Success at the 60th Parallel: In the far north, family charter firm prospers via mergers, capturing opportunity

Business Profile

Success At The 60th Parallel

In the far north, family charter firm prospers via mergers, capturing opportunity

By David Kosub

August 2004

Making that first trip along Highway 3 into Yellowknife insummer, they tell you, is usually accompanied by a small jolt. No,not by anything you’ll encounter on the road: It’s thesudden jolt of recognition that where rubber tire travel is concerned,you go this far and no farther. Whether you’re a hunter intent on tracking down caribou hundreds of miles north or a mining executive with business in Lac de Gras, your only option here north of the 60th parallel is fixed wing aircraft.

Air Tindi flies some 100,000 people each year to the forests, rivers, and diamond mines in the far reaches of North Central Canada. Air Tindi in the summerAir Tindi in the winter

That simple fact has made the fortunes of some charter companies in Canada’s most northerly city and spelled disaster for others. Air Tindi, says company comptroller Sheila Arychuk, is one of the great northern success stories. Arychuk remembers her brother- and sister-in law Peter and Teri working out of a tiny office overlooking four float planes in 1988 and how content they were flying hunters, fishermen, and mining execs into the interior. All that changed when one of the other local charters, Bathurst Air Services, got into difficulty.

“Bathurst ended up merging with us and we became Air Tindi. Within a year and a half, Saskatchewan’s La Ronge Aviation, which had a base of operations up here, approached us. A lot of their summer business was flying for Bathurst Inlet Lodge and they knew once we started Air Tindi that that business was going to come over here.”

Putting Together the Pieces
In fact, Air Tindi’s remarkable growth has been due largely to mergers with smaller, troubled charter companies. In 2004, the company operates a diversified fleet of 22 fixed wing aircraft and employs over 130 people in the peak summer flying season. The company boasts a 14,000 square foot hangar housing its maintenance and sheet metal departments at Yellowknife’s international airport, along with a brand new 18,000 square foot Dash 7 hangar. Gone is the single office: in its place, a new three-story administration and flight operations building at nearby Latham Island base.

“It was hilarious,” operations manager Teri Arychuk recalls.” When we first started, the office we had was the size of this office I’m sitting in now and five of us worked out of it. Then we operated out of an old double-wide trailer that Peter and I lived in right on the site. So moving into this space was a huge change.”

Air Tindi vice president and marketing manager Peter Arychuk says the company’s growth is also closely tied to the fortunes of a growing mining industry, beginning with the discovery of diamonds in the early ‘90s. He estimates along with “the groceries and fuel” the company flies about 100,000 people into the forests, rivers, and mining camps each year. It all adds up to about $15 million U.S. in annual sales.

“Everything north of here has to be flown in or trucked on the winter road. So the float plane business is very big here. We are still the largest float operator in the Northwest Territories and possibly the entire country.”

Air Tindi VP Peter Arychuk, right, holds two of the obvious attractions of the far north. He says Air Tindi’s growth is also tied closely to area mining. Peter Arychuk, Air Tindi VPAir Tindi sea plane

That’s not happened without a few hiccups. Air Tindi prides itself on its ability to offer a range of services that includes business and mining exploration, medivac, sightseeing, and recreational air services. When those services included opening of a flight training center in 1994, however, it became apparent the company’s reach had exceeded its grasp.

“We had a tremendous pile of students and it was quite a thing, but we were trying to run it with our charter operation and it just didn’t work. There were too many people wandering aimlessly around the hangar and stuff. It had to be a separate entity all on its own.”

Shared Responsibilities
So growth is a virtue, but too much growth too quickly can become a vice. That’s partly evident in the philosophy and work habits of Air Tindi’s president. Alex Arychuk readily acknowledges you’re as likely to find him working on an aircraft engine at the back of the administration building as in his office. He attributes Air Tindi’s ability to hold onto its pilots and maintenance staff in an industry rife with employee poaching to the daily contact he and the other three co-owners have with their employees.

“It’s not beyond me to sw eep the floor with them or move airplanes. You have to show them that everyone’s got to chip in and keep it going. If they’ve got the feeling that you’re working with them and they’re not working for you, it’s a far better place to be.”

Which is not to say that the atmosphere around Air Tindi is undisciplined, pipes in Teri Arychuk. If an employee is rude to a customer, which seldom happens, they get an earful, but they’re not necessarily fired.

“In the heat of the action, when you’re going flat out, we just try to make it as good an environment to work in as possible.”

Working With Regulators
Teri Arychuk not only oversees Air Tindi operations, she sits on the Northwest Transport Association board, one of the most vocal and powerful transportation groups in Canada that gets its hackles up quickly whenever Ottawa bureaucrats appear bent on inhibiting business, instead of advancing the public good. “Any time there’s an incident or accident anywhere in the world someone figures a new rule should come with it.” In fact, says Arychuk, the safety records of northern air service companies are among the best in North America. So when Transport Canada flirted with limiting flight and duty times to 120 hours a month in the peak summer season Teri and the association pounced.

“These are float planes. We’re not flying in and out of airports in IFR conditions. It’s totally different flying with 24 hours of daylight up here in the summer time. Once we provided those facts they realized that and we got exemptions up to 150 hours by fighting this through.”

That doesn’t keep the regulators entirely at bay, however. The next big issue: external loads. Transport Canada wants to dust off an earlier regulation prohibiting float planes from carrying things like canoes tied to the pontoon. Unless these items are tied to a special kit certified by the manufacturer, it says, accidents will happen. Teri Arychuk says the statistics and safety records simply don’t support that contention.

“They’ve agreed to come up here to meet with us, which is a first, because they usually just come once a year... We try to bring them to the north to see the environment we work in. It really is quite different than sitting in an office in Ottawa.”