Small, Yet Passionate

By all accounts, the Canadian corporate helicopter market is small. However, industry sources disagree on the exact number of corporate helicopters in the country. Estimates seem to depend upon whether they are calculated based on the aircraft’s end mission or its registration data.

However, there is agreement about the people who own and operate corporate helicopters in Canada: they are passionate about flying. In fact, passion is generally the reason these people purchased corporate helicopters in the first place.

Putting the Pieces Together

Understanding the Canadian corporate helicopter market is a bit like assembling a puzzle. To obtain a complete picture, you need to put the pieces together.

Consider: Percentage-wise, the Canadian corporate helicopter market is significantly smaller than those of other developed countries.

“About six per cent of the turbine market here is dedicated to corporate usage,” said Guillaume Leprince, VP sales and marketing with Eurocopter Canada. “That compares to a 20 per cent penetration for corporate use in other countries.”

Consider: The corporate helicopter market is not as healthy as it used to be in Canada – and it used to be very healthy.

“The corporate Canadian helicopter market began to see rapid growth between the years 2003 and 2008, with deliveries increasing by 330 per cent over that time period,” explained Chuck Evans, Bell Helicopter’s managing director of commercial marketing. “This growth was driven by the stronger Canadian dollar, low interest rates, bargain prices for entry-level helicopters, and the many used Bell 206s that were up for sale.”

Once the recession hit, things changed. In fact, “Deliveries have decreased dramatically from 2009 to today, primarily due to the global economic downturn,” Evans told Canadian Skies. “It is believed that orders will begin a return to pre-recession levels in the second half of this year, but the forecast is partially dependent on how the European debt crisis plays out over the coming weeks.”

Bob Dengler is a retired mining engineer and private helicopter owner-operator who currently flies a Bell 429. “I keep my 429 at National Heliport in Bolton, Ont., in the summer, and at Vertical Aviation in Scottsdale, Ariz., in the winter,” he said.

Dengler spends a lot of time flying and talking with other helicopter owner-operators. He also stays on top of industry developments by attending the last two Helicopter Association International (HAI) conventions.

What is his take on the corporate helicopter market? “I feel the doom and gloom of the last few years is slowly changing,” he said. “Most people I talk to are focusing on maintenance, and new purchases are slowly starting to happen.”

Consider: The Canadian corporate helicopter market is split between piston and turbine models; the latter class includes both single- and twin-engine helicopters.

In general, “piston-engine helicopters are favoured by corporate operators in Canada,” said Bell Helicopters’ Chuck Evans. Apparently, their prevalence is largely due to economics, with pistons costing less than turbines. “Corporate aircraft operators place great importance on aircraft acquisition price and direct operating cost,” Evans noted.

On the piston side, the market is dominated by Robinson R22s and R44s. “Almost every new [helicopter] pilot in Canada learns to fly on an R22,” said Oliver St-Denis. He is executive vice president of business development with Laboratoire Riva in Blainville, Que.; and a helicopter pilot who logs 100 hours annually (now in a Eurocopter EC130 B4). “Meanwhile, the R44 costs about the same as a sports car or a big speedboat, so it is affordable for a lo t of people,” he said.

The turbine side of the Canadian corporate helicopter market is far more diverse, in terms of the makes and models of helicopters flown.

“The top-selling corporate turbine aircraft in Canada is the Bell 206 Jet Ranger, which is ideally suited for this role, thanks to its affordability and outstanding performance characteristics,” said Evans. “The second and third most popular models in this segment are the Bell 407 and the Eurocopter EC120, respectively.”

Eurocopter figures heavily in the Canadian corporate turbine market, with its single-engine EC120 and AStar 350, and the twin-engine EC130 B4 and EC135 being among its most popular models. Other players include AgustaWestland with its AW119 single-engine and AW109/AW139
twin-engine helicopters; and Sikorsky with its S-76 twin turbine platform.

“From a corporate standpoint, the higher-end helicopters seem to be the more popular; such as the AW119 Koala, the AW109 Grand, Bell 429, and Eurocopter EC135,” said Justin King, charter sales and service supervisor with Toronto’s Chartright Air Group. “Their size, comfort, speed and reliability make them a more desired choice of corporate helicopter, over some of the smaller single-engine helicopters in the market.”

Who’s Flying and Why

When it comes to Canadian corporate helicopters, operators are split between two groups. The first is comprised of corporate owner-operators who are also pilots themselves. The second group is equally enthusiastic, but they prefer to let someone else do the flying.

“I would estimate that the split between these groups is about 70/30,” said Hoss Golanbari. He is vice president of Canadian operations for Eurotec Vertical Flight Solutions, a global provider of Eurocopter support services headquartered in Eudora, Kansas. “The majority are people who can pilot their own helicopter.”

“Unlike the oil and gas and EMS segments, the vast majority of corporate [rotary] aircraft are directly owned and operated by their users,” confirmed Chuck Evans. The remainder includes “a handful of small transportation service providers that typically own only one or two aircraft.”

Eurocopter’s Leprince agreed. “The main drivers for sales are people who are owner-operators, rather than the U.S. model of buying aircraft for use by the entire corporation,” he said. “In many ways, the market is more focused on recreational than professional use.”

A personal passion for flying is at the heart of most Canadian corporate helicopter sales. People buy helicopters because they think it would be great to own one. Those who can afford to – once they get over the sticker shock – look for ways to offset the purchase price and operating expenses by tying their usage into business as well as pleasure.

“You also can’t discount the value of peer pressure,” said Dan Munro. He is president of National Helicopters, a full-service helicopter flight and maintenance company based in Kleinburg, Ont. “When one executive gets his own helicopter, and his business associates find out, many of them respond by buying their own helicopters, too.”

Fortunately, it is easy to make a business case for corporate helicopter usage. In particular, helicopters are an effective alternative to ground transportation; especially as Canada’s roads become increasingly congested.

“Business use is often a commute between home and office, or between cottage and office,” Evans said. “Many owners have multiple business sites and they use the helicopter as an effective travel tool for themselves and their employees. They are also used for annual hunting and fishing trips, often with clients.”

So why do Canadian corporations shy away from corporate helicopters?

American corporations buy helicopters as dedicated transportation vehicles; something that is rarely done in Canada. Why is there such a difference between the two countries, when they have so many other practices in common?

There are three answers to this question, and all of them are equally valid.

The first reason is Canada’s business culture. In contrast to the United States – where corporate aircraft are seen as a mark of success and status – Canadian firms tend to view such items as “expensive toys, for lack of a better term,” said National’s Dan Munro. “Fortunately, this attitude has been changing over the past five or six years, as corporations grasp the time saved by moving executives quickly and efficiently.”

The second reason Canadian corporations stay away from helicopter purchases has to do with geography. In the United States, the historic pattern of settlement and population density means that there are many major cities close to each other; particularly on the Atlantic Seaboard.

“As a result, it makes sense for U.S. companies to have their own helicopters, because it allows their executives to move quickly between New York, Boston, Washington, and a host of other major centres,” said Munro. “In contrast, Canada has far fewer cities, and hence far fewer reasons to travel. And once you get out of the Toronto-Montreal corridor, those cities are much further apart – with distances better suited to fixed-wing aircraft.”

The third factor limiting the use of corporate helicopters in Canada is the relative scarcity of heliports available for commercial use. Compared to other developed nations, there aren’t many around.

“Because of this, it minimizes our available landing locations, especially around built-up areas,” said Justin King of Chartright. “In other areas around the world – the United States, South America and Europe – most major cities are built with a number of heliports or helipads that make helicopters a faster and more practical option for business travellers.”

As for just landing a helicopter wherever it is convenient? In rural areas and inside industrial parks, it is possible. However, when it comes to off-airport landings in any sort of residential or built-up area, “permission and permits are typically required from Transport Canada,” King told Canadian Skies. “These permits typically incur an added cost, as well as the research and auditing of the landing locations and helicopter approach paths.”

Transport Canada regulates heliports under Canadian Aviation Regulations 305 and 325. Non-instrument approach heliports are classified as H1, H2, and H3, depending on the number and height of obstacles, and the availability of emergency landing and rejected takeoff areas.

Simply put, single-engine helicopters can only use H3 heliports; which are defined as the easiest and safest to land on. Twin-engine helicopters can use H3 and H2 heliports. Some twins can also land at H1 heliports, but only if they “are capable of remaining at least 4.5 metres above all obstacles within the identified approach and departure pathway when operating in accordance with their Aircraft Flight Manual, with one engine inoperative,” said Transport Canada spokesperson Kelly James. (Details can be found online at www.tc.gc.ca.)

Noise abatement requirements are also a concern, added Hoss Golanbari. “New helicopters are able to meet these requirements, but many of the older models still can’t,” he said. “This limits their usability in urban areas.”

Looking Ahead

New heliports must be developed before Canadian business takes a closer look at the corporate helicopter. Should this happen, you can expect twin-engine turbines to be the helicopter of choice, for those who can afford them. That’s because twin-engine helicopters can keep flying on one engine; a redundancy that makes them popular with Transport Canada and the insurance companies who underwrite their use – and the lives of the executives onboard.

“The twin-engine is gaining respect,” says Golanbari. “We’re starting to follow the U.S. trend towards using them. And when it comes to getting insurance, many companies see twin engines as a requirement, not an option.”

That said, the Canadian preoccupation with price will keep single piston and turbine helicopters in the mix. “Since 2007, operators of turbine-powered helicopters have favoured single-engine aircraft that are larger and can typically accommodate more passengers than the short light single class of aircraft,” said Chuck Evans. “Sales of twin-engine, corporate-configured helicopters in Canada are more the exception.”

Again, price is the issue. Until Canadian business attitudes change and mature, helicopters will continue to be seen as “toys” by corporations that don’t realize the value of minimizing executive downtime due to travel.

“Another challenge to market growth is capacity,” Evans noted. “Once the market reaches a saturation level, it becomes a replacement market. We see an upgrade to twins for a small segment of this market.”

Taken as a whole, the Canadian corporate helicopter sector has yet to reach its full potential. And chances are it won’t, until the shortage of heliports is addressed, and the true value of the helicopter as a business tool is recognized.

James Careless writes on aerospace issues for Vertical, Rotorhub and Aviation Maintenance magazines. He is a two-time winner of the PBI Media Award for Editorial Excellence.