Aviation companies ground operations in Penticton
A pair of Penticton Airport-based aviation companies are calling it quits.
After 10 years in business, Southern Skies Aviation Ltd. has already ceased operations and next-door neighbour Kittyhawk Maintenance Centre is expected to be closed by the end of the summer. Owners of both businesses made the announcements this week.
“It’s never one thing but we simply have no revenue stream right now and the outlook for the future is bleak so we said: You know what? let’s cut our losses now,” said Mark Holmes, who along with wife Joan operated Southern Skies which did mainly fixed-wing flight instruction and some charter work. “We’ll put the business up for sale as an entity until September and then if it doesn’t sell we’ll most likely sell our assets at that time.”
The closure will put a total of 11 staff out of work, five full-time and six part-time. And the grounding of Southern left Kittyhawk’s Ray Molland little choice when it came to deciding his future at the Transport Canada-operated facility.
“My hangers were already up for sale and I was looking at my business here and it was just borderline and without Mark at Southern Skies — he was my number one customer — I’m actively looking at moving,” said Molland who bought the business in 2004 with avionics specialist Simon Murphy who is now working out of Kelowna. “On the maintenance side I would say Southern provided at least 60 per cent of our business.”
Dave Allen, who manages the Penticton Regional Airport doesn’t expect the loss of Southern will have a big impact on the flight centre.
“It’s significant for the size of this airport but it’s not unmanageable. It is an important component of the airport operations both flying and the services you provide to aviation. They were our only (fixed wing) pilot training school at the airport. I’m sorry to see him go and I don’t want to see him go, but I don’t know what else we can do.”
The manager added he has already had some inquiries from people who are interested in operating the business. Holmes said two of the biggest problems facing the flight instruction business is a lack of government funding for students and low pay new pilots receive.
“It’s a problem that’s been with aviation for a long time. It costs you a lot to train and then when you get your license you can only make about $18,000-$30,000 a year for the first three to five years so you have this huge whacking bill and you can barely survive,” he said. “The other thing is the maximum a student can get is about $9,000 so when you’re trying to payoff an average $60,000 program (for a commercial pilot instrument and multi-engine rating) it doesn’t go very far.”
With the exception of isolated pockets in certain regions, the problems that forced Southern out of business are much the same across the country. One element he plans to pursue vigorously at the federal level is the amount of taxation those in the aviation industry are forced to endure. Most importantly will be attempts to get the Conservative government to re-invest that money, particularly to help students.
“Perhaps if we make the government aware of the shortfall in our industry and see if we can’t get them to release money to students because if we don’t the training industry is going to collapse,” said Holmes.
Kittyhawk’s owner agreed with the concerns about higher taxation levels that were made even worse with the introduction of the HST which added a new tax on certain mechanical procedures. Compounding the problem is because these extra costs are passed along to the consumer many private airplane owners are using the services of individuals instead of certified companies.
“Transport Canada allows a licensed mechanic to come in an work on (private) airplanes,” he said. “I don’t know why people take that risk. I guess if people can afford it they don’t take that risk but it just seems like if its a choice between not flying and having a private guy to do it, you’re going to go that route.”