North Saanich’s Viking Air is partnering with a Chinese company to manufacture and sell as many as 500 Twin Otter airplanes during the next two decades.
An agreement was signed today with Bejing’s Reignwood Aviation Group for the purchase of 50 Twin Otters.
With a starting price of $7 million each, the sale value from the initial deal should be at least $350 million.
This announcement is timely since Viking laid off 116 workers in April after some of its customers backed out of orders for planes and the rate of sales slowed.
Viking is a local and Canadian manufacturing success story.
The planes are manufactured in North Saanich and in Calgary. Viking is owned by Westerkirk Capital Inc., a Canadian firm, led by Sherry Brydson of Victoria.
Turboprop Twin Otters were originally built by de Havilland Canada, which produced more than 800 between 1965 and 1988.
Many remain in service. In 2007, Viking announced it would build a modernized version of the well-known workhorse aircraft.
So far, 100 orders have come in for the planes, sent to 27 countries. Last month, Viking announced it will be building a new flight-training simulator to train pilots.
This new agreement will make Reignwood the exclusive representatives for new Series 400 Twin Otters in China. Reignwood owns companies specializing in aircraft-related businesses, including airport construction, aircraft operations and maintenance, pilot training, and medical transport services.
The first deliveries will take place this year for both seaplanes and aircraft operating on land.
Viking and Reignwood will be working to find a location for a factory. While the agreement will mean planes will still be made in Canada, they will be completed and customized for specific orders in China.
David Curtis, Viking president and chief executive officer, said, “Reignwood’s world-class reputation and depth of experience in the aviation sector will give the Series 400 Twin Otter immediate traction in the Chinese market, which is anticipated to reach 500 aircraft over 20 years.”
This partnership means Viking will be able to “tap into this extensive market potential, where the seaplane segment is expected to expand rapidly over the next 10 years.”