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When it comes to understanding the challenging, cyclical nature of the Canadian helicopter industry, few understand its delicate nuances like Helicopter Association of Canada (HAC) president/CEO Fred Jones.


October 27, 2014
By Matt Nicholls

When it comes to understanding the challenging, cyclical nature of the Canadian helicopter industry, few understand its delicate nuances like Helicopter Association of Canada (HAC) president/CEO Fred Jones.

CIA_ 
HAC president/CEO Fred Jones is a strong participant in career development opportunities. (Photo by Jim Stubbington)


 

Since joining the industry’s most prominent association in 2007, Jones has diligently led the advocacy charge on behalf of members, working hard to represent everything helicopter on a number of regulatory issues, the development of Best Practices, promoting the industry to various levels of government, working with the media and much more.

HAC (and the industry) has changed significantly over that time frame, with the evolution of the association’s Best Practices, an increased role amongst customers in setting and maintaining standards that exceed the regulatory requirements – which leaves existing regulatory requirements “in the dust,” Jones notes – and an increased commitment to safety on a number of important fronts.

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There are plenty of positive stories to document, and many more challenges on the horizon for both HAC and the industry. So where do we go from here? Jones shared his thoughts with Helicopters Editor Matt Nicholls prior to the industry’s annual convention in Montreal.

Q. Things are winding down on the 2014 operating season for a number of operators. What was the general consensus on how the season went?
A. It has been a lackluster season for many operators for sure. There were a few late-season fires which are still burning, especially in B.C. and the Northwest Territories. This offered some respite for some operators, but for some, it was a dismal season. The mining sector was down pretty radically, and resources generally were down – not a stellar year at all.

Q. The Canadian helicopter industry is certainly cyclical in nature due to its resource base and utility missions, the seasonal aspects. Do you see this changing as companies seek ways to diversify and will it lead to further consolidation?

A. There has been a trend in the industry to consolidation of operators, but also there has been an effort on operators to diversify and develop niche area of operations so that they are doing something that 90 per cent of other companies are not doing. It could be pinecone harvesting, specialized aerial photography . . . there are a variety of niche operations that have the benefit of differentiating one operator from another. This also evens out the troughs and crests that we see in our industry year over year.

We are not seeing many new operators springing up – rather the trend has been toward consolidation in the industry. There is already such overcapacity out there that the rates are sadly very low across the industry and it has created a race to the bottom where operators are competing on the basis of price. There are operators who are pricing their equipment below cost and that makes it very difficult in an industry where customers discriminate on price only.

Q. What is the solution to this problem?
A. When you price machines that low, it’s an act of desperation because you are just trying to generate cash flow, even if it is at the expense of the long-term viability of the company. This situation starts a chain of events that is not a happy one in the industry in terms of money that an operator may have to spend on enhancing safety, new products and discretionary spending. All of that is put off – a negative scenario all around. I know that some operators are trying to find niche areas of operation, where they have less competition and others are trying to distinguish a more costly product on the basis of quality.

Q. What would you say are the most pressing challenges operators are facing over of the next few years based on industry trends?
A. I put the issues into two categories. On a more micro level, I would have to say the flight and duty time issue is still the most important regulatory and advocacy issue facing the industry. It has been one-and-a-half years since the flight and duty time working group report was tabled and the association and its members are still primed for where this issue is going. Transport Canada (TC) just tabled some regulatory proposals. It has the potential to be catastrophic for our industry if TC moves in the direction of the working group’s recommendations. In spite of a number of dissents – and it has never happened in my 27 years of experience in Ottawa as a lobbyist – there were nine associations signed on to the same joint submission opposing to the flight and duty time working group recommendations. We are still waiting to find out where TC plans to go with this issue, and we are spinning-up our advocacy campaign if they continue to move down their current path.

Q. Why was the perspective of the Canadian helicopter industry not properly taken into account?
A. It’s partly a question of their ability to create regulations other than those, which are tailored to the airline industry. I think TC tried to create a one-size-fits-all scenario because it was just too much work to come up with something that was tailored to individual segments of the industry. Neither of the working group leaders had any experience in the helicopter industry whatsoever, so there was a lack of understanding.

Q. So, will the needs of the helicopter industry be met?
A. It’s funny, the Europeans and the Americans went through a very similar process to ours, and both jurisdictions put everyone in the same room and said let’s close the door and you guys figure out how we are going to make this work for the entire industry. Both the Europeans and the Americans came to the conclusion that “we can’t create a solution where one size fits all.”

Q. What is the timeline to have everything determined?
A. That is a question for TC. We are quite prepared to come back to the table if TC is prepared to hold a new working group which would examine a new flight and duty time regime that could work for the helicopter industry. We would do that next week if they indicated that they were open to that. However, we haven’t heard anything at all on this subject.

Q. What are some of the other issues that HAC is dealing with?
A. I refer to flight and duty times as the micro issue. The macro issue is TC itself. There are such significantly declining levels of service from TC that it is affecting the health of the industry, but it is also affecting safety. I can’t believe TC has yet to come to the conclusion that it needs to do business in a different way. Unfortunately, when they repatriated oversight for the business aviation community back to TC a few years ago, they threw the baby out with the bath water. There is some real merit to regulatory stewardship programs, there is real merit to delegation to industry. We have many years of experience in Canada with successful examples where industry can carry out tasks that were carried out by TC quite safely, quite successfully to the benefit of TC and the industry . . . Not only are they having difficulty keeping up with their core mandate, but there are a lot of initiatives that industry would like to see undertaken that would increase their efficiency, safety and more.

Every time we bring up delegation and increased responsibility to industry, TC responds by saying they are studying the issue, they are going through a reorganization and they want to see if they can make do with a different kind of inspector, they are working on implementing SMS . . . it has been years that we have been asking for this and TC has been unresponsive. This is the biggest issue, big picture – levels of service, a lack of accountability on the part of TC.

Q. Do you feel TC even understands the uniqueness and special needs of the helicopter industry in Canada?
A. There is so little helicopter expertise left inside TC and they have moved to a system where inspectors are generalists rather than specialists. Odds are you are probably getting an inspector that is not even involved in the helicopter industry and never has been. Historically, TC generally drafts regulations for the airline community, and then at some stage in the process they wake up and realize that the regulations will need to apply in a helicopter context as well – sometimes they simply don’t fit, and sometimes they don’t even “speak our language.”

There comes a point when TC will have to come to the realization that they need some help. The cutbacks they have experienced in terms of their budget are very real. In some regions, there are vacant regions because they just can’t afford to fill them and they are trying to staff them with different types of people. They are not staffing them with pilots and engineers; they are staffing them with SMS specialists who go out and audit a company but may not have any background in the helicopter industry.

Q. HAC, through its Best Practices, continues to be a strong advocate for safety in this country. What more needs to be done in Canada in order for it to hit a higher safety envelope?
A. The objective ultimately and the mantra is similar to the goal of the International Helicopter Safety Team (IHST) in the U.S. – zero accidents. That’s the goal, and all we can do is work towards that goal. Best Practices are a step in the right direction I believe, particularly since the regulatory framework has always been a blunt instrument for setting standards for the helicopter industry because they are so general, it is hard to apply standards to any given type of specialty.

fred-jones 
Fred Jones still relishes the chance to fly each season.
(Photo courtesy of HAC)


 

One of the questions I have for operators in that context is: is there any place for audit standards built around our Best Practices? Is there any place for training employees, maintenance or flight crew around our Best Practices? I need to understand if there’s an appetite for either of those things from operator members because I am not about to force a system on operators that they don’t think themselves will enhance safety, or it’s a role they don’t feel the association should be involved in.

We have always said that No. 1, TC has got to provide some real recognition that the Best Practice enhances safety and No. 2, that some recognition from a regulatory oversight perspective is necessary. It’s a big step and we will see in Montreal if operators are prepared to go down that road. But if we develop an audit standard around a Best Practice, it wouldn’t be mandatory. It could provide evidence for TC, evidence for customers, that there is an effort on the part of an operator to implement the Best Practice. I still don’t get the impression TC is prepared to extend any advantage to operators who could demonstrate that they were in compliance with a Best Practice.

Q. Fred, you are very involved in promoting the industry at the grassroots level – getting youngsters hooked on a career in helicopters. Is enough being done as an industry to promote the many industries and services it supports?
A. We are not doing enough. There are some real obstacles to the transition between the low-time helicopter pilot and a higher-time pilot. It’s a challenging problem and some operators have done this on their own. They have built a transition plan for low-time pilots. Some have forged relationships with flying schools to take some of their best graduates into their operation and have also built a phased system for bringing them up. The helicopter industry is very different from fixed wing in the experience-building process. Since we operate predominantly in a single-pilot environment, and in remote areas, it is much more difficult to learn under the direct supervision of a more experienced pilot.

There has to be a phased mechanism for transitioning low-time to experienced pilots and operators do it on an ad hoc basis – some do ferry flights for example. And we have made some efforts to try to bridge that gap, our Pilot Competencies document for wildfire operations, for example has been endorsed by most of the firefighting agencies across the country and this is a competency-based system rather than an hours based system. With a relatively low number of hours, if you have demonstrated competency in the different activities required for firefighting operations, you can conduct firefighting operations safely with less than 1,500 hours, for example.


Q. The Prospectors and Developers Association of Canada recently opened a safety dialogue with HAC, an encouraging development. How important is HAC – and industry clients, OEMs and other partners – in driving change?
A.
The involvement of our customers and industry partners adds an important dimension to the content of our Best Practices and we encourage their involvement on our committees in the development of our Best Practices; however, we need to ensure that operators can endorse the final product. Some customers will set an impractically high standard, in the context of the Canadian helicopter industry. A minimum hour-requirements for flight crews can be an imprecise measure of skill and ability, when considered against a competency-based system, for example.

Q. How important is it that OEMS and other industry partners work to drive safety in the industry?
A.
It’s absolutely essential. Everyone has a role to play in the enhancement of safety.  The OEMs are building safer and more reliable products. Naturally, the OEMs need to listen to the issues that are arising in the industry, and engage with operators in a dialogue to find solutions.

Q. HAC recently formed a working group that focuses on low-level flying, take off and landing permits. Can you talk about the importance of this group and the main crux of the issues involved?
A.
I was getting many calls from operators and members that operate from coast to coast who were getting permits for low-level flying in one region and were rejected under very similar circumstances in another region. It struck me as odd that there was no national standard for the evaluation of these applications – we are in an area of Federal Regulatory jurisdiction, after all.  This is only one example of Regional inconsistency. We had approached TC about working with us to come up with a national standard. I also thought it was a great opportunity to work together because you had inspectors who had regulatory concerns and you had operators who were doing this every day. Unfortunately, TC instead put together a working group of their own internally. At least they have agreed to consult the draft through industry however, I am concerned that now TC is “dug-in” over the draft they have produced.

Q. There has been much talk about UAVs and how they may – or may not – alter the aviation landscape in Canada. How do think UAVs will affect the operating environment?
A.
Since I arrived at the association, I said UAVs are here to stay and operators need to evolve their own business model to accommodate the use of them. It’s in their best interests, not just because they are coming and everyone acknowledges that, but because helicopter operators are in a position to capitalize on the use of this technology because they have the context, they will see the opportunities that present themselves. There will be some uses for UAVs that will eclipse the use of helicopters, but there will be other opportunities where helicopters can’t do the job. UAVs will also be operating in the same low-level air space doing the same things helicopters do, so we will have to be able to work cooperatively and safely in this environment. They will be doing things like survey operations, power line and pipeline inspection operations, so we have to make sure they are integrated into our environment.

Q. Are you happy with HAC’s progress heading over the past few years?
A. I am, but I came to realize that “Culture eats strategy for breakfast.” You can have great ideas, but in many cases, there needs to be a change in the culture of the industry to achieve that objective. A good example is Best Practices. The idea that you create a Best Practice and then transition to an audit standard over night, for example – these things don’t happen over night and it takes a number of things to fall into place. Members have got to appreciate that what you are trying to develop is not to promote one operator over another, or to favour one commercial interest over another. It’s a genuine effort to come up with what a reasonable and prudent operator is doing. If you can’t get that far, you can’t possibly reach an audit standard. And you can’t possibly get to a delegation phase, because the industry doesn’t trust what is under development. Even though it has taken years for the Best Practice initiatives to catch fire, it was an organic process that had to evolve that way. It can’t just happen quickly.

I’m really quite pleased at the number of different products we have been able to offer in recent history. And moving the conference to the fall was another change that took some time. We had a hung jury the first time we went out with a survey on the subject, so we hesitated with it and went out with another survey and it was a more persuasive response.


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