well supplied with skilled graduates from Kwantlen Polytechnic University.
But Surrey firms engaged in aerospace have traditionally focused on the maintenance, repair and overhaul subsector of lighter aviation and helicopters, not the globally exposed heavy airline business. Surrey aerospace businesses employ 300 people across 24 precision fabrication enterprises and a further 10 aviation service providers. Altogether they contribute about $29 million to B.C.’s $1.2 billion aerospace sector, but many, such as Redline CNC, which operates a newly updated 7,000-square-foot facility at Cloverdale, serve many sectors besides aviation.
Aviation-dedicated firms recognize the “need to specialize and move up at least one level of complexity in the global supply chain” as the B.C. Aerospace Industry Labour Market Survey (2011) puts it – but they serve sophisticated niches. Trinity Aviation Services Ltd., which opened a new South Surrey facility last April, is tightly focused on helicopter work. Also dedicated to helicopters, Avanti Aerospace & Engineering, set up in 2003 near Whalley, overhauls airframes and power plants. Avanti president Anthony Walls said the future “looks good,” with the company set to grow at a moderate pace.
SIL Industries Ltd. president Roy Shellekens expressed similar optimism but with a tinge of caution. Business was steady for the company, which has been based in Surrey for five years, until last year when five customers, including two B.C.-based air charter businesses, failed in quick succession. This could have been disastrous if the company hadn’t been tapped by Air Canada (TSX:AC) and WestJet Airlines Ltd. (TSX:WJA) for outsourcing overhaul work two years ago.
“Air Canada found us, we didn’t find them,” Shellekens said. “Aviation has had it really tough. People can’t afford to fly private planes.”
Some companies are moving away from the aerospace sector. Canam Tool & Engineering, based in North Surrey, sold off its helicopter equipment manufacturing business as Canam Aerospace in 1999. When Canam Aerospace was acquired by DART Helicopter Services in 2008, the Surrey facility closed and operations were moved to California. Today Canam Tool & Engineering does some aerospace work but finds the sector too competitive.
Southern Cross Machining, near Whalley, once worked for Boeing, but owner Leon Massa has distanced the company from the U.S. giant. “There’s too much red tape,” Massa said. “You spend more time doing paperwork than doing the job.”
Nor does Massa push sales in his other aviation business, Compact Radial Engines, which may be the last remaining North American-based maker of engines for ultralight aircraft.
In contrast, Surrey is the place to be for Sky Helicopters. Sky, launched in 2011, has become the main helicopter service provider for the Lower Mainland, Fraser Valley and Sea-to-Sky corridor. Owners Andrew Westlund and John Faulkner set up head office in Surrey to take advantage of the city’s business growth.
