B.C. firm chasing $3-billion deal to modernize rescue plane

Although foreign company expected to get contract, executive says building aircraft in Canada would create jobs in downturn

STEVEN CHASE

From Tuesday's Globe and Mail
January 6, 2009 at 3:36 AM EST

OTTAWA — A British Columbia aircraft maker is pitching the Harper government to reconsider plans for replacing the aging Buffalo search and rescue planes with what's expected to be foreign-made technology, saying it can produce a modernized Buffalo in Canada at a lower cost.

Viking Air Ltd. recently sent a letter to all MPs pressing its point as Defence Minister Peter MacKay prepares to tender a $3-billion contract for new search and rescue aircraft - one that industry sources speculate could be the sole-source purchase of the Italian-American C-27J Spartan.

A made-in-Canada solution is the type of stimulus that could be helpful as the Harper government scrambles to craft a multibillion-dollar plan for reviving the economy.

Victoria-based Viking Air has proven adept at reviving defunct aircraft, having recently starting manufacturing a new version of the de Havilland Twin Otter - a plane last produced in 1988. It also owns the rights to build new Buffalos and is responsible for supporting the existing worldwide fleet.

Viking Air president David Curtis said he is not looking for a handout. He said he can build a modernized version of the Buffalo for 40 per cent less than the C-27J, produced by Alenia North America, a subsidiary of Italy's Alenia Aeronautica.

Plus, he said, the contract would mean a doubling of his 350-strong work force in Victoria and Calgary - welcome jobs during an economic downturn.

Restarting production of the Buffalo - last produced by de Havilland decades ago - would also provide Viking Air with a made-in-Canada aircraft that it could shop worldwide.

"It's far cheaper to invest in a platform you already know. ... Modernize it and we then get a product we can market globally, just like Alenia is doing," Mr. Curtis said.

He said he could have a new Buffalo in service in four years, which is earlier than National Defence's official deadline of 2015 for new search and rescue aircraft.

Canada's current Buffalo search and rescue planes - used in the Rocky Mountains and coastal British Columbia - have been in service since the late 1960s.

Mr. MacKay's office said no decision has been reached on which plane to buy and all options are being considered. But it is clear the government wants to buy aircraft soon - a schedule that appears to conflict with the normally lengthy competitive bidding process.

"Minister MacKay's goal is to procure [fixed-wing search and rescue aircraft] early this year. Beyond that, it is premature to speculate on the exact nature of the aircraft to be procured," spokesman Jay Paxton said.

NDP defence critic Dawn Black called on the government to seriously consider the Viking Air proposal, saying pilots praise the Buffalo's handling and its ability to fly at low speeds for surveying mountainous areas. "We need jobs in Canada. We need to kick-start our economy."

Mr. Curtis said Ottawa should consider a joint Viking Air-Bombardier Inc. proposal, because while Buffalos are ideal for Western Canada, Bombardier's search and rescue plane, a variant of its Q-Series Dash 8 passenger aircraft, might work better on the East Coast.

The $3-billion budgeted for up to 17 fixed-wing search and rescue planes includes $1.5-billion for aircraft and an equivalent amount for long-term maintenance.

Alenia is also pledging major industrial benefits for Canada if it wins the contract. It is promising to bring $3-billion in high-tech aerospace work to Canadian companies and to provide access to further opportunities through parent Finmeccanica.