Manitoba says it's going to save money on general air transportation in a newly signed contract handing the services over to the private sector.

The province entered into a five-year contract with Winnipeg-based Exchange Income Corporation (EIC) at $4.2 million per year, the province announced in a news release Thursday.

It comes after the province issued a request for proposals seeking a contractor for the service in 2018. The deal will save the province $1.3 million annually, the release says.

It follows the privatization of the province's wildfire-fighting service and controversy over the proposed privatization of its air ambulance services.

"Our government is committed to public safety above all, and this agreement ensures that safer service is accomplished at a lower cost for Manitobans," Infrastructure Minister Ron Schuler said in the release.

Schuler says the agreement will also reduce the number of times when court dates in northern communities are rescheduled or cancelled due to problems with flights to get staff or accused individuals to the courts.

In the past, the province's general air transportation needs were fulfilled by private carriers 97 per cent of the time, according to the release. But Schuler says in the release there were no set rates or service standards, so flights could be cancelled or rescheduled with little notice.

EIC has hangars and aircraft throughout the province, Schuler says, operating under carriers such as Bearskin Lake Air Service, Calm Air, Custom Helicopters, Keewatin Air, and Perimeter Aviation.

Former Progressive Conservative premier Gary Filmon, husband of Lt.-Gov. Janice Filmon, is the chair of EIC's board.

Kinew voices concern

Manitoba NDP Leader Wab Kinew says he's not surprised by the contract, but is concerned.

"They just awarded a multi-million dollar contract to a company that has a ton of overlap with the PC party of Manitoba," Kinew said. "I'm looking at the scene in our province and so many people in the public sector — nurses, teachers — everyone else in the province is getting cuts and wage freezes except of course a well-connected firm who apparently is getting millions of dollars from Pallister.

"So, to me, this is the sort of thing that makes people feel like the system is rigged."

The company is required by the contract to follow a "strict reporting structure," the province says, including daily, weekly and monthly reporting to the government.

A request for proposals is still underway for air ambulance services.