De Havilland Canada has announced that it will suspend new productions of its Dash 8-400 aircraft and Series 400 Twin Otter aircraft with immediate effect. The aircraft manufacturer has made its decision in response to reduced airline activity around the world. That said, it will continue to support existing customers.

Suspending production of the Dash 8

In an announcement made on 20th March, De Havilland has said that it will no longer continue to produce new Dash 8-400 and Series 400 Twin Otter aircraft. The manufacturer has made its decision based on a growing number of airlines cutting capacity. With this gradual network reduction and the grounding of their current fleets, it looks unlikely that any airline will be in a position to order new aircraft in the near future.

This decision means that new operations at its Downsview facility in Toronto and facilities in Victoria, British Columbia, and Calgary, Alberta will be shut down.

In a statement shared on its website, the manufacturer and its parent company said that action was taken in line with the current state of the aviation industry. However, parent company Longview Aviation Capital Corp. was positive that production would eventually make a return.

The Chief Executive of Longview Aviation Capital Corp. said in the statement:

“This is a period of considerable challenge for our industry and for our customers, and we must adapt to this new – hopefully temporary – reality..."

Mr. David Curtis continued:

“In this context, we will focus our efforts on supporting our customers’ existing in-service fleets and delivering the other services our companies provide to the global aviation industry. We will remain in close contact with our customers and continue to monitor the evolving situation. We will make further adjustments to our operations as required.”

Who will this decision affect?

Regrettably, the decision to suspend operations will have a knock-on effect for De Havilland staff as well as for Viking Air Limited who operates under the same parent organization. De Havilland is expecting the decision to cut jobs for around 65% of its staff. In a similar vein, Viking Air is expecting 40% of its workforce to be affected.

However, this decision goes deeper than just employees on the production line. What effect will this have on airlines?

At the moment, the answer to that question is a bit unclear. Longview Aviation Capital Corp. and its De Havilland brand make a point of saying that this suspension only applies to new aircraft production. However, such a statement does not make it plainly obvious if currently unfulfilled orders would be made. Back in November, De Havilland garnered a number of orders at the Dubai Air Show for the Dash 8-400 turboprop. Among those who placed orders are Palma Holding Ltd. and ACIA Aero Capital Ltd. If these orders have not yet been fulfilled, will their production continue?

We contacted De Havilland about this but it was unavailable for comment at the time of publication.

That said, whether production on these orders continues or not, it's apparent that the demand for them is not there at this time.

Is there a silver lining?

Noticeably, the good news in all of this: De Havilland is not shutting down its operation entirely. It says that it will continue with maintenance work to support existing customers. This will keep some form of cash flow and some employees at work.

What's more, the manufacturer has not resorted to the rhetoric of doom and gloom. It says that it is hopeful for a return if favorable conditions within the industry are met. Furthermore, it's created a strategy for business continuity which will allow it to bounce back from the current decision.

What do you make of this story? Let us know your thoughts in the comments.