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Winnipeg Free Press - PRINT EDITION

Airline company looks north

Winnipeg a potential hub

By: Martin Cash

Posted: 10/27/2010 1:00 AM | Comments: 0 (including replies)

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MIKE DEAL / Winnipeg Free Press archives Mike Rodyniuk�s Exchange Income Corp. has grown by leaps and bounds.

Win some, lose some

Good and bad at the third Manitoba Outlook on Transportation:

CentrePort is in the midst of marshalling its first applicant through the Foreign Trade Zone (FTZ) regulatory process.

CentrePort also is working on a pilot project for back haul shipments to Mexico.

According to Bob Dolyniuk of the Manitoba Trucking Association, it will take a long time -- "if ever" -- for the Manitoba trucking industry to return to pre-recession profitability levels.

Overcapacity in the trucking industry has resulted in 20-to-30 per cent shrinkage in fleet sizes.

Dolyniuk says he believes there will be a windfall for the trucking industry if CentrePort's FTZ is used to its full potential.

Winnipeg's Exchange Income Corp., which operates a growing fleet of aircraft, says it has set its sights on turning Winnipeg into Canada's aviation gateway to the North.

"As Air Canada is recognized with Montreal and WestJet is to Calgary, we want Exchange and our subsidiaries to be synonymous with Winnipeg," said Mike Rodyniuk, chief operating officer of Exchange Income, which operates a stable of regional airlines -- Perimeter, Calm Air, Keewatin Airways and now Bearskin Airlines.

"We are going to build Winnipeg into an aviation gateway to the North," he said.

The recent acquisition of Bearskin Airline by Exchange Income Corp. (EIC) has increased the Winnipeg company's total aircraft fleet to 73 and EIC officials say they believe there are many benefits yet to come.

Rodyniuk addressed the third annual Manitoba Outlook on Transportation conference on Tuesday where the potential for CentrePort was the focus of the discussion and the significance of Winnipeg as an aviation gateway was almost a sidebar.

"I was a little surprised when I looked at Diane's presentation (Diane Gray, CEO of CentrePort spoke at the conference) and we were not on her slides," Rodyniuk said. "We are one of the largest entities out there."

But whereas the economic impact of CentrePort might take decades to play itself out, the presence here of the regional airlines owned by EIC is already being felt.

And there is more to come.

Since buying Perimeter in 2004 for $18.7 million, Exchange has invested about $47 million in its infrastructure across the province and the airline's earnings have increased by 600 per cent. Additional capital investment is being made across Exchange's aviation system.

One of the reasons that Exchange's creeping growth is not widely recognized may be because it flies almost exclusively into the North.

"Winnipeg is the best and shortest and most cost-effective centre to fly goods and materials and people in an out of the North," Rodyniuk said.

While Manitoba exports to the United States have been on a steady decline for the last 24 months and the high Canadian dollar will continue to apply pressure on exports to the south, developing trade routes through Churchill and servicing a growing resource sector in the North become attractive propositions.

"The North is sort of an interesting wild card," said Paul Larson, director of the University of Manitoba's Transport Institute and head of the supply chain management department. "The potential for there to be enormous growth in 10 years hinges on melting ice, infrastructure to Churchill -- there is still some talk of a roadway -- and the market on the other side of the pole."

Gray said about $12 billion is being spent upgrading the Trans-Siberian Railway, an indication of the infrastructure that is being developed for freight movement in the northern Asian markets that the Port of Churchill could one day service.

Bill Drew, executive director of Churchill Gateway Development Corp., said the current shipping season -- with three ships left to load -- is shaping up to be above average at about 660,000 tonnes in total, including 12,500 tonnes of barge and tug traffic to Nunavut.

The Hudson Bay port may be taking some time to show any dramatic growth, but the Transport Institute noted that the value of shipments out to the port increased to $155 million last year from $99 million in 2005.

The burgeoning northern mining sector and increasing sovereignty issues that will arise with the melting of the polar ice will only mean greater demand for more transportation services to the North.

"There are a lot this coming together for us," Rodyniuk said. "We think this is a smart play for Winnipeg and Manitoba, like a sleeping giant in our midst."

martin.cash@freepress.mb.ca

Republished from the Winnipeg Free Press print edition October 27, 2010 B4

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