Float plane plan shifts to tourism from resource sector

Industry logs steady passenger increases but pilot shortages are a growing concern

Annual float plane passenger traffic out of Vancouver’s Coal Harbour has ranged from 247,739 to 258,316 over the five years up to 2016 | Rob Kruyt

When Harbour Air’s Cessna and de Havilland Beaver float planes began taking off from Vancouver harbour 36 years ago, a logging contractor or businessman was the typical passenger being shuttled between Vancouver and Victoria.

Today, you’re more likely to find Mom, Dad and the kids peering out the passenger windows of the company’s fleet of 37 large and small float planes criss-crossing the skies over the picturesque landscape of southwestern B.C. and the Gulf Islands.

The big engine of that demographic shift in passenger traffic should come as no surprise in a province whose economy is increasingly reliant on tourism.

“In the past, it was more scheduled service and the business traveller, but now we are starting to see more and more growth in the tourism sector,” said Eric Scott, vice-president of flight operations and safety at Harbour Air Group, which describes itself as one of the world’s largest float plane operators, with its extensive fleet and staff of more than 400 people during the peak summer months.

“When the forest industry was a lot stronger, Harbour Air saw a lot of growth. It was a big part of the business. But we’ve seen a shift from that. We’re not really so much a float plane operator as we are a regional airline that flies float planes.

“More and more people are wanting to travel by air, so we have needed to add to our capacity.”

Scott noted that Harbour Air is adding a new Cessna Caravan to serve its new route to Seattle this year. The company confirmed in early April that Harbour Air and Seattle-based Kenmore Air will operate direct flights, starting April 26, between the Vancouver Harbour Flight Centre in Coal Harbour and Seattle’s Lake Union. Scheduled to start at two round trips per weekday, the flights are expected to take an hour.

Tourists fill more Harbour Air seats now not only for tours that take them high above Vancouver and the popular pristine alpine lakes nearby but also on the scheduled flights to Vancouver Island for West Coast whale-watching tours and Victoria day trips.

Statistics Canada figures show that passenger traffic between the two largest float plane aerodromes in British Columbia has held relatively steady over the last five years. Annual passenger traffic out of Vancouver’s Coal Harbour has ranged from 247,739 to 258,316 over the five years up to 2016, the last year for which figures are available. Victoria harbour’s annual float plane passenger traffic reached as high as 232,000 between 2011 and 2016.

The economic impact of the float plane industry on the B.C. economy is harder to gauge. A 2013 study conducted for Harbour Air by Brock Smith, a University of Victoria commerce professor, gives some sense of scale.

“In Victoria, [the float plane] is one of our major transportation modes,” Smith said in an interview. “The direct impact of Harbour Air on Victoria is about $3.7 million in direct spending, and their passengers spend about $28 million a year for a total economic impact of $31.5 million or as high as $64 million with the multiplier effect.”

Perhaps just as telling is the survey that Smith conducted of passengers between April and July 2013.

“We asked their passengers, ‘If Harbour Air wasn’t available, would you have been just as likely to have travelled to Victoria?’ and about 18% said, ‘No.’ That’s a fair chunk of spending that would have been lost to the economy.”

Helping fuel the growth of tourist traffic is the rise of online travel agents such as Viator, which have direct access to Harbour Air’s booking systems.

“There has also been a shift in world markets in which Canada is considered more desirable to come visit,” Scott said, “and we have seen all the benefit of that.”

But growth has also exacted its own costs, including reduced diversity within the industry. Back in the 1980s, about 30 distinct float plane services flew between the B.C. mainland, Sunshine Coast, the Gulf Islands and Vancouver Island. Today there are just a handful of operations, with Harbour Air dwarfing the others. Some industry observers remark that while the number of companies continues to shrink, passenger fares rise relentlessly, helping to increase profit margins.

Seair Seaplanes, which started in business two years before Harbour Air, now boasts a fleet of 14 modern float planes that are newer on average than its rival’s aircraft.

Seair president Peter Clarke said his company plies a steadily increasing trade serving Vancouver, Richmond, Nanaimo and the Gulf Islands. It also does about half its total business flying charters for sport fishermen to luxury fishing lodges on the central B.C. coast.

While he is reluctant to divulge specific figures, Clarke said the company during the last half-decade has increased both its revenue and profit.

“The last five years have been good,” he said, adding that it hasn’t hurt that fuel costs have steadied or even dropped a bit, as have insurance premiums.

Both Scott and Clarke predict that their industry’s greatest challenge through the next five years and beyond will be shortages of pilots.

Scott said the entire aviation industry is enjoying record passenger numbers. But with that booming business has come record demand worldwide for trained pilots.

Harbour Air has to compete with the likes of Air Canada (TSX:AC) and WestJet (TSX:WJA) for pilots coming out of training these days, said Scott, noting that the senior carriers are also sapping the number of pilot instructors available to train prospective pilots, which adds to the shortages.

“Young people just aren’t coming up through the system anymore,” Clarke said.

Pilot training can cost between $50,000 and $100,000 for those trying get their requisite flying time. And with the terrific growth in air travel over the last few years, Air Canada and United Airlines (NYSE:UAL), among others, aren’t waiting for students to even finish their university degrees, snatching them up before graduation to train them on their own aircraft.

Exacerbating the global shortage of pilots is the fact that a good proportion of senior pilots are reaching the mandatory retirement age of 65, a red line that was raised in 2012 in Canada from age 60, partly in response to anticipated pilot shortages. Harbour Air employs approximately 80 pilots and prides itself on having one of the lowest turnovers in the industry.

One feature the float plane industry has going for it is that coastal pilots can be home every night, avoiding the jet lag and other downsides of jet travel, something both operators stress at hiring fairs.

“At least they can come home and sleep in their own bed at night,” Scott said.

Meanwhile, Helijet is managing to do a decent business serving both Victoria and Nanaimo from its Vancouver headquarters, said Rick Hill, Helijet’s vice-president of commercial and business programs.

“We’ve built our business around our IFR [instrument flight rules] capabilities, which really sets us apart from the float planes [which use visual flight rules]. We can fly at night, which float planes cannot do, and we can fly in different weather conditions than they can, including inclement weather.”

Helijet, in business since November 1986, has scheduled service between Vancouver and Victoria. It added Nanaimo three years ago.

The company has a fleet of 11 Sikorsky S-76 helicopters, two Bell 206 helicopters, an A-Star helicopter and two twin-engine jets: the Hawker 800 and the Learjet 31. It employs between 65 and 70 pilots.

The float plane and helicopter industries are somewhat complementary, Hill said, noting that Harbour Air’s busiest season is in the summer, which is when Helijet moves six of its helicopters to service the fishing lodges up north and on Haida Gwaii. With Helijet’s IFR capability, its peak season is during the winter.

They do share the common problem of finding pilots, increasingly more difficult as global demand for them continues to rise.

“Everybody is feeling that pinch,” he said. “It’s a very difficult situation, and one that is projected to get worse.”