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Riding the business wave

Inside Victoria’s picturesque harbour, work has begun upgrading an aging floatplane terminal.


March 22, 2012
By DAVID CARR

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Inside Victoria’s picturesque harbour, work has begun upgrading an aging floatplane terminal. When it reopens later this year, it will be home to owner Seair Seaplanes and the terminus for new scheduled services between the British Columbia capital and Vancouver.

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Seair started operations in 1980 with a single Cessna 185, serving the sport fishing market. The airline now operates a mixed fleet of 185 Skywagons, de Havilland Beavers, Turbo Beavers and the company’s flagship aircraft, five Wipline 8000 float-equipped Cessna 208 Caravans. Photo: Paul Dixon


 

The face of the B.C. floatplane industry is changing. Fishing and recreational charters to remote areas on the B.C. coast remain an important market for most operators. But briefcases are overtaking fishing tackle, especially out of Vancouver, where the convenience of 13-minute flights from Vancouver to Nanaimo, for example, are helping to drain commuters away from the spectacular but tired BC Ferries network.

“Scheduled services have become the mainstay of the business. Victoria and Nanaimo have almost become suburbs of Vancouver,” said Terry Hiebert, a director of the newly established Floatplane Operators Association and operations manager of Seair, the province’s second largest floatplane operator. “Passengers use our service as a bus ride to work, arriving in Vancouver on the Monday morning and flying home Friday.”

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The growth of scheduled floatplane traffic over the past 15 years has helped fill a gap left by the dwindling forestry-based sector. At Seair, traffic on scheduled routes grew between 15 and 20 per cent last year. The airline expects similar growth in 2012.

Based at the Vancouver International Seaplane Base, Seair started operations in 1980 with a single Cessna 185, serving the sport fishing market. The airline now operates a mixed fleet of 185 Skywagons, de Havilland Beavers, Turbo Beavers and the company’s flagship aircraft, five Wipline 8000 float-equipped Cessna 208 Caravans.

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At Seair, traffic on scheduled routes grew between 15 and 20 per cent last year. The airline expects similar growth in 2012. Photo: Paul Dixon


 

The strong push into scheduled service is the fourth time the operator has successfully caught the wave of a growing market, said Peter Clarke, Seair’s president and founder. “We have moved from strictly sport fishing to commercial fishing and to forestry. We are still busy with recreational charters, but now we are growing into the scheduled business by adding more frequencies and routes.”

Scheduled flights now account for approximately 50 per cent of Seair’s business. The airline shares a slip at the Vancouver International Seaplane base but owns its terminal building, one of three the company owns and operates, including the Victoria terminal.

“We like to own our buildings,” said Clarke. “By owning our infrastructure we control our destiny. We can do what we want at our own place without interference from the landlord.”

Ownership also delivers an added revenue stream from other user airlines such as Seattle-based Kenmore Air (the largest seaplane operator in the U.S.) that regularly fly into Seair facilities in Vancouver and Nanaimo for customs-clearance and refuelling as they travel northward.

Although Seair will only begin scheduled service to Victoria later this year, the company is no stranger to the capital. It has been operating charters since 1980 and once occupied the passenger terminal it now owns. As is the practice with the other two terminals, Clarke will rent space to other operators.

Seair plans to serve Victoria from two Vancouver hubs: its home base, and the new Vancouver Harbour Flight Centre (VHFC), a privately owned and operated passenger terminal located behind the Trade and Convention Centre at the Vancouver Harbour Waterfront Airport. The $22-million facility opened in May 2011, and primarily serves commuters travelling between the Pacific Northwest’s coastal communities.

Vancouver Harbour Waterfront Airport is one of the world’s busiest seaplane airports, handling approximately 132,000 aircraft movements and 300,000 passengers annually. VHFC is B.C.’s first for-profit floatplane base, something that has not gone over well with the bulk of operators flying from the harbour.

Harbour Air, the province’s largest floatplane operator, accounting for an estimated 85 per cent of harbour traffic, is one of several companies who have refused to move to the VHFC from the temporary facility the new terminal was built to replace.

At the heart of the dispute is the cost of operating from the new building, which Harbour Air estimates will add $3 million to $4 million a year and which will have to be passed onto passengers in new user fees.

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 “We move hundreds of people and thousands of pounds of luggage and freight every day,” says Seair president and founder Peter Clarke. Photo: Paul Dixon


 

“This is the highest passenger fee ever charged in the history of the B.C. floatplane industry. In fact, it’s a radical departure for our industry, which has traditionally kept airport costs rock bottom by operating such passenger terminals on a not-for-profit basis,” wrote Greg McDougall, Harbour Air chief executive in The Tyee, a popular B.C. daily online magazine.

As one of only two operators leasing space at the VHFC, Seair has almost free run of the airport’s plush passenger lounge and 18 floatplane slips. (The other tenant, Tofino Air, is largely a charter operator with limited scheduled service.) But for how long?

The harbour’s seven-year-old temporary base was scheduled for demolition one month after the VHFC opened and appears to be operating on borrowed time. A campaign to turn the VHFC into a not-for-profit has fizzled and plans for an alternative floatplane terminal are going nowhere, suggesting that something is going to have to give between the holdouts and terminal owner.

Competition at the VHFC will eventually heat up and Clarke is ready, noting that the Caravan’s commercial airliner-style cabin, low cabin noise levels compared with the Beaver and the Twin Otter, and speed, are all competitive advantages. “It’s a fast machine,” Clarke said. “You fly the Caravan beside a turbine Otter and it looks like it is standing still.”

The first Caravan entered the Seair fleet in 2001. The airline now has five of the type, making it the largest operator of float-equipped Caravans in the world. Clarke is impressed with the versatility of the aircraft and hopes to add two more Caravan’s by 2013, as the company looks to retire its aging Beavers.

“We move hundreds of people and thousands of pounds of luggage and freight every day,” he told Cessna’s in-house publication, Caravan Chronicles. “We can quickly take the seats in and out for cargo or passengers. Our business model is flexibility, and the Caravan’s great for that.”

Clarke also likes to point to the safety features of the Caravan, including its terrain avoidance, synthetic vision and moving map features that help pilots operate in low-visibility conditions in remote areas. The Caravan’s Garmin G1000 glass panel is popular with Seair pilots even though the airline only operates in VFR conditions. Each Seair pilot has an average of 10,500 hours of float time on the B.C. coast. Behind the flight deck, the cabin door is unobstructed, meaning passengers do not have to scrabble over seats to exit the aircraft, a longtime safety concern of the floatplane industry.

The aircraft also has appeal for the charter market, which according to Hiebert, has also evolved over the past 20 years from Dad flying out to the fishing lodge for the weekend to whole families travelling to coastal resorts for kayaking and whale watching.

British Columbia is home to approximately 20 per cent of Canada’s commercial floatplane operators and it is every bit as competitive as the country’s mainline air transport industry. Scheduled traffic is up, but there is concern that the market could become saturated by new entrants, especially on established routes. When it launches scheduled service to Victoria, for example, Seair will be breaking a virtual monopoly held by Harbour Air and its West Coast Air subsidiary. Clarke waved away the concern. “All the routes we are flying are growing,” he countered.

In some cases, airlines are serving different market segments on identical routes. Seair’s Nanaimo terminal, adjacent to the BC Ferries dock, is farther north than the Harbour Air base, splitting the market along geographic lines. Clarke likens it to Billy Bishop Airport, Toronto’s own harbour facility, where Porter Airlines has carved out a convenient alternative to Pearson International Airport for customers living and working in the city core.

As scheduled services increase, the floatplane industry is gradually moving away from its bush plane roots, although upgraded Beavers and Twin Otters will continue to dominate the airways. Despite growth opportunities, Seair continues to plot a cautious course. New airplanes are only bought when there is money in the bank and are used to upgrade rather than swell the fleet.

“We are into slow, steady growth,” Clarke pointed out. “But we are adding frequencies to our existing routes, buying terminal buildings and factory-new airplanes. There are not too many in the floatplane business that can say that.”