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Some Canadian operators won’t survive the impact of the ongoing Covid-19 crisis, and many have already had to lay off more than half of their staff, according to Helicopter Association of Canada (HAC) president Fred Jones.
“It’s more than just a probability, it’s a certainty that we’re going to see some failures of operators out there as a result of this, even if we make a quick return to business,” Jones told Vertical. “Everyone is in very difficult circumstances right now, as this couldn’t have happened at a worse time for operators. They’re at the most vulnerable point in their business cycle where they just kept their staff on all winter [despite low revenues] and completed capital-intensive heavy maintenance.”
Those operators who have long-term essential service contracts — such as for firefighting, pipeline patrol, or powerline maintenance or patrol — are the most insulated from the impact of the pandemic.
Conversely, those performing utility work unrelated to essential services, or in fields such as aerial tourism and flight training, are suffering, with contracts either postponed or cancelled entirely.
“Many of them have gone through significant layoffs, anywhere from 50 to 80 percent of staff,” said Jones. The layoffs have been “across the board,” he said, impacting pilots, AMEs, and support staff.
To help companies through the economic impact of the crisis, the Canadian government has offered a wage subsidy for those that can demonstrate a loss of revenue of 30 percent or more. The Canada Emergency Wage Subsidy covers 75 percent of employee wages for up to 12 weeks for qualifying companies. The subsidy is capped at $847 a week per employee. To qualify, companies have to demonstrate that their revenues dropped 15 percent over a given period during the pandemic.
But because the pandemic has struck the industry at what is traditionally a quieter time of year — and just as it is about to ramp up for the busy season — Jones argued that it isn’t a straightforward process for operators to demonstrate the impact.
“We’re just about to embark on what everyone is hopeful is the busy part of the season,” he said. “So it makes this specific calculation that’s applied to that [formula to determine eligibility] really difficult to understand in the context of our business cycle.”
HAC has asked the government for a 90 percent wage subsidy for three months to “get the helicopter industry through the hump,” and Jones said he hopes word of an aviation-specific support package rings true.
“The packages that had been available so far are woefully inadequate to provide the significant relief that we’re in need of, because I would argue we are one of the most adversely affected business segments as a result of this crisis,” he added.
One of the areas that Transport Canada has provided clear help so far is in extending the validity of medicals and pilot certificates by 90 days. The regulator has also indicated a willingness to extend the validity even further, if required.
“What started out as a tsunami of requests [for extension of medicals and certificates] from industry and a trickle of relief, has very quickly, to give [Transport Canada] credit, turned into a tsunami of relief and a trickle of requests,” said Jones.
What is an essential service?
Another area that HAC has asked the government to help with is in providing a clear definition of what is considered an essential service. While there is obvious agreement in some areas — such as firefighting, air ambulance, or powerline maintenance — others, like flight training, are more of a “grey area” due to federal and provincial jurisdictions overlapping, said Jones.
Flight training services have largely been shut down in most provinces due to self-isolation requirements, but Jones gave the example of a pilot who needed a type rating to be able to perform an essential service operation. He argued that this type of training should then be considered an essential service, too.
To help provide further clarity, Transport Canada has been working with the provinces to come up with a uniform definition of an essential service.
“We have urged them to adopt the broadest possible definition of an essential service,” said Jones, “because there will be circumstances that arise where if they don’t draft it broadly, it’s going to exclude certain things that haven’t even occurred to people in the general public.”
Essential service contracts are already highly sought-after among operators, bringing secure and stable work, and the current situation will only intensify their importance, said Jones. “For example, operators will be hungry for any firefighting work that becomes available,” he said.
For those companies that are still operating in the current environment, HAC wants the government to provide clear protocols and procedures for how to do so safely. Jones also called for the provision of personal protective equipment to allow operators to carry people who are exhibiting symptoms of Covid-19.
“Operators are as concerned about the wellbeing of their flight crews and their employees who could be exposed to the virus as anybody else,” said Jones.
Despite the bleak outlook, he said there are potential work opportunities during the pandemic — such as supporting small communities if they need help or someone needs to be evacuated.
“There are a whole lot of communities that are going to require service from helicopter operators and small operators,” said Jones. “But it is a little bit frightening for our members and for the association that every time the federal government makes mention of a special package for aviation, they reference the airlines. We have not heard any discussion of a package from the federal government that would provide relief to smaller air carriers.”