The Fall and Rise of Harbour Air
Harbour Air's conversion to zero-emission electric motors was possible because its scheduled routes are short enough to be handled by existing battery technologies. It also helped that all the aircraft types in Harbour's fleet could be re-fitted with the same engine type. [2] Australia's MagniX had recently debuted just such an electric motor - the 750 shp magni500. The first Harbour Air type to receive the new electric motors were the radial-engined DHC-2 Beavers. Conversion work was done on a rotational basis by Viking Air Ltd of Victoria, BC.
Conversion work went smoothly and, once flight and maintenance personnel were thoroughly familiar with the new propulsion system, the fleet gained an even better reputation for reliability. Harbour Air's wider-scale business was another matter. In late 2020, CEO Greg McDougall committed to a joint-venture deal with Chinese partners in Anhui province. The goal was to establish a new, shared-ownership floatplane service - Shixin Air - flying from Wushan city (on the Yangtse) to Dajiu Lake national wetland park in Hubei Province. The fleet was to be made up of MagniX-powered Cessna Caravans on floats. Harbour Air was to provide the business model and technical expertise. The trouble started almost from the outset.
Harbour Air's experience was based entirely on the use of de Havilland Canada airframes. The company had no practical knowledge of the Cessna Caravan. Nor was Harbour in a position to loan high-time floatplane pilots to this joint-venture. Instead, the Chinese partners, Zongshen Group, embarked upon a large-scale but somewhat undiscerning hiring campaign of foreign pilots. That, combined with floatplane operations in often foggy conditions, was a recipe for disaster. Poor flying conditions quickly gained Shixin Air a reputation for unreliable scheduling. A string of high-profile accidents added to the joint-ventures woes.
The Huangshan mountains which surround Dajiu Lake are also known as Yunhai - the Sea of Clouds. This didn't augur well for a floatplane based airline. In the first two months of operations, Shixin Air suffered three major accidents. The first involved an e-Caravan which struck floating debris in Wushan harbour. With a holed pontoon, the aircraft partially sunk but all passengers and crew were rescued. The first fatal crash came when a turbine Caravan flipped over landing on Dajiu Lake in low-lying mist, killing two passengers. Worse was to follow when an e-Caravan flew into Yanziya Mountain in heavy fog with the loss of all aboard. Soon, potential customers who could have been flying into the lakeside casinos were avoiding Shixin Air in droves.
Harbour Air CEO Greg McDougall saw Shixin Air as another potential victory in his 'zero-emissions' drive. Instead, Zongshen Group proved far more interested in marketing electric motorcycles than in performing e-Caravan conversions. Most of the Shixin Air retained their noisy PT6A turboprops. Passengers drawn in by the airline's promises of near-silent flight were often disappointed. Zuo Zongshen made multiple promises to rectify the 'electrification' short-fall but no real progress was ever made. The shuttering of Shixin Air was all but inevitable.
Back in British Columbia, Harbour Air's 'electrified' fleet was a technical and commerical success. And all 12 of the company's BC routes were highly profitable. However, the ill-considered joint-venture in China threatened to tow Harbour under. In early 2021, Harbour Air went into receivership. By May, the Government of British Columbia had stepped in and dissolved the company. Creditors were satisfied while an interim board of directors ran a revised Harbour Air (BC) Ltd with the same staff and fleet. In the Summer of 2021, Harbour Air was privatized once more when the floatplane operation was bought by the owners of HeliJet International.
In the aftermath, and as inheritors of Harbour Air's debts, the Government of British Columbia launched suits against the Zongshen Group Co. Ltd. and Zuo Zongshen personally. When the Supreme Court of British Columbia found in favour of the Province, appeals took these cases to the Supreme Court of Canada. The results were the same but were protested through diplomatic channels by the People's Republic of China. Unwilling to go directly against Beijing, Ottawa dragged out negotiations. Other than withdrawing some of its assets from Canada, [1] the Zongshen Group made no moves to settle. Zuo Zongshen admitted no wrong-doing but did surrender his 49% shares in Harbour Air. [2] The Government of BC would later place liens on this 500 acre property on Bowen Island.
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[1] These included reneging on an 2016 agreement with ELIX Wireless on EV charging systems and shutting down Zongshen Group's Vancouver-based Canadian subsidiary. China-based Zongshen PEM (Canada) Chongqing Hydrogen Energy Ltd also changed its name.
[2] Zuo Zongshen's share of Harbour Air is a little puzzling. A year after his purchase, the GoC 'relaxed' its limit on foreign investment in Canadian airlines. That limit is now 49% but no single investor - like Zuo Zongshen - is permitted to own more than 25% of a Canadian airline.