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Forecasting the Future

July 18, 2011  By Matt Nicholls

The sun rarely shines on Canada’s left coast in the early spring, but key industry leaders shared a sunny forecast for select segments of Canada’s helicopter industry during Helicopters magazines’ first annual industry roundtable.

The sun rarely shines on Canada’s left coast in the early spring, but key industry leaders shared a sunny forecast for select segments of Canada’s helicopter industry during Helicopters magazines’ first annual industry roundtable.

The economy was just one of the topics covered by the roundtable panel.
(Photo by Paul Dixon)


The invitation-only event held during the Helicopter Association of Canada’s annual general meeting March 26 in Vancouver brought together seven industry leaders – including HAC president/CEO Fred Jones – for a thought-provoking hour-and-a-half discussion.

Our “super seven” panel tackled a number of key issues ranging from the effects of a moribund economy to the looming AME and pilot shortages to the impact of Unmanned Aerial Vehicles (UAVS) on the Canadian helicopter landscape. Panellists represented a wide cross-section of industry segments and experience levels, bringing a unique perspective to the discussion. When the dust had settled, Panorama Helicopters’ operation manager Jimmy Emond summed it up rather succinctly: “We certainly covered a lot of ground.” Indeed we did.
In the first of our two-part roundtable coverage, the panel looks at how operators have weathered the economic storm, what signs of growth are in the offing, the importance of keeping safety standards high and navigating the often challenging relationship with Transport Canada. For more coverage on the event, please see our video segments at www.helicoptersmagazine.com .


Economic Realities: Varying Perspectives
Canadian helicopter operators have been faced with myriad challenges over the past two years due to a stagnant economy, and one of the key discussion questions was “how has your organization weathered the storm – still profitable, productive and strong?” Are the tables starting to turn?

Terry Jones (left) listens as Bob Toews discusses the STARS safety philosophy. (Photo by Paul Dixon)


STARS senior pilot Bob Toews offered an encouraging perspective from his firm, one of Canada’s leading medical transport operators. The Alberta-based not-for-profit organization is riding a wave of success that includes adding two new AgustaWestland AW-139s to its fleet and expanding services into Saskatchewan. The province is investing $5 million in the initiative in 2011-12 and an estimated $10 million annually in future years. The remainder of the estimated costs of developing and operating the service will come from STARS fundraising and from contributions from the community and the corporate sector, including $5 million from lead donor Crescent Point Energy.

“Things are going very well for us at STARS and we have weathered the last downturn very well, not without challenges though,” Toews said. “In Alberta and here in B.C., I’ve been actively lobbying to expand in B.C., and there have been some significant challenges at the health-care level, some significant rationalization of costs. But that cuts both ways for the helicopter medical transport business. Money is tighter in terms of how they allocate it within their various priorities. However, because of changing demographics and the closure of rural hospitals, there’s increased need for effective transport solutions. So, the helicopter industry is doing fairly well across the country in responding to that need, so these aren’t bad times for us.”

Like STARs, Canadian Helicopters has done well in the downturn, says vice-president of safety and quality Walter Heneghan. The country’s largest helicopter operator was fortunate over the past couple of years due to corporate restructuring. When Canadian split from CHC in 2006, new company management started to rationalize operations and make a number of cuts to bases, equipment and people even when the economy was growing.

“So when the industry went into recession, we got away with only laying off 10 per cent of our workforce,” says Heneghan. “That, coupled with a fortuitous decision to expand our horizons overseas, has really helped. As you know, Canadian is a public company, so our bottom line is open for all to see, but we had a very successful 2010 and that was buttressed by our decision to work with the U.S. Department of Defense in Afghanistan in 2009.”

John Bosomworth, chief pilot at Ontario’s Hydro One, says the economic downturn had little impact at his firm. The company’s five bases and nine-helicopter fleet are constantly busy servicing the thousands of kilometres of hydro lines that traverse Canada’s second largest province – and that won’t change anytime soon.

“We’ve seen some financial restraints and such but we still have this large commitment to the province to keep the lights on and it requires pretty much the same amount of effort as last year, and the year before,” says Bosomworth. “We still have a pretty reasonable work program; it doesn’t seem to be changing.”

Jimmy Emond, John Bosomworth and Paul Bergeron discuss the challenges of working with Transport Canada. (Photo by Paul Dixon)


Panorama’s Emond said his company’s fleet based out of Alma, Que., should be kept busier this year due to increased mining exploits in the northern part of the province, renewed forestry projects, and firefighting and government opportunities. “But the problem in Quebec at this time is there are a lot of machines there,” he said. “And with the safety requirements from the big mining companies, it makes it expensive. We are just straight on the line and trying to make everything work.”

Since 1959, Highland Helicopters Ltd. has operated bases in Alberta, B.C. and the Northwest Territories, offering services in forestry, oil and gas, mining and exploration, resource management, and aerial media work. With more than 40 light and medium helicopters in its fleet, the company prides itself on offering the highest operating standards possible. Keeping standards high in an economic downturn is always challenging Terry Jones maintains, and he is pleased his firm has been able to hold the line with few layoffs – despite declining revenue hours over the past three years. Like other panelists, Jones sees signs of optimism in the market. For example, he attended a major mining conference earlier in the year in Vancouver and reports there was enthusiasm, excitement, a lot higher attendance. “There were people there with money to invest,” he said.

“Forestry is also looking up, there are mills opening again, but there’s a long way to go in that area,” he said. “If the oil and gas sector, the seismic activity that was referred to in the oil and gas committee meeting, materializes, certainly with the activity in the Middle East, the pressures on oil prices are going to augur well for the Canadian industry in general. And oil and gas is about 40 per cent of our market. So, overall, it’s been rough, but we’re optimistic about how things are looking.”

As president of a helicopter training school, Paul Bergeron has a unique perspective when viewing economic cycles. Flight training is very dependent on the economy and, as the head of Springbank, Alta.-based Mountain View Helicopters, he knows all too well that when the economy is good, people have extra money; they want to take flight training. When it’s bad, it makes for a very long year. Last year was the company’s slowest in its 15-year history, as numbers were down some 50 per cent.

“But we don’t feel that bad about it because we don’t want to be training a bunch of pilots to go into an industry where there’s no work,” Bergeron said. “Our goal at Mountain View is to train people and get them jobs and when the industry is hurting we have difficulty placing these people. We’d like to have as many students as we can, but we also have a conscience – we don’t want to take people’s money and not ensure we can help them get a career.”

Bergeron said the school has a good roster of students now and things are looking promising for the fall. “We’re kind of weathering it. We’ve had to shorten up some of our staff, cut my AMO basically in half, but luckily they are skilled individuals and they found work elsewhere,” he said. “We’re keeping our fingers crossed things will keep happening and we’ll be able to place people in jobs that are coming available.”

Helicopter Association of Canada president Fred Jones said there’s no way to sugar coat the effect the economy has had on many operations. “It has been a difficult couple of years and we’re not out of the woods yet,” he said. “But I think most operators have done what’s prudent under the circumstances. In a difficult economic environment, they’ve reined in costs and behaved more conservatively from a business perspective.”

A Safe Approach: SMS
Despite watching costs, maintaining high safety standards remains paramount. Panellists were quick to point out safety is the No. 1 priority, and the implementation of a Safety Management System (SMS) is a key step in the process.

Consistent enforcement of regulations remains a hot issue, the roundtable panellists contend. (Photo by Paul Dixon


“My company and I are both in our 51st year in the industry this year and I don’t think I’ve seen a single development that has had more positive an impact than the implementation of SMS,” said Terry Jones. “Other industries have had standards for ages and why the aviation industry has been so long in getting around to seriously addressing SMS is beyond my comprehension. But nonetheless, from the economic side of it, we’ve been moving ahead by leaps and bounds with SMS.”

Highland has faced challenges in implementing its program but they’ve borne the costs because there was no way of avoiding them. “It hasn’t been an impediment in any way other than it shortens funds available for other pet projects,” he said.

Hydro One has an extensive in-house SMS program and chief pilot Bosomworth contends it remains a high priority. Having strong buy-in from upper management is essential. “It’s an excellent system we have and there’s no compromising on that; we’re fortunate that our company recognizes that, too.”

While Panorama is firmly on board and has its own SMS in place, Emond contends smaller operators may have a challenge coming up to speed due to cost restrictions. He maintains many clients only work with operators with an SMS, so you don’t want to be left holding the bag.

“The system is good, but I think they pushed the SMS program too rapidly for a little air carrier,” Emond said. “I imagine for someone who has only two machines, for example, it’s very, very difficult [to implement a program]. It’s a very big structure for a small operation.”

From HAC’s perspective, the challenge with SMS is two dimensional, said Fred Jones. One dimension is that the smallest operators seem to be having the most difficulty implementing because the system was designed for implementation in a larger operation. The promise of SMS has been that it’s scalable for small operations, but it’s more difficult in practice than it was in theory. The other is that the implementation date is constantly moving off, and it’s moved again until 2012.

“I know there are issues inside Transport Canada with culture and getting the culture change with inspectors, but, I think we’re at a stage where the credibility of the process is being affected by the constantly moving implementation dates taking place,” he said. “And like many other things TC does, frequently the systems are built for large operators and the small operators are an afterthought about how it’s actually going to work in a small operation.”

Toews concurred, adding the main issue is scalability. “STARS is a small operation and the difficulty of adapting to SMS and implementing the kind of standards TC is looking for isn’t just a matter of throwing more money at it. It’s getting the personnel in house that can set the time aside to do it – and we’re really seeing this on the maintenance side because that’s where we’ve been challenged first.”
STARS has been forced to find ways to break management’s attention so it’s basically re-engineered its whole maintenance control system, so it can successfully meet the audit requirements, he said.

“It’s a good thing in the long haul, but in the short run, it certainly is challenging,” he said. “The danger has been, and I guess from a pilot’s standpoint, is there have been things falling through the cracks in terms of day-to-day operational maintenance because we’ve been distracted by some of these other tasks. I’m sure that will correct itself in the long term, but it’s a concern for our operation in terms of maintaining a high safety standard at the time we’re transferring to a new paradigm.”

Relationship Building
When discussing SMS implementation, panellists uncovered another challenging issue with long-reaching tentacles: working with TC. It’s a conundrum some operators have on many levels, and one that generated plenty of feedback from the group.

Roundtable panellists from left: Terry Jones, Highland Helicopters; Jimmy Emond, Panorama Helicopters; Matt Nicholls, Editor, Helicopters magazine; Paul Bergeron, Mountain View Helicopters; Bob Toews, STARS; Fred Jones, HAC; Walter Heneghan, Canadian Helicopters. Missing: John Bosomworth, Hydro One.


Terry Jones said his biggest issue is regional disparity and the interpretation of regulations. There are several cases on the table right how, he explained, where the interpretation of regulations is different. And that can be troublesome to understand when you work for a company that works out of two primary regions: the northern prairies, and city environments such as Edmonton and Vancouver. “To have the regulations interpreted differently by two regions, and one company have to deal with those different regions, it’s ridiculous,” Jones said.

Heneghan concurred. “I feel your pain, Terry. We operate in six regions and it’s tremendously frustrating. And a large part of our frustration is CARS have been around since 1996 and they’ve been interpreted a certain way, and there seems, in the past two years, that some of the interpretations have changed. The language hasn’t changed but the interpretations have changed. That doesn’t seem fair to the operators.”

 The regional disparity issue is one HAC is very sensitive to as well, Fred Jones added. When the association hears from individual members problems about interpretation in one region and discovers that it’s being interpreted differently in another region, or a couple of different regions, that creates problems.

“On some of the issues that have arisen we’ve been able to work with Transport Canada and resolve them, but they still tend to be a huge and costly distraction for industry and the association,” said Fred Jones. “They seem to be dealing with issues on a tactical basis by the department. When a problem arises, they’re trying to fix it rather than having a system in place that ensures all of the regions can interpret it in an identical way. We are an area of federal jurisdiction and there’s no reason why you shouldn’t be able to cross regions and have the same interpretation apply.”

The other problem for operators, he contended, is the level of service. The impression seems to be that TC has retreated in some ways from the SMS principles that were articulated a few years ago. At a time when more and more responsibility is being shifted to industry to manage its own safety and mitigate risks in its own operations, there is a situation where less and less responsibility, or less and less authority, is being given to operators to actually accomplish that in a flexible way.

“It’s put us in a very awkward position, “Fred Jones said. “We all appreciate the safety benefits of SMS. We understand that, and many operators are well along the way or have implemented SMS. But part of the problem of SMS was a little bit more flexibility based on risk management principles and the opportunity to make those changes that just hasn’t materialized for industry.”

And the solution? “I don’t see any other way but to become more engaged with industry through the association, and to look to industry to help develop the safety standards,” he said.

The good news is, there are examples of TC and members of the industry working well together to implement positive change. The NVIS working group led by Toews is a shining example of what’s possible. TC’s Stephane Demers and Rob Freeman have worked closely with HAC committee members in laying the groundwork for the development of NVIS regulations for operators. The fruits of their labour are to be revealed in the coming months.

“NVIS is one where Transport has engaged with us – and it’s a very promising example of how the system can work,” said Fred Jones. “But the short answer is, the only way out of this, and to leave something on the table for operators in the way of efficiency gains, is to capitalize on the experience in our industry. When faced with a declining level of experience inside the department, you need to turn to the people with the experience to help develop standards and regulations that will guide our conduct and help mould our regulatory environment in the years going forward. TC just doesn’t have the horsepower anymore to do it all themselves – or the expertise.”

This is Part 1 of Helicopters’ first industry roundtable. Stay tuned for Part 2 in the Oct/Nov/Dec issue, where we explore more issues, including call and duty times, training and worker retention, UAVs, and more!

The Super Seven
Paul Bergeron
Role: President, Mountain View Helicopters Flight School Location: Springbank, Alta. Fleet: Three R-22s, two R-44s Details: Operates seasonal base outside Drumhiller, Atla., to bring graduates out to build time

John Bosomworth
Role: Chief Pilot, Hydro One (Ontario) Location: Five bases across Ontario Fleet: Nine helicopters Details: Organization has been in operation 62 years, maintains 150,000 km of power lines

Jimmy Emond
Role: Operations Manager, Panorama Helicopters Location: Alma, Que. Fleet: 12 medium helicopters, primarily A-Stars Details: Concentrates a significant portion of operations on mining and government contracts

Walter Heneghan
Role: Vice-president Safety and Quality, Canadian Helicopters Location: Edmonton Fleet: Canada’s largest operator, 140 aircraft, 35 base locations Details: Has diversified operations with two international bases, large operation in Afghanistan

p19_PDD_1028Fred Jones
Role: President/CEO, Helicopter Association of Canada Location: Ottawa Details: Association represents 80 per cent of civil helicopters in Canada, operated by HAC members, 130 operator members, 120 associate members

p19_PDD_1031Terry Jones
Role: Operations Manager, Highland Helicopters Location: Vancouver Fleet: 42 Bell 206 series and AS350 series Details: Boasts 20 bases across Alberta, B.C. and Northwest Territories

p19_PDD_1029Bob Toews
Role: Senior Pilot, STARS air medical transport
Location: Calgary, three other bases Fleet: BK-117 aircraft; two AW-139s on order Details: Chair IFR committee, HAC; Chair ICAO EMS study group (international standards for EMS operation)


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