View Full Version : Airnorth future? Bristow in financial trouble
lurker999
22nd Apr 2019, 02:13
https://www.flightglobal.com/news/articles/debt-ridden-helicopter-operator-bristow-warns-on-fut-457523/
US-headquartered offshore helicopter specialist Bristow Group has issued a stark warning that the company faces insolvency unless it is able to implement a financial turnaround. "If we are unable to execute transactions to improve our financial condition, we do not believe we will have sufficient liquidity to conduct our business operations based on existing conditions and estimates during the next 12 months."
So where does this leave Airnorth? They are a wholly owned subsidiary of Bristow and if Bristow goes under, Airnorth will go with them.
Anyone want to buy a regional?
wheels_down
22nd Apr 2019, 03:02
Fairly flat business but not losing or making much at all. Remove the currency headwind which seems to be wiping the profit each year, and its an attractive business for a local.
I highly doubt Virgin wants anything to do with Embrear again so I’d actually expect QF or Alliance to pick this up considering they do have a small relationship with them at the moment.
It wouldn’t be worth much. Tiger was 60 million flat profit with a dozen airbus so 10-20mill max.
crosscutter
22nd Apr 2019, 08:53
Airnorth’s EBITDA was US $-1.2million in the Dec18 qtr. (last reported) Bristow Group Inc. - News Release (http://ir.bristowgroup.com/mobile.view?c=91226&v=200&d=1&id=2387002)
Darwin’s economy is crunching. NT government’s debt is spiralling. https://www.abc.net.au/news/2018-12-19/why-is-the-northern-territory-in-so-much-debt/10632654
QF have adjusted their own and their subsidiaries services and bases.
Anyone want to buy this regional?
WannaBeBiggles
22nd Apr 2019, 20:19
Unfortunately it'd be a lot easier for a competitor looking at entering (or expanding) the Darwin market to wait until the entity folded and then pick up the routes and crew left behind for nix.
The Green Goblin
23rd Apr 2019, 02:42
What competitor would that be?
Theres no point fighting over the last couple of sips in an empty good bag.
Mr Google Head
23rd Apr 2019, 02:47
Maybe the previous owners will buy it back at a bargain price
davidclarke
23rd Apr 2019, 04:48
With QF’s stake in Alliance, Airnorth might be a good investment for Virgin. It’s would allow them to secure a wholly owned subsidiary that can operate ejets profitably for its QLD operations taking away its reliance on Alliance.
Pavement
23rd Apr 2019, 05:04
With QF’s stake in Alliance, Airnorth might be a good investment for Virgin. It’s would allow them to secure a wholly owned subsidiary that can operate ejets profitably for its QLD operations taking away its reliance on Alliance.
The only problem with this statement is that its not operating the E Jet profitably. Its a horrible aircraft to fly on with little leg room. In the Australian environment its only suitable for niche routes with no competition.
The Green Goblin
23rd Apr 2019, 06:59
Maybe the previous owners will buy it back at a bargain price
I’d imagine MB had his Alan Bond moment with Bristow.
Small fortunes in aviation and all. I don’t think the previous directors would be keen to spend that war chest keeping it afloat until theres only air in the piggy bank.
The last thing Virgin need to do is buy another regional airline. If Airnorth go dodo, someone else will pick up the pieces. I’d imagine those Alliance F70s would be a pretty good machine up there too.
Icarus2001
23rd Apr 2019, 08:42
Its a horrible aircraft to fly on with little leg room. Most passengers (and pilots) loved the VA Ejets. Seat pitch determines leg room which is decided by the operator. Passengers liked 2x2, that is no middle seat.
The only problem with this statement is that its not operating the E Jet profitably. How do you know this? Air North makes a small profit, do you have a source? Or is it "the vibe"?
Stationair8
23rd Apr 2019, 08:56
Embraer E170/190 is probably one of the nicest aircraft to ride in, lot more appeal than the the Fokker 70, Dash8 400, ATR series and the CRJ.
If you want cramp Pavement, try the QLink B 717 on a 2.5 hour sector.
Pavement
23rd Apr 2019, 10:05
Embraer E170/190 is probably one of the nicest aircraft to ride in, lot more appeal than the the Fokker 70, Dash8 400, ATR series and the CRJ.
If you want cramp Pavement, try the QLink B 717 on a 2.5 hour sector.
Did DRW-TSV a couple of weeks ago. Leg room (or pitch if others want to be pedantic) was very average. F70 & F100 are just as good in my opinion. Haven’t done B717 for a long time so can’t remember.
Not ‘the vibe’ , just read a lot.
Icarus2001
23rd Apr 2019, 11:16
Leg room (or pitch if others want to be pedantic) was very average. Understood and I don't doubt your experience but you cannot judge an entire line of aircraft based on experience with one operator. Each sets the pitch according to their business model. So you could get very different experiences depending on which aircraft you are on. How was the noise level? Seat comfort? Air conditioning?
Pavement
23rd Apr 2019, 12:22
Understood and I don't doubt your experience but you cannot judge an entire line of aircraft based on experience with one operator. Each sets the pitch according to their business model. So you could get very different experiences depending on which aircraft you are on. How was the noise level? Seat comfort? Air conditioning?
Ok got your point. I’ve travelled the E series in other parts of the world and enjoyed the experience. The Delta layout with some extra legroom seats (E190) is particularly good. Alitalia was also good despite the Italian service.
Airnorth has a good service on their longer routes but I, personally, thought the space was a bit below par.
VH DSJ
24th Apr 2019, 00:52
Ok got your point. I’ve travelled the E series in other parts of the world and enjoyed the experience. The Delta layout with some extra legroom seats (E190) is particularly good. Alitalia was also good despite the Italian service.
Airnorth has a good service on their longer routes but I, personally, thought the space was a bit below par.
The Delta Ejets are actually E175/E170s operated by SkyWest or Compas Airlines, which are regional airlines regulated by a scope clause which only allows them to be configured with 76 seats. Consequently, there is more leg room giving a much more comfortable ride for passengers. As others have indicated in this thread, the Ejets are popular with pilots and passengers alike. I can't understand why VA turfed them out and replaced them with Fokkers/ATRS on their thin routes. According to this, one of VA's leased Ejets will be returning to Australia to be flown by Cobham. https://www.airfleets.net/ficheapp/plane-e190-451.htm
one of VA's leased Ejets will be returning to Australia to be flown by Cobham.
Will be arriving in early May...
Daddy Fantastic
24th Apr 2019, 20:51
Rubbish!! I flew the E-Jet for 4 years and the pax loved it. No middle seat and plenty of leg room, very quiet as well.
On eyre
25th Apr 2019, 00:20
DF agree - have flown on BA E-jets many times and prefer them to the Airbus for sure. And they perform pretty well out of LCY.
Snakecharma
25th Apr 2019, 00:44
VH-DSJ look no further than a dapper looking Italian chap who had a dose of ‘these things weren’t my idea and I want them gone’
Same bloke ordered the 330’s at great expense (don’t get me wrong they are a great aeroplane - just not at the price they paid).
The VA ejet was extremely popular, though a little binary, some people hated them, the majority though I think loved them.
Icarus2001
25th Apr 2019, 02:26
The VA ejet was extremely popular, though a little binary, some people hated them, the majority though I think loved them. I wonder if the people that "hated" them would prefer the ATR?
PoppaJo
25th Apr 2019, 05:52
Delta has got a 35’ pitch in its Economy X Cabin on the ex Virgin 170s it took. From experience it’s certainly the most comfortable ride in the states. Very private Jet like.
Virgin’s X product would have been a very nice ride should they have kept them.
belly tank
26th Apr 2019, 01:18
https://www.ainonline.com/aviation-news/general-aviation/2019-04-24/new-director-slate-management-proposed-bristow
Mach E Avelli
26th Apr 2019, 01:57
12 irrelevant posts waffling on about seat pitch etc. Usual Pprune ADHD in action.
But thanks to Belly Tank, back on topic. If Bristow do unload non performing 'asset' Airnorth at the right price, the AOC could be of use to Pionair, with their recently announced deal in Kiribati.
Bristow's problems may also go some way to explaining why Kiribati did not select Airnorth for the contract.
Chocks Away
26th Apr 2019, 05:16
Further to (https://www.flightglobal.com/news/articles/shareholder-slams-bristow-for-years-of-mismanagemen-457668/) belly tank's story link above.
Happy Landings :ok:
Bend alot
26th Apr 2019, 05:38
It is probably safe to say a few things - Airnorth was not a smart financial investment for Bristow and they paid way too much for it.
Is it smart for a rotary specialist company now to off load it's two "odd men out" fixed wing operations - probably yes.
But what losses will they accept and more importantly who might buy it or even be interested?
I very much doubt MB, RL & JG would throw money at it in a buy back, but you never know. I am not sure JH would want to own it again even with sons. I think NP has lost enough with PA not to want to try that type of aviation again. The other Darwin based operators I doubt could or would wish to make an offer.
Qantas and Virgin I doubt would have an interest, the main contracts of these two I also doubt would have much interest in an offer.
A foolish territory government (they are common) may put in a offer as a vote winner but that would be bad in the long run for everyone.
So an Asian offer is a possibility - Darwin head office as base, but all crew and maintenance offshore bases.
Silk air for a song?
Duck Pilot
26th Apr 2019, 07:29
Where’s the NT government going to get the dollars from when they are literally broke now? Having said that nothing would not surprise me. Just hope they don’t end up doing an Ansett style collapse if the rug is pulled from under them.
onehitwonder
26th Apr 2019, 07:35
Bristow is one thing however i think you'll find Air North is profitable within its own operation.
My concern would be the engines for the 170 since they arent made anymore
Mach E Avelli
26th Apr 2019, 07:59
The fleet is probably worth not much at all. An astute buyer would not want most of it. Any value would be in the AOC, should a need be identified. Obtaining a start up AOC from CASA is a monumental undertaking, so what is that piece of paper worth? More than a few beat up old airframes.
Bend alot
26th Apr 2019, 08:10
Where’s the NT government going to get the dollars from when they are literally broke now? Having said that nothing would not surprise me. Just hope they don’t end up doing an Ansett style collapse if the rug is pulled from under them.
There is a federal election, but I expect that it would only be Scott to loan a few bucks to the NT jokerment.
The unions do not even support the Gunner government in any real way - as a delegate I was informed they are a joke and hate to deal with them.
Icarus2001
26th Apr 2019, 10:25
So an Asian offer is a possibility - Darwin head office as base, but all crew and maintenance offshore bases. So, how would that be in line with current laws?
Bend alot
26th Apr 2019, 10:34
Cloudy, Icarus but dependant on political donations and environment - as always.
Arthur D
26th Apr 2019, 11:29
The fleet is probably worth not much at all. An astute buyer would not want most of it. Any value would be in the AOC, should a need be identified. Obtaining a start up AOC from CASA is a monumental undertaking, so what is that piece of paper worth? More than a few beat up old airframes.
Agree - however Air North also comes with some industrial baggage which would not be attractive and can be very expensive in the long haul.
topend3
27th Apr 2019, 04:55
Lots of monopoly routes that someone would likely step in to service if they do go under. Link between Broome Kununurra and Darwin, Gove and Cairns and the Timor route then the stuff closer to Darwin that is probably less profitable but a vital link for those communities. Perhaps QF or VA would pick up the jet routes and one of the GA outfits to do the turboprop work. Maybe QLink open up their 717 base again ?
belly tank
27th Apr 2019, 06:18
They also service Darwin - Truscott airbase using the Bras and Metro for the offshore helicopter operator Babcock.
topend3
27th Apr 2019, 06:20
Yes and McArthur river so a fair bit of charter work up for grabs too could see Alliance basing an F100 or two up there
Flyboy1987
27th Apr 2019, 10:30
They also service Darwin - Truscott airbase using the Bras and Metro for the offshore helicopter operator Babcock.
i don’t think they operate metros anymore?
maxter
27th Apr 2019, 12:47
The only problem with this statement is that its not operating the E Jet profitably. Its a horrible aircraft to fly on with little leg room. In the Australian environment its only suitable for niche routes with no competition.
Really. I fly on it regularly to Melbourne and love it. A great little jet. I also found the VA jets very comfortable when they were here
belly tank
27th Apr 2019, 23:45
i don’t think they operate metros anymore?
your probably right Flyboy, it’s been a little while since I was at Truscott. :)
industry insider
28th Apr 2019, 11:09
onehitwonder
Bristow is one thing however i think you'll find Air North is profitable within its own operation.
I think you will find it is not
belly tank
3rd May 2019, 13:00
As predicted Airnorth is on the chopping block.
https://www.flightglobal.com/news/articles/airnorth-and-eastern-could-be-sold-under-bristow-res-457851/
Icarus2001
3rd May 2019, 15:00
Key assets for disposal include Airnorth and Eastern Airways, based in Australia and the UK respectively, which are both forecast to be negative on earnings before (EBTIDA)
Well there is the answer to the statement above that Air North is profitable. Negative earnings even before tax and interest.
industry insider
3rd May 2019, 15:22
Bristow is about to close it’s Broome base next week as it has finished flying for Inpex after the contract was terminated. In terms of 2014 levels of aircraft (30 now 3) pilots and engineers (140 now 16 each) it’s now 10% of its 2014 size.
Pavement
3rd May 2019, 21:22
How do you know this? Air North makes a small profit, do you have a source? Or is it "the vibe"?[/QUOTE]
Will Bristows own statement suffice? The vibe about this operation has been around for a while.
3 S92 are about to turn up for a contract in Port Hedland WA, they were marking the taxi ways out 2 weeks ago
I think the thing to remember here is that Airnorth has been very profitable in the past. They have only started loosing money since Bristow came on board. I have no doubt money has been shifted overseas. At the end of the day, they are a helicopter company attempting to run a fixed wing business - it was never going to work. The sooner they get MB back onboard, the better. Together we try.
Duck Pilot
4th May 2019, 06:43
Pretty sure any contract with an oil and gas producer will have clauses in it to ensure the client doesn’t loose out.
Stationair8
4th May 2019, 07:20
Word on the street is that MB, is about to go on the board of CASA.
Scooter Rassmussin
4th May 2019, 07:21
Watch Qantas Link make a move !
belly tank
4th May 2019, 08:42
3 S92 are about to turn up for a contract in Port Hedland WA, they were marking the taxi ways out 2 weeks ago
Its only short term contract 6-9 months.
Duck Pilot
4th May 2019, 11:50
QantasLink move in with what? Their own fleet or take the existing TL fleet over?
industry insider
5th May 2019, 11:23
ersa
3 S92 are about to turn up for a contract in Port Hedland WA, they were marking the taxi ways out 2 weeks ago
Same Santos drilling contract they have been supporting contract as Bristow has been supporting from Karratha, 2x S-92s. Bristow has 5 in country now, 3 are heading to the North Sea.
Pavement
The recent Bristow 10Q flings have shown Air North to be making a small loss, profit or loss is highly dependent on the fuel price.
The whole idea was to buy airlines (Eastern in the UK and Air North in Australia) and to control the whole travel supply chain for the offshore oil and gas workforce. But in Australia, Bristow customers didn't buy it, in fact, they are very adverse to having one logistics transport supplier. Bristow canvassed their customers and the reaction was negative.
But one or two management types in Bristow had delusions of grandeur and with the cash rolling in at that time from helicopter operations, they went ahead and did it anyway. After the purchase, Bristow didn't actually try to make the tie up with the helicopter contracts so Air North was always going to be a stepchild. They installed a "tea bag and toilet paper sheet counting" finance type as Air North CEO who had briefly held a position in Bristow as Service Delivery Manager. He was moved to Air North because the Bristow Helicopter customers neither liked the service nor the Manager.
WannaBeBiggles
5th May 2019, 20:19
They installed a "tea bag and toilet paper sheet counting" finance type as Air North CEO who had briefly held a position in Bristow as Service Delivery Manager. He was moved to Air North because the Bristow Helicopter customers neither liked the service nor the Manager.
If it's the person that is still CEO at AN now, then that individual is also CEO of Bristow Australia.
Bend alot
6th May 2019, 05:43
Word on the street is that MB, is about to go on the board of CASA.
Good I've got photos!
Zhoottoo
7th May 2019, 00:40
Word on the street is that MB, is about to go on the board of CASA.
CASA website says:Mr Michael BridgeFirst appointed: 1 October 2018
industry insider
7th May 2019, 09:46
WaanBeBiggles
If it's the person that is still CEO at AN now, then that individual is also CEO of Bristow Australia.
Same one. Ex Finance Manager Bristow, Head of Bristow Travel where he honed his tea bag counting and toilet paper rationing skills. After a brief spell as Bristow Service Delivery Manager, a new concept introduced by the then Bristow Australia CEO but which lasted only weeks, the purchase of Air North provided a promotion opportunity which also conveniently moved him away from the important oil and gas clients.
The Bristow Financial Year ends in April. Between April 2017 and April 2018 (latest figures not yet available) Bristow (mostly) and Air North lost $31,776,293 between them in Australia alone.
WannaBeBiggles
7th May 2019, 21:04
The Bristow Financial Year ends in April. Between April 2017 and April 2018 (latest figures not yet available) Bristow (mostly) and Air North lost $31,776,293 between them in Australia alone.
From memory AirNorth accounted for less than $2mil of that loss, roughly the cost of only one second hand CF34-8E from the sandpit. How many new engines did AN need in the last FY? So if it weren't for that, it wouldn't be a stretch to argue the company is a profitable entity..
From memory AirNorth accounted for less than $2mil of that loss, roughly the cost of only one second hand CF34-8E from the sandpit. How many new engines did AN need in the last FY? So if it weren't for that, it wouldn't be a stretch to argue the company is a profitable entity..
Quite right Biggles, a quick perusal of Bristows reports reveals the following “Historical Fixed-Wing Performance” for AirNorth:
FY15: EBITDA $0.7m (1Q Only)
FY16: EBITDA $12.4m (No Loss Making Qs)
FY17: EBITDA $8.9m (No Loss Making Qs)
FY18: EBITDA $7.2m (Q4 Loss of $1.4m)
FY19: EBITDA -$1.6m (Q1 Profit of $0.2m)
As I said previously, Airnorth has been a very profitable company. It's just being run by monkeys at the moment.
Icarus2001
9th May 2019, 03:25
Great, their EBITDA figures are not too bad. What about after they have paid their bills? My earnings before tax are pretty good too but those dollars are useless in the real world as I cannot spend them.
EBITDA. Earnings BEFORE interest, tax, depreciation and amortisation.
Great, their EBITDA figures are not too bad. What about after they have paid their bills? My earnings before tax are pretty good too but those dollars are useless in the real world as I cannot spend them.
EBITDA. Earnings BEFORE interest, tax, depreciation and amortisation.
Well obviously the corporate tax rate for the Australian entity is a flat 30%, however this is only applied after deducting the NON-CASH expenses of Depreciation and Amortisation, resulting in an effective lowering of the tax rate payable. Of course the wild card is the Interest component which is Interest Income - Interest Expense, so depending on their cash at bank vs cash loans/drawn credit facilities it could be a plus or minus. Remembering that operational leases such as for aircraft and equipment are categorised as direct expenses and the interest component is rarely separated, hence my distinction that it only relates Cash Loan facilities.
Therefore, after D and A and even accounting for some I, they probably paid next to no tax and got to keep most all of the cash actually!
The big question remains whether or not they will look to sell, or if Bristow would like to try and retain AirNorth (and Eastern for that matter) when/if they go through the Chapter 11 process?
The airline doesn’t seem a natural fit for any of the incumbents, save MAYBE for Alliance, but even then not really... Maybe the most likely option would be Private Capital or another adjacent operator (like Bristow were).
belly tank
11th May 2019, 20:28
Bristow files for CH11
Bristow Group Inc. - Home (http://ir.bristowgroup.com/mobile.view?c=91226&p=irol-news&nyo=0)
VH DSJ
11th May 2019, 21:54
Bristow files for CH11
Bristow Group Inc. - Home (http://ir.bristowgroup.com/mobile.view?c=91226&p=irol-news&nyo=0)
That statement says "Filings Include Certain U.S. Entities and Cayman Islands Subsidiaries; All Other Non-U.S. Entities Excluded from Filings ...
Bristow's other non-U.S. entities, including those holding Bristow's non-U.S. air operating certificates ("AOCs"), are not included in the Chapter 11 filings."
By that, let's hope it means Air North is still operating tomorrow. Can anyone confirm?
Hasherucf
12th May 2019, 00:32
That statement says "Filings Include Certain U.S. Entities and Cayman Islands Subsidiaries; All Other Non-U.S. Entities Excluded from Filings ...
Bristow's other non-U.S. entities, including those holding Bristow's non-U.S. air operating certificates ("AOCs"), are not included in the Chapter 11 filings."
By that, let's hope it means Air North is still operating tomorrow. Can anyone confirm?
Business as usual at Airnorth
It’s business as usual for the whole of Bristow at this stage... Chapter 11 “Bankruptcy” Protection in the US is much like ‘Administration’ for a company in Aus, with one Main difference being that the standing management retain control, not an external advisor. It basically just stops financiers from being able to pull the ripcord and they can threaten liquidation as the alternative to force renegotiated loans/equity swaps etc. (which is the bit shareholders don’t want as it can seriously weaken their existing holdings by the banks taking a massive chunk of new shares in exchange for wiping the debt. In some historic cases it’s rendered existing stockholders’ stake from 100% to effectively less than 1%) Who knows what deal they will strike but those bankers can ask for assets or other things to be divested as part of the deal, which may force their hand and see the fixed-wings sold off, I highly doubt they would let them collapse.