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This is a great time to be in the utility helicopter services market. Thanks to demand from expanding sectors such as oil & gas, mining and firefighting, Canadian utility helicopter operators are busier than they’ve ever been.


June 8, 2007
By James Careless

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This is a great time to be in the utility helicopter services market.
Thanks to demand from expanding sectors such as oil & gas, mining
and firefighting, Canadian utility helicopter operators are busier than
they’ve ever been. But this silver lining comes with a cloud attached;
an ongoing shortage of pilots qualified to fly challenging utility
helicopter missions.


TIMES ARE GOOD

The
reason Canada’s utility helicopters are busy is because the industry
has all kinds of customers who are clamouring for utility helicopter
flights, and helicopters are in short supply. We spoke with three
operators in particular, who shared their views on the successes and
challenges of working in the utility helicopter industry.

“There’s
a lot of capacity being used by the oil & gas and minerals
industries,” says Paul Spring, president of Phoenix Heli-Flight in Fort
McMurray, AB. Phoenix is an all-Eurocopter operation with AS240BAs,
AS350B2s, EC120Bs, and EC130B4s in its fleet. “There’s also lots of
contracts for fighting the pine beetle in the west,” Spring adds. “All
of this is keeping us very busy.”

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“Forest fire suppression, oil
& gas exploration, power line construction, aerial surveys and
tourism are all strong markets for us,” says Adam Bembridge, president
of Great Slave Helicopters in Yellowknife, NWT Great Slave flies the
Bell 204B, 205 A+1, and 212/212HP; the Eurocopter AS350, AS350BA,
AS350B1, AS350B2, AS350B3, EC120B and EC130B4; and the MD500. “These
are very busy times,” Bembridge says.

In Northern Ontario, it’s
the mining industry that’s driving the boom, says Jeff Beaudoin,
general manager of Gateway Helicopters in North Bay. Gateway flies the
Schweizer 300C and 300CBi; the Bell 204B, 206 LongRanger and 206
JetRanger; and the Eurocopter AS350B1 and AS350B2. “The increase in
mining is driving all kinds of traffic, especially moving drills from
site to site using long lines,” Beaudoin explains. “There’s also a lot
of geophysical surveys being conducted, with helicopters being employed
to move prospecting personnel in and out of remote sites.”

In a
perfect world, a booming market would be nothing but good news for
helicopter operators. But this is the real world where success goes
hand-in-hand with hassles.

In this real world, “It’s hard to
find pilots that are competent to fly a wide range of utility missions
like long-lining,” says Spring. “A lot of the older guys are retiring
or only working seasonally.” “One of the biggest challenges is
recruiting qualified pilots and engineers,” echoes Beaudoin. “There’s a
whole slew of experienced people who are retiring, and there just
aren’t enough new pilots and engineers available to replace these guys.
It’s a problem that is only made worse by the current strong demand for
utility helicopter services. We need people with the experience and
talent to manage complex tasks like longlining and firefighting. With
the pros retiring, we’re fighting back by investing a lot more in
training and upgrading the pilots we already have, and in fostering new
talent as well.”

Fortunately, many utility helicopter companies
operate flight schools, providing them with a source of new blood. This
is certainly the case at Gateway: “We hire our best graduates and bring
them up through the ranks,” says Beaudoin. “Typically, they begin by
flying sightseeing missions for one or two years, because these are
low-risk flights that help them accumulate hours and experience.”

Because
it takes time to break in new pilots, and to train them for complex
utility tasks such as long-lining, this approach isn’t a quick fix to
the ongoing pilot shortage. However, over time it should resolve the
shortage of pilots.

Pilots are not the only item in short
supply; so are helicopters. “If you plunk down your deposit today, you
could wait 24 to 36 months before your new helicopter is delivered,”
says Spring. “This long lead time makes it very hard to draw up a
business plan. By the time your aircraft is delivered, the market could
have changed drastically.” Meanwhile, used helicopters are commanding
strong prices, making it harder for small operators to expand without
going deeply into debt.

If this isn’t enough to deal with,
“we’re seeing an increase in demand from the big oil companies like
Imperial Oil, Exxon and Shell for twin-engine helicopters that are
Category A capable,” Spring adds. “They are also asking for higher and
higher qualifications from pilots.” Higher insurance premiums are one
factor driving these demands, says Spring. However, he also believes
that oil companies’ loss management groups see helicopter transport as
a risk, and are taking these steps in an effort to reduce this
perceived risk. “They’ve made up their minds that this is how they’re
going to fix these problems, by asking more of us. They’re now looking
for utility helicopter operators who can meet these new requirements.
You either play ball with them to retain their business, or you don’t
and lose it.”

While big oil companies are asking more from
utility helicopter operators, they are at the same time, trying push
prices back to what they were 3-5 years ago. To cope with this,
helicopter operators have to be creative in how they manage their own
costs and fleet maintenance because they don’t want to compromise on
keeping their aircraft in top shape.

Safety is another big
concern for utility helicopter operators. After the Transportation
Safety Board ruled that the 2003 crash in Alberta of Delta Helicopters’
Bell 204B C-GTNP was due to the helicopter “being operated at a weight
that exceeded the maximum out-of ground- effect hover weight,” utility
operators have become more vigilant about weight and load balancing.
“In the past there were some rather cavalier attitudes toward the
loading and tasking of aircraft,” Spring says. “But after the TSB’s
findings in the crash of C-GTNP, that’s all changed.”

Utility
helicopter operators have a lot to deal with, all while trying to meet
the demands of their many clients. It’s not an easy task, but it is
certainly preferable to trying to survive in lean times.

LOOKING AHEAD

Despite
all of these concerns, Canada’s utility helicopter industry is well
positioned for prosperity. That’s because the clients who use its
services are likely to stay financially healthy for a long, long time.

“The
future looks very promising,” says Beaudoin. “Of course, you never know
how long things like the current mining boom will last, but I believe
the utility helicopter industry could be very busy for the next five
years.”

For pilots looking to move up, the utility helicopter
sector is worth a careful look. Granted, the work is tough and the
flying conditions can be very demanding – whether over the High Arctic
or at sea – but with this challenge comes a great deal of professional
satisfaction. Besides, this is a good time to get in on the ground
floor, as experienced pilots retire and operators scramble to replace
them. In the utility helicopter sector, good help is hard to find.


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