Viking Air today announced it is laying off 116 people between its North Saanich and Calgary operations.
Employees at Viking Air's headquarters and shop facility at the Victoria International Airport were given termination notices in the morning. Representatives of UNIFOR, the union representing the workers, were there to provide the staff information about the layoffs and support should they need it.
Viking President and CEO David Curtis says the company has had to scale back its production of the Twin Otter aircraft to 18 from the 24 it assembled in 2014. That's one plane off the line every 15 days, instead of one on every 10 days. That means Viking Air has to reduce its workforce, he said.
Curtis said the Russian market for the aircraft they produce is still strong, however the uncertainty over economic sanctions imposed by western nations in the wake of the fighting in Crimea and Ukraine, as well as other factors led to some customers unable to pay for aircraft Viking has already built. Other customers, stated Curtis in a media release, have deferred major acquisitions until conditions improve.
Curtis said Viking has aircraft sitting on the tarmac, unsold. Finding new customers for them is a priority, he said, adding Viking will work with its existing customers first to try to complete the sales.
"We've all been really concerned for the last three years," says Jeanie Blaney, union representative for Unifor local 114's 288 members a Viking. "The company didn't understand early on the amount of work there would be and they ramped up too fast."
Curtis said it's easy to second guess decisions made about the markets.
"Six months ago, we knew things were slowing down and we could have made decision then," he said, adding however management remained optimistic some of their sales contracts could be completed.
Curtis said management spoke to all workers 30 days ago and told them abut the changing marketplace and its potential impact on Viking Air.
"This was not a surprise," he said. "I promised I'd make a decision in those 30 days and that's today."
Before then, he continued, demand for the aircraft was strong. The production of 18 aircraft a year, he said, is still considered quite good. Viking Air is currently seeking aircraft certification in China. Once that is obtained, he explained, Viking can seek out contracts with customers there.
Blaney added Unifor has also been concerned about the amount of contract work sent to the United States and Ontario.
"We've always maintained more of the work should have been done in-house. I'd think folks would be sad to find out only around 20 per cent of the aircraft is actually built here."
She added the union has "seen a lot of overhead. We've all seen the writing on the wall a year ago."
Curtis replied it's common in the industry for companies to diversify its supply chain. He said their U.S. parts suppliers and other contractors are being told about the reduction in aircraft production, which will have an impact on their operations as well. Curtis said had Viking been doing all of this work, the impact of the layoff would possibly have been much greater.
Blaney said the union was on hand to help employees and offer support. She said the company is, to its credit, handling the layoffs in the right way, but that doesn't change the fact people have lost their jobs.
"We are extremely disappointed today," she said.