Helicopter charter company?

[Hawkesy]

Hi,

I have come into some capital and thinking of investing in helicopter chartering.
Does anybody work in this area and if so could they give me some sensible ideas or tips?

Ta!

[Whirlygig]

If you want to make a small fortune from aviation, start off with a large one! :}

And I'm not being flippant! There are many tales of woe of small businesses that have started and failed. You have really got to know this business sector and its market to succeed; I'm guessing from your post that you don't.

Cheers

Whirls

[Hawkesy]

Thanks a lot for your advice.
I suppose its not what I want to hear but thanks for the honest answer anyway.

[Arthur's Wizard]

Hawkesy

Like most aviation businesses, the helicopter charter world is extremely competitive and the initial outlay is normaly pretty huge making the risk not insignificant. That said, there is plenty of business out there even if it may be hard to find initially. Like any business start up, research the market and then research it some more. Do your sums then do them again. If you think you can do it, go for it.

I always find that when everyone tells me I can't do something, it just makes me want to do it more! Good luck if you decide to go for it.

Merlin

[Spunk]

Here is my advice:

When it comes to setting up an aviation business don't listen to pilots :}

[quichemech]

And what ever you do don't let one run it:rolleyes:

[LeadWings]

Hi,
I think there are opportunities out there.
I posted a private message. Perhaps you'd have a look at it and get back to me.

[nigelh]

How much have you got to lose ? You can put some into my company which will really help next time the engine swallows a piece of metal and i get a bill for $400,000 :ok: Oh yes it would also really help when the starflex comes up plus spherical bearings $$100,000 :D PM me if yr mental:rolleyes:
ps I did once break even with a 47 crop dusting.....around 1984 i think...

[paco]

Hawkesy:

It can be difficult, but it can also be a success. You need to plan on 500 hours a year to be viable (that is, make a profit), which is ten a week. There is staff training to be included (PPCs, recurrency, first aid), and I reckon that a husband and wife team who owned the helicopter outright and kept good control of the costs could make a living, if they had a market and, if they hired any staff, ensured they were well trained.

Two tips: make sure you get a reliable machine (206) and that you give discounts after people have done any flying - I used to have a lot of people come in the office and say they wanted to give me lots of flying and how about a discount, so I said yeah - every 10th hour free, or whatever.

Actually, 3 tips: You need to be able to pay for everything up front. Paying as you go along on anything more than about a third of the investment will kill it stone dead.

I just did an article on this in one of the helicopter magazines (not an American one), but feel free to PM if you have any questions.

And starflexes (AS 350/55) very rarely use up their full hours allowance - more like two thirds before you have to change them.

Phil

[AdamFrisch]

I'd buy a S-76 and start a helicopter airline flying from London to Amsterdam, Devon, Dorset, Hastings, Ramsgate, Southampton etc. Short haul, and where the communications and commuting people suffer.

[quichemech]

Surely more than a hundred better ideas, you've only got to watch the dragons den to get better ones.:rolleyes:

[hihover]

Hawkesy,

Are you starting to build up a picture here. I started my own helicopter op 3 years ago and without doubt, it has been a tough 3 years.

There are, however, great rewards.

I don't know what your background is or where your expertise lies, therefore, it is not possible to advise you either way. If you just want to be a businessman/business owner, have a real good look around at what your windfall can buy and the potential return.

My own helicopter operation is for sale. It would not suit your needs as it is in Florida, however, if you pm me I can tell you what you should expect to get for what amount of money. If you decide to follow your desire anyway, again, pm me with specific questions and I will help as best I can.

[Lost Again]

Hello vbmenu_register("postmenu_3288034", true); Hawkesy,

I put a few figures together on starting a training organisation together with the following

full time CFI
additional freelance pilots until another could be hired
Office Walla
1 x R22
1 X R44
Rent on office and hanger space
2 x helipads with unlimited landings
maintenance
insurance
loan repayments on the helis
fuel

The intention was to own the helis, run a profesional organisation and pay the staff properly in a similar way to my engineering company.

Based on a reasonable amount of hours a year the business would have lost money, based on even more hours it seemed like it would lose even more.

The conclusion to make money was :-

(1) Con some poor sod into leasing the aircraft to you - you pay them a low figure they take the risk thinking that your lease back will lower the ownership costs.

(2) Do not pay the pilots well - ie pay them by the hour not a wage, the rate you pay them per hour might seem high from outside the industry but multiply it by bugger all when the weather is bad or there is no work and it is not so good.

My reason for looking at this was I own a company and thought perhaps a nice little aviation company attached to it would give me a bit of cheap flying.

One of my instructors told me another saying - if it flies f--ks or floats rent it don't buy it - rude maybe but the first and last are probably true.

i am sure that I will get shot down in flames as I am only a PPLH - and my comments are based on running my own engineering company and 2 years seeing how an operation works during my training and self fly hire.

[finals09]

Hawkesy

My top tip would be never own your own turbine aircraft, no experience of piston, but if you can lease one from an owner then by far the best way.

Having had 6 years experience of running a well known 355 F1 on the charter market, it is a complete lottery on what is going to go wrong next. We had everything from engine gearbox making metal, starflex not running to time, blades delaminating, heavy landing whilst on lease, numerous autopilot problems and finally almost the improbability of a thomas coupling failure. We were lucky as we maintained our own aircraft but over the six years almost certainly paid Mac's over £350,000 in parts and various engine overhaul shops the same.

Saying all that we averaged 275 hours a year charter at a self drive rate of around £ 550 dry, but as mentioned we did our own maintenance which was 'lost' in the parent organisation. This made it look reasonable but if contracting the maintenance out would have been a totally different story.

During my time in the industry the 'ideal' way to run this type of business is start a training school where your clients love the idea of owning an aircraft, they buy one, you lease it off them and charter, then maintain it as well. Several well known helicopter businesses started this way.

The only way to make charter work is to lease an aircraft off an owner who wants some revenue to a) make it a business and claim the VAT back and b) subsidise the cost of ownership. Many ask can they make money from this, the answer is always no, based on turbine aircraft.

If you bought a new aircraft with tip to tail power by the hour then you can accurately forecast your costs for years to come. However the interest and depreciation costs on a new aircraft would wipe out any profits from a charter operation.

After saying all this I admire your ambition, something I would like to do sometime soon, and don't forget there are many successful operators out there today. If you have the bug then very difficult to do anything else. Just be wary and if thinking of a turbine then find someone who owns one and lease it !!

Hope this helps and obviously just my opinion from my experience operating what a a well known Chief Pilot calls the 'Plastic Pig'

Regards

F09

[Peter PanPan]

I am considering setting up my own Air Taxi operation, flying most likely a R-44 and am in the process of gathering as much information as possible about how to run such kind of operation. I know folks here come from all sorts of backgrounds and there are certainly a few of you that have either worked in this field or even managed their own business; it would be great if you could share some of your tips and experience, I am not requesting the golden recipe about how to bake the perfect pie but as it usually goes along here an informal and constructive chat about some of the key aspects of running an Air Taxi operation.
I am not specifically interested in Part 135 Ops, in fact all it would be even better to have inputs from all horizons.

[Hughes500]

PPP

In EASA land you are looking at £ 8500 start up costs then £ 10k a year in running costs to The CAA. Plus have to write a manual, have quality manager, chief pilot,accountable manager, auditor,maintenance manager.
I have just done so, presented CAA with our manual Feb 1st, might go live if lucky by September. Best thing is to piggy back of someone elses AOC unless you want to be master of your own destiny.
R44 not that good for charter ops due to its performance. For take off you have to have nearly 450m clear space to acclerate over, so counts out lots of places !:eek:

[nigelh]

I think you are MAD !!!! I cannot see how you can make money with the CAA fighting you and pickihng your pockets the whole way ...it is impossible . Wait a year or two until they have killed off aviation ( esp helicopters ) and then try under a new regime . You will find that even a cricket pitch is deemed too small to take off from with those twats .:ugh:
Lastly a Robinson is not a good machine to use as lots of people will not fly in them ................

[thecontroller]

Mmm.. single engine charter in the UK? Not much of a market for that, especially in a Robinson. Huge setup costs for an AOC operation as well. Plenty of the established charter companies in the UK are struggling, or have closed, so I would think seriously about saving your money!

[thecontroller]

http://www.pprune.org/rotorheads/251384-starting-helicopter-company.html

http://www.pprune.org/rotorheads/275923-helicopter-charter-company.html

[chopjock]

PPP
I am not specifically interested in Part 135 Ops, in fact all it would be even better to have inputs from all horizons.

Why not consider setting up a flying club? You could advertise cost sharing flights on the club notice board and fly members anywhere with a lot less rules that would normally apply to an AOC operation.

[Peter PanPan]

First of all thank you Moderators for moving my thread to this older one, I promiss I did a few searches but somehow still missed the original one.
Secondly thank you for the few answers already, seems like we have a lot of bitterness accumulated against the UK CAA, I know the beast too and wouldn't ever start such business in the UK. It would be somewhere far away from EASA land on the southern hemisphere, sorry about being vague but the location doesn't really matter for the purpose of this discussion since I really want to hear what everyone has to say: US, Canada, Australia, New Zealand, EASA land...

Chopjock thanks for the flying club suggestion, to be analysed ;)
Thanks The Controller for the links :ok:

Could someone name some of the best options in terms of aircraft for this kind of operation? (It would be interesting to hear pros and cons in terms of maintenance as well)

[The Night Owl]

Go to the bank, withdraw £100k, chuck it on the BBQ and see how you feel watching it going up in smoke and then think how willing you would be to do the same again next year.

If it feels good go for it!

[Peter PanPan]

Anything more constructive than the previous post?
Great comment Night Owl ;)

[John Eacott]

thank you for the few answers already, seems like we have a lot of bitterness accumulated against the UK CAA, I know the beast too and wouldn't ever start such business in the UK. It would be somewhere far away from EASA land on the southern hemisphere, sorry about being vague but the location doesn't really matter for the purpose of this discussion since I really want to hear what everyone has to say: US, Canada, Australia, New Zealand, EASA land...

PPP,

Australia doesn't (yet) have the restrictive practices of the CAA, but you really, really need to have a business plan before you commit to investing in any business. Buying a helicopter and waiting for the punters to walk in the door will see you broke in a month: it just doesn't work that way.

Some assured income stream is essential, even if it consists of joyflights every weekend at Country Shows around the state: cash income is a Good Thing ;) Better to have a contract up front, and then obtain the right machine to serve that contract: hawking the wrong helicopter for the job will both annoy the client, and drive you to distraction in a very short period of time. Never, never try to force the client into a helicopter because it suits you; it has to suit him as well.

Back to the business plan. Get all your costs sorted beforehand, and include absolutely everything that will cost you without any skimping. All DoC's and FoC's have to be budgeted regardless, otherwise your bottom line will soon go south. Just as important is marketing, Yellow Pages and internet presence is essential before the helicopter casts a shadow on the tarmac. Above all, don't confuse cash flow with profit: your charter rate must be enough to give a profit on top of paying the bills!

If you are seriously considering operating in another country to that in which you currently live and work then you'll be up against a host of qualifying issues. CASA require about 6 months to process an AOC application, including a Business Plan and numerous financial assurances, and a Chief Pilot for the AOC. Chief Pilot criteria are also quite onerous: for a new chum to arrive and get licensed and approved as a CP may be a big ask.

There have been many operators here who started small (I only had one B206 to start with) and moved on: a few friends back in UK have done much the same. Aeromega and Castle Air were both started by ex RN mates who also had a single B206 initially, and seem to have done well, so gloom and doom merchants aren't always right :=

Whatever happens: good luck :ok:

[Tallguy]

John

Aeromega closed the doors on the AOC some 18 months ago now I think, and whilst the flying school is still going that also has been scaled back, Castle Air on the other hand still seem to be doing very well but have heavily diversified into sales/maintenance and as we all know specialise in aerial filming so aren't souly reliant on charter. So whilst I agree we shouldn't all be doom and gloom in these particularly tough times it takes a brave man and certainly softly softly is the approach.

[John Eacott]

Tallguy,

Understood: maybe I should have made the point that Keith at Castle and Kit at Aeromega before he sold, seem to have done well!

And I sold three years ago, so I wouldn't expect my old company currently to reflect on me, but the point was about personal rather than company achievements ;)

[Peter PanPan]

John Eacott,

Thank you for sharing with us both your personal experience as a small operator and your views, definitely refreshing after the gloom and doom vibe that arised over this thread.

I must say that I got slightely confused though when you write that obtaining a contract up front prior to acquiring an aircraft is key, along with the marketing before the helos arrive. How can you possibly seriously advertise your company when the hangar is empty?

Thank you also for the realistic time frames required by the CASA in order to process the paperwork.

Again thanks for your positive attitude:ok:

[Tallguy]

Ahhhh John I'm right with you now

[John Eacott]

I must say that I got slightely confused though when you write that obtaining a contract up front prior to acquiring an aircraft is key, along with the marketing before the helos arrive. How can you possibly seriously advertise your company when the hangar is empty?

My intention was to stress that it is important (essential?) to have work lined up before you purchase a machine, even (as mentioned) if it is only joyflights at Country Shows. A contract for an aircraft would be the ideal, but whatever it is, make sure you have a cash flow lined up before you start.

As a comparison, would you set up a coffee shop without first checking that a market exists at that location? Similar scenario: an assurance of income is essential to any new business. Along the same lines, marketing the new coffee shop prior to opening gives a better chance of getting clients than sitting behind the counter, hoping....!

Marketing means making sure Yellow Pages advert is booked before the yearly closing date, getting online coverage with Google hits, mail out to prospective clients, etc etc. If you have been operating as a pilot, use the contacts that you have built up over the years to bring some work into your company. You can only sell what you have, so choose the helicopter to suit your planned market; an R44 would better suit joyflights than a turbine (eg B206) but a 206/EC120 would better suit general charter, photography, filming etc. Costs and charter rate would reflect the income and expenses commensurate with the helicopter type and operation.

[topendtorque]

Australia doesn't (yet) have the restrictive practices of the CAA


no, but they are trying, via trying to implement CASA 'policy' with each individuals interpretation, rather than CASA 'legislation' is one favourite trick.

another federal trick (1) that we have seen lately is that they wish to be silent partners, (I.e. the mining industry) and share in the profits without committing to start up and running costs.

as far as charter in the joy flight game, this trick is already well worn by certain sections of the commuty.

To end up with a small fortune, start with a big one and follow me;

Pick a venue that has something worth while selling as a joyflight venue, say it has 250,000 patrons per year, budget on 2.5% of its patronage as joyflight clients, your loading will be 2.1 passengers per flight, (these are real figues) things go well your are making a quid.

but no there's more.

all of a sudden the venue is now granted ownership of by a non investor group who all of a sudden want to do the trick (1) as above and do so by upping a high % surcharge to your gross return without any consideration of any of your costs.

to then end up with a small fortune;

sell quick with your good figures to the next sucker that comes along.

end of story.
cheers tet