WATCH ABOVE: Cuts in the oil patch are now trickling down to those who are dependent on the industry. Kendra Slugoski reports.
EDMONTON — With oil closing below $50 a barrel once again, many are wondering how long the slowdown in the economy will last. The impacts continue to spread. Most recently, a Northwest Territories-based airline has decided to close its Red Deer hub.
“We were losing significant money on these routes.”
Flights from the central Alberta city to Fort McMurray, Grande Prairie and Kelowna will be impacted.
“When we compare year by year, we noticed about four months ago things were sort of going off the rails; that our passenger loads were failing,” says Jim Heidema of Northwestern Air Lease. The company indicates its passenger loads are off 70 per cent and the least profitable routes were looked at closely. “From a pure business sense we should have made a decision much sooner. But there’s people involved,” Heidema tells Global News.
“We’ve just cut back. So, we’re not hiring.”
Closer to the ground, numerous trucking companies are also reporting the impacts of a slowing economy.
“We’re staying positive because like my husband said, this isn’t our first rodeo. And he’s kind of an old cowboy, so we just keep going,” says Gail McKinney of Nisku’s RAM Trucking & Logistics.
“For people that have a large overhead, it’s scary. We’ve cut the overhead down as much as possible in the past year. Maybe we knew this was coming.”
READ MORE: Alberta’s oilpatch feeling the ripple effect from low crude prices
A short drive away, waitress Linda Dugdale hears what customers are talking about, and the talk is not good.
“We’ve got a lot of business people in here and they’ve told us that lots of the companies have laid off a lot of their people.”
Dugdale describes the changes as very sudden, something she noticed about a month ago.
As business slows in the oil patch, other areas of the economy remain stable. Back in Fort Smith, NT, Jim Heidema hopes to bring several people based at Red Deer up north as flights continue for mining operations and exploration.
“We’re doing very well in the north, flying from Fort Smith through Hay River down to Edmonton. Flying direct to Edmonton. Flying north up to Yellowknife. Our charters are solid up here.”
With files from Kendra Slugoski, Global News
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