Despite Spar’s departure, insiders say the aerospace industry is poised for resurgence |
by Caitlin Crawshaw / Illustration by Sonia Roy
Sidebar: Boldly Going Where No Man Has Gone Before
This past April, thousands of Star Trek fans flocked to the small Alberta town of Vulcan to meet 79-year-old Leonard Nimoy, the actor who played Spock in the short-lived but highly influential television series.
The town, which shares the name of the character’s home planet, has long exploited this connection for tourism gains, building a spacey tourism centre to draw visitors and, most recently, a bronze likeness of Nimoy. Vulcan’s tourism strategy works because space continues to captivate the imaginations of young and old, as it has since Yuri Gagarin orbited the Earth aboard Vostok 1 in 1961.
But the aerospace industry is doing its best to bring the high fantasy of shows like Star Trek and other portrayals of science fiction futurism down to earth. Virgin Galactic – the brainchild of business tycoon Sir Richard Branson – is on the verge of bringing space out of the exclusive purview of government-sanctioned missions and into the realm of the private consumer. After creating SpaceShipOne – which became the first private spacecraft to fly above the boundaries of space (100 kilometres above the Earth) in 2004 – Virgin Galactic is now testing SpaceShipTwo. This second craft will fly even higher – 110 kilometres – and has room for a two-person crew and six passengers. The cost of the two-hour flight, which includes six minutes of weightlessness, runs about US$200,000. Despite the astronomical cost of the trip, hundreds of people have already signed up to be among the first amateur astronauts.
“The space sector is about to open up really quickly,” predicts Ian Mann, a University of Alberta space researcher who regularly collaborates with NASA. He points out that in a recent speech, President Barack Obama outlined a vision for the country’s space program that incorporates involvement by the private sector and directs NASA’s efforts towards research and development. “What it’s going to mean is that you suddenly have increased capabilities and capacity for industry to take advantage of that market niche and then to commercialize it beyond that into, really, a pay-for-service application.”
Space tourism could provide a more affordable platform for putting satellites into space, a boon for both research and industry. Space tourism could also pave the way for quicker transport between countries. “If you have a suborbital vehicle, you could fly from London to Sydney in, I don’t know, 30 or 40 minutes,” says Mann. Just as the journeys on the first airliners were too pricey for the average person, space travel will be exorbitant at first, but eventually it will be affordable for most people, he figures. Alberta’s aerospace industry may be poised to take advantage of this blending of science fiction and fact. At the moment, Alberta has about 170 companies and 5,000 employees in the aerospace and defence sector. The province is well known for its aerospace research, says Mann, and both the U of A and University of Calgary collaborate with major players in the industry.
Mann is working with NASA’s THEMIS mission to study space weather – namely, the physics phenomena responsible for the northern lights – that can damage orbiting satellites. David Peace, senior director of the Aerospace and Defence Industry Branch at Alberta Finance and Enterprise says this $1.3-billion industry could expand enormously in the next couple of years. If the industry sees five per cent growth, as it has in the past, it could become a $2.8-billion sector by 2026. “It’s a high-tech industry, and it’s not heavily influenced by changes in oil and gas,” he says.
Yet for an industry that is so clearly focused on the promise of tomorrow, the aerospace industry’s success is, ironically, largely rooted in the past. Since the 1940s, the province of Alberta has had an active aerospace sector. During World War II, the British Commonwealth Air Training Plan (BCATP) created airports in major urban centres across Canada for Allied pilots to train. Alberta also became home to some of Canada’s largest defence facilities in the ’40s and ’50s, including the American-built Namao Airfield (now Canadian Forces Base Edmonton) and 4 Wing Cold Lake, a fighter base for the Royal Canadian Air Force. Alberta also became home to CFB Suffield, 50 kilometres north of Medicine Hat, which is one of the largest live fire training areas in the western world.
After the war, aviation continued to be an important industry in Alberta, bolstered by the infrastructure created during the war and the development of other parts of the economy. “The resource industry really became a lightening rod for what we call corporate and commercial aviation,” explains Ken Beleshko, executive director of Aviation Alberta. With so many resource company head offices based in Calgary, there was a need for corporate aircraft, and Alberta companies emerged to meet this need. And, since Alberta was on the trans-Canada flight paths, the province’s airports – particularly the Calgary International Airport – flourished. Some of that prosperity has faded in recent years, though. For example, Alberta’s foothold in the maintenance, repair and overhaul (MRO) part of the sector, a traditional strength, has slid in the last four or five years, says Beleshko.
Calgary’s Field Aviation has lost defence contracts in recent years and shifted their focus to their Toronto operations. A long-time MRO in Edmonton also lost contracts and shut its doors in 2009, much to the chagrin of its 185 workers. Formerly known as Spar, the company was acquired by L-3 Communications Corp. – a U.S. company with branches across North America, including several Canadian locations – in 2002. The closure came three years after L-3 lost a contract to maintain the Canadian Forces’ CC-130 Hercules aircraft, a service they’d been providing for many years. But, when the service went up for tender, it was the bid put forth by B.C.’s Cascade Aerospace Inc. that won. A few years later, unable to secure enough commercial work to make its operations in Edmonton viable, L-3 shut down its Alberta branch.
“There were a lot of people out of jobs, but I think what it’s meant to Edmonton is that Edmonton has lost its prominence in the aircraft overhaul and maintenance business,” says Beleshko. He figures the economic impact probably measures in the millions of dollars. Peace agrees that the loss was tremendous, but argues that at the same time L-3 was winding down other MRO players were entering the market, like Air Spray Ltd. and Whitecourt’s Airborne Energy Solutions Ltd. He adds that the province is in talks with a few large multinational companies that could more than make up for the loss of L-3, although he’s not able to release any details yet. “It’s a preliminary discussion.”
SPACE MAN: Ian Mann, an aerospace industry researcher at the University of Alberta, also does work for NASA
The repair and overhaul market is just one slice of the aerospace industry, though, and Alberta appears intent on competing for a bigger share of the pie. But if the province is to compete with provinces like Quebec, Ontario and Manitoba, who have all attracted major investments from the industry’s big players, it may have to recalibrate its approach. Beleshko argues that other provinces are more aggressive in their attraction of aerospace companies, offering tax credits and financial incentives, something Alberta stopped doing years ago. He points to the province’s attraction of Pratt and Whitney Canada Inc. – a major aircraft engine manufacturer – to Lethbridge in 1990, which has provided significant economic benefit to the region. In Beleshko’s view, it still makes sense to help companies establish themselves in Alberta in order to become “anchor tenants,” inevitably stimulating a supply chain of related businesses and industries.
Tax credits or not, though, the Alberta government isn’t sitting idly by. This spring, Alberta published a new aerospace industry strategy after consulting stakeholders from government, academia, and industry. The report that emerged from those consultations itemized the province’s areas of strength, which include robotics and un-manned vehicle systems, defence electronics, space science and aerospace geomatics, manufacturing, maintenance, repair and overhaul, (MMRO), and logistic support for military. Of these areas of advantage, unmanned vehicle systems (UVS) may be one of the most promising. A $40-billion industry worldwide, Canada captured $787 million of the UVS market in 2007, and in Alberta alone there are more than 70 companies, military agencies and educational institutions working in this area. UVS may sound pie in the sky, but unmanned vehicles – both those operated within visual line of sight and beyond – offer practical alternatives to all kinds of tasks. Overnight parcel delivery could be done by UVS, as could arctic patrols, the inspection of aqueducts and snow clearing in municipalities.
“There’s almost as many applications as you can think of,” says Dewar Donnithorne-Tait, the president and CEO of the Canadian Centre for Unmanned Vehicle Systems. This is imagination-capturing stuff, but UVS and the province’s other aerospace sectors won’t be able to translate their bright ideas into sustainable enterprises without skilled workers. Alberta Finance and Enterprise’s David Peace believes that when one considers the combination of current retirees and an anticipated two per cent increase in the demand for workers overall, the province will need 62,000 additional skilled workers by 2016.
Yet today there are 5,000 Albertans employed in the industry, and few post-secondary programs geared at the aerospace industry. That’s why the province has started to work with academia in an effort to explore new training opportunities, one that Beleshko endorses. “Once you erode that skill base, you’ll never get it back. That competitive advantage will go elsewhere in the country and we’ll have some real challenges trying to recover it.”
Another area of concern identified in the province’s strategic consultation is the scope of the industry’s research and development activities. “We’ve got a great amount of research that’s being done at the defence research establishment in Suffield, for the military. We’ve got a lot of research and development being done at our universities and we’ve got a lot of private R&D being done within companies,” says Peace. “We want to get those guys talking more regularly and in a more formal way. It’s happening now informally, but we want to create a bit of structure behind that so it’s easier for them to collaborate.”
Mann would like to see “space-qualified universities” like the U of A and U of C collaborating with aerospace companies to create spinoff technologies from the space research happening in Alberta. There’s already some collaboration, but Mann says commercialization hasn’t happened yet. “Where universities have a strength is in innovation. Universities are a unique opportunity for establishing an innovative footprint and doing it at relatively low cost compared to what it costs at … private companies,” says Mann. Thanks to graduate students and a focus on research, not producing profits, universities have more freedom in which research questions they explore.
Despite these challenges, Beleshko remains optimistic about the Alberta aerospace industry’s long-term prospects. For one thing, he argues, the industry is due for an upswing if historical trends repeat. Typically, aerospace operates in 10-year cycles, and while the years ending in a “0″ or “1″ are marked by poor performance, the industry picks up steam afterwards. Meanwhile, thanks to the limited lifespan of the average aircraft, significant fleet changes and repairs are on the horizon. What’s more, Alberta still has a skilled workforce and has maintained a reputation for its repair and overhaul of large and medium-sized aircraft. “I still think the future for this industry in Alberta is bright.”
Predicting the future is a mug’s game, and the path that lies ahead for Alberta’s aerospace industry is no clearer. But there’s little doubt that the lives of Canadians from coast-to-coast will be shaped by the development of space technologies, and Alberta is poised to make significant contributions to that shared future.













July 16th, 2010 at 4:01 pm
I have to agree that Alberta’s aerospace future looks bright. However, I do not believe the same can be said for Edmonton. The aerospace industry is very close knit and it does not operate in a vacuum. The industry players are very aware that the City of Edmonton is planning to close the City Centre Airport and will decimate Edmonton’s aerospace industry in the process. I’m sure the uncertainty at the City Centre Airport played a vital role in L3’s decision to close its Edmonton Operations.
July 23rd, 2010 at 11:58 am
[...] other feature appears in this month’s issue of Alberta Venture and examines the evolution of Alberta’s aerospace [...]