Kelowna Flightcraft confirmed Wednesday the loss of a high-profile contract worth an estimated $1 billion.
“Since 1977 we have been a key supplier of dedicated and reliable air service for Purolator and, more recently, Canada Post,” said Tracy Medve, Kelowna Flightcraft’s President. “While their decision (to change carriers) is disappointing, particularly in light of the 99 per cent reliability we currently provide, it is by no means the end of Kelowna Flightcraft.”
The Canada Post contract was awarded to Mississauga Ontario-based competitor Cargojet which, in a press release, pegged contract revenues at approximately $1 billion during the initial seven-year agreement, based on projected volumes. Their stock values rose 22 per cent as news of the contract that begins in March 2015 was released.
Dollar losses aren’t something Flightcraft is willing to discuss just yet.
Grant Stevens, Flightcraft’s director of human resources, said they still have 13 months to finish off the current contract, while working toward replacing lost business with something just as lucrative.
“As we look at the forecast moving forward, and listen all the talk on LNG, we can see that there’s demand for heavy lift (services) to the north,” said Stevens. “That may be an opportunity for us.”
If they can’t replace the contract, however, the company could change significantly.
Most notably, a fleet of 18 airplanes will be grounded.
In jobs that amounts to 115 pilots, the vast majority of whom don’t live in the Okanagan, without work when the contract ends.
Locally, Stevens said the losses will be less significant as the company is fairly well diversified.
“We have about 15 flight operations support staff in Kelowna that are at risk if we aren’t able to replace the work,” Stevens said.
But, he’s confident those jobs will stay in the area.
“In our 44 year history, it’s not unusual in aviation to lose a contract and bounce back,” he said. “We’ve lost one before with Purloator and Greyhound…. This time we have advance notice, and we are resilient.”