The Aerospace Industry’s Growing Pains

B.C.’s aerospace industry scrambles to keep up as the global industry enters a phase of hyper-growth.

B.C. aerospace industry | BCBusiness
Students learn the basics of aeroplane maintenance at BCIT’s aerospace campus.

B.C.’s aerospace industry scrambles to keep up as the global industry enters a phase of hyper-growth.

At the B.C. Institute of Technology’s aerospace campus, students are clustered in the centre of a large classroom, heads bent over identical piston engines. Their instructor, Larry Bell, tells me that they’re in their first week, that they’re working hard and that there are no Canadian citizens in the class. International students, mostly from Korea, China and Japan, represent about 40 per cent of the student population at this Richmond aerospace training centre. Most, like this group of young men, fall under the school’s classification as “M” students – aircraft maintenance engineers. They are the mechanics of the aviation world, and they make up the largest program on the campus. Many of these international students will return to their home countries once they graduate, says the school’s associate dean, Gordon Turner. Though he admits it’s hard to keep in touch with graduates, Turner says it’s fair to assume that most will have no trouble finding work when they return to their home countries.

Even though students in this particular class will take their expertise home with them, training represents a significant part of the aerospace industry here in B.C., where maintenance, repair and overhaul companies – the “garages” of the aviation world – make up 30 per cent of the overall aerospace sector. It’s a sector that employs approximately 10,000 across the province, and grads who stay here are likely to be snapped up by local companies vying for a slice of the expanding global aerospace industry.

Canada and B.C. are scrambling to define their places in an international aerospace industry that is entering a phase of hyper-growth. In March 2012, Industry Minister Christian Paradis appointed David Emerson, the former minister of foreign affairs (who also served as CEO of the Vancouver Airport Authority in the 1990s), to lead a review of Canada’s aerospace policies and programs. Six industry-led working groups have been struck to come up with recommendations for a comprehensive aerospace framework and plan for the aerospace sector in Canada, which is currently the fifth-largest in the world. Most of the industry in Canada is focused on two subsectors: manufacturing of aircraft and aircraft components, which is concentrated in Quebec and Eastern Canada; and aircraft maintenance, repair and overhaul, which is concentrated here in Western Canada.

“The question for us now is how do we remain competitive and how do we remain ahead of those nations that are investing massively in their own industry?” says Maryse Harvey, vice-president of public affairs at the Aerospace Industry Association of Canada. “The world is changing fast and we’ve got to keep up.”

Competition from emerging Asian, South American and Middle Eastern economies is of considerable concern for the B.C. industry. Singapore, for example, with a GDP about one-tenth of Canada’s, is becoming a global hub for aircraft maintenance, repair and operations, which is the largest subsector in B.C. Following the collapse of Canada’s Aveos Fleet Performance Inc. in March (which saw 250 people laid off in this province), Air Canada sent some of its fleet in need of repair to Singapore’s ST Aerospace.

Still, there are reasons to be optimistic. B.C.’s aerospace sector weathered the 2008 economic downturn relatively well, and currently contributes $1.5 billion annually to the provincial economy, according to the Aerospace Industry Association of B.C. It tends to be highly specialized and comprised of companies that operate in their own market segment.

The businesses that have thrived here in B.C. have done so by finding a niche, like Viking Air Ltd., for example. The Vancouver Island-based company had been refurbishing de Havilland’s Twin Otter float planes for more than 30 years when, in 2006, it bought the right to build them. The following year, the company launched the Twin Otter 400 series, the largest float plane of its kind on the market and a model that is well known (and much loved) for its hardiness. Viking currently has a production backlog order of 55 planes worth more than $350 million, and recently completed an Asian tour to Indonesia, Malaysia, Brunei and the Philippines, and opened negotiations with four new customers there.

Viking president David Curtis says that in the small market for utility airplanes that he supplies, there isn’t a lot of competition. “We have the right product, at the right price, and we occupy a bit of a niche,” he notes. Viking recently sold six Twin Otter planes, plus associated training and support, to the government of Vietnam, marking the first time, Curtis says, that country has purchased from a Western-based supplier.

Many foreign markets like Vietnam are opening up both politically and economically. Curtis chairs the market access and development working group of the federal government’s aerospace review. “The review is about policy,” he says; specifically, it’s looking at how the Canadian government can work with other governments to improve access to markets. Whereas in Canada the primary motivation in filling government aircraft contracts is typically about value and not necessarily about buying Canadian, Curtis explains, it’s not the same in China, for example, where markets have historically been much more protected.

David Schellenberg, CEO of Cascade Aerospace Inc., a specialty aerospace and defence contractor in Abbotsford, also describes his company as being in a “niche” business. Cascade, a subsidiary of Conair Group Inc., also based in Abbotsford, operates one of only 13 facilities in the world authorized to service Lockheed Martin’s C-130 Hercules transport plane, and has a 20-year contract with Lockheed Martin to provide service support for Canada’s new C-130J fleet of Super Hercules. Cascade is currently working with Conair to develop the next generation of fire-fighting air tankers. “That’s a very significant development project,” says Schellenberg. “The life of that project will span the next 20 to 30 years.”

Cascade does about 80 per cent of its business through government defence contracts, and right now that’s a good place to be. “In Canada in particular, you’re seeing a replacement of a number of the Canadian defence fleets,” explains Schellenberg. “The Conservative government has been very progressive in terms of investing in new fleets.” That includes the new F-35 fighter jets. The federal government’s decision to purchase 65 of them from Lockheed Martin has been controversial politically, but is expected to bring hundreds of millions of dollars in revenue to B.C.’s aerospace industry.

Another player in B.C.’s aerospace sector that has benefited from Canada’s F-35 purchase is Delta’s Avcorp Industries Inc. It specializes in components for commercial and military aircraft, and reached a significant milestone when it was contracted by Lockheed Martin to manufacture between 230 and 340 sets of F-35 wings over the next 10 to 15 years. The first set was shipped to Lockheed Martin’s Texas-based assembly plant in January 2012. At the time, Avcorp director and CEO Mark van Rooij told press that he anticipates the project will be worth more than $500 million and will create 50 to 75 new jobs in the region.


Image: Peter Holst
A Hercules transport plane in for service at Cascade

Specialized Labour

With specialization comes the need for a specialized labour pool, and according to van Rooij and others in the industry, finding enough skilled labour can be challenging. This is partly because aircraft technology is changing so quickly – more quickly than the curriculum at post-secondary institutions like BCIT.

The BCIT hangar floor, an impressive space overlooking the Vancouver International Airport, is full of aircraft that span the course of the past several decades, from an Aero Commander jet built in the late ’60s (and recently donated by its owner, an Edmonton businessman) to a Boeing 747 – the most modern aircraft in the hangar – emblazoned with a WestJet logo.

The BCIT curriculum takes into account “fabric and wood at one end, and advanced on the other,” says Turner, but what constitutes “advanced” these days is changing, fast. In the commercial sector, in particular, many fleet types are now several decades old and coming to the end of their life cycle. Airbus recently launched its new 380 and Boeing rolled out its new 787 Dreamliner in spring 2012. In order to work on these types of planes, which are not covered under the BCIT curriculum, employees need extra training, says Turner, but even the basic curriculum needs upgrading. “It does need changing and it needs changing now,” says BCIT’s Turner. “Transport Canada has to take the lead, and I guess industry has to push.”

According to a recent Aerospace Industry Association of Canada survey, 48 per cent of companies surveyed said they had difficulty in hiring people and expected this to become more difficult in the future. Respondents cited reasons including a lack of interest in this career from younger generations, and constantly changing technologies that make basic training, as well as specialized training, increasingly important and complex.

“It’s challenging times,” says Robert Donald, executive director of the Canadian Council for Aerospace and Aviation. The not-for-profit was formed in 1998 in response to a PricewaterhouseCoopers Inc. report that identified a critical shortage of skilled labour in this industry. Since then, the council has worked with the industry to update curriculum for the trades that serve the industry: avionics (aircraft electronics), airport operations, airline and flight operations (commercial pilots), gas turbine technicians and aircraft maintenance engineers.

“I think if there was a more concerted national campaign to make people aware of what’s out there, we would see growth in this field,” says Donald. “It needs to come from industry, in my humble opinion.”

Provincially, the B.C. Industry Training Authority funds aerospace training programs like the ones offered at BCIT, based on demand for those positions in the industry, explains Turner. While he acknowledges that the ITA has its own “budgetary constraints” to worry about, it has cut funding for BCIT’s aircraft maintenance engineer program, which is partly why the school has had to seek out international students, whose higher tuition rates help fill the funding gaps.

With apparent demand for skilled workers, why aren’t there more of them? It’s a complex question, says Turner. The type of companies that might have difficulty attracting employees may be small, remote and relatively low-paying compared to opportunities in the rest of the province, country or world. BCIT aerospace grads are also finding opportunities outside the traditional aerospace field.

Turner points out that TransLink is hiring BCIT aerospace grads starting at about $30 an hour, whereas a smaller aviation outfit based in Prince Rupert or Kelowna might offer $17 an hour and a chance to live in the wilds of B.C., which tends to attract a certain kind of person. “A lot that stay in B.C. are focused on the helicopter side of things,” says Turner. “Western Canada has a large helicopter fleet. It’s a kind of lifestyle that is a bit unique.”

When asked if Cascade has difficulty finding employees, Schellenberg says that finding the right specialty at the right time “is always a challenge.” He adds that Cascade is currently looking for aerospace engineers, and though it does hire from the local market, more typically it will hire people from the eastern provinces who are looking to move west. “We’re fortunate in the sense that we live in a very desirable part of Canada,” he notes. “The Fraser Valley is a little bit less expensive than Vancouver. We have lots of great employees here who have decided to raise their families in this part of the world.”

While most aerospace activity in B.C. has been centred around the Vancouver International Airport in Richmond, the Fraser Valley is eager to develop its own hub of aerospace expertise. Conair and Cascade currently represent about 90 per cent of Abbotsford airport tenants that aren’t related to passenger flight operations, but with a $31-million airport infrastructure expansion project under its belt, the City of Abbotsford wants to bring in more business.

While manufacturing and maintenance make up the bulk of aerospace jobs in B.C., emerging electronic technologies suggest a direction for future growth, as well as a potential advantage in an increasingly competitive global market. The Vancouver Institute of Visual Analytics, for example, grew out of a $1.25-million gift from AeroInfo Systems Inc., a Vancouver-based subsidiary of Boeing, that followed on the heels of a grant that allowed students from both UBC and SFU’s visual analytics departments to pair with Boeing safety engineers. (The initial grant was a result of Canada’s Industrial and Regional Benefits policy, which obligates companies that receive large government contracts – mostly defence contracts – to invest in the Canadian industry, either through subcontracting or grants to research and development.)

Visual analytics emerged in the past decade out of the intelligence community in the U.S., and is essentially a collection of different tools – modelling, infographs, mapping and spreadsheets – to “help people solve really nasty, difficult problems using lots of messy data,” says John Dill, a professor at the Vancouver Institute of Visual Analytics.

One of the most promising projects that emerged from the Vancouver Institute involves research into the problem of aircraft striking birds. The phenomenon got widespread attention in January 2009, when Captain Chesley Sollenberger landed an Airbus A320 passenger plane on the Hudson River, after birds struck both engines. Such incidents are relatively rare, but very dangerous and very costly.

The Vancouver Institute’s project analyzed data on bird-strike incident reports – including details such as time of incident, type of aircraft and weather conditions – and produced recommendations on how to avoid risk. Boeing’s investment, says Dill, “really enabled the development of visual analytics in Canada.”

Investment in emerging fields like analytics is about trying to get “the best value of those systems you’re using, so you can make more cost-effective solutions,” explains Garry Barber, director of defence and government services for Boeing Canada. “Investing to save is something that, I think, in those areas holds very true,” he adds. He describes a “shift in culture” at the federal government level. While defence contracts have typically been much more hands on, now the opposite is true. Rather than assign pieces of work, government is now contracting out management of entire programs and expects that industry will work out for itself how to best meet performance measures set out.

“It’s somewhat of a hands-off relationship from government,” says Barber. “For Boeing Canada, being a small subsidiary of Boeing, developing that expertise in terms of how you manage contracts from a performance standpoint is how we’re trying to develop our expertise to sell back into the Canadian government. That lends itself to things like data analytics and visual analytics because it gives you that edge.”

The recommendations on how Canada can maintain its aerospace edge in an increasingly competitive global market are expected to be released by the end of 2012. Despite Emerson’s assertion that the recommendations will be “fiscally neutral,” industry leaders are excited about the opportunity to have their say. “It’s a very globally competitive business,” says Schellenberg. “In Canada, we need to have the right policies and the right framework so that we can compete against other countries around the world.”