Purchasing and operating your own helicopter
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Purchasing and operating your own helicopter
I have a business in the UK which i have been advised may benefit from purchasing its own 5 seat helicopter.
Clearly extreme costs involved, however, set against my staffs current travel and time costs possibly worth a go. A bit stumpted on where to start with purchasing options/finance. Any info on what type of helicopter with a reliable reputation and running cost appreciated.
Clearly extreme costs involved, however, set against my staffs current travel and time costs possibly worth a go. A bit stumpted on where to start with purchasing options/finance. Any info on what type of helicopter with a reliable reputation and running cost appreciated.
Purveyor of Egg Liqueur to Lucifer
I have a business in the UK which i have been advised may benefit from purchasing its own 5 seat helicopter.
1. Do you and your advisor get on?
2. Does your advisor have a helicopter licence and told you he'd fly it for you at a reasonable price?
3. What did he/she mean by, "possibly worth a go"? Hardly, IMHO, sound advice.
4. Didn't they find out the costings in order to give out this 'advise'??
Q. What is the easiest way to get a small fortune?
A. Start off with a large fortune and buy a helicopter!
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I'd suggest that you look carefully at the costs to simply fly based on renting aircraft by the hour from a recognised organisation. If you were going to do say 200 hours in a year, or more, you will be able to negotiate a decent deal, say at least 10% off the single hour rates. All the VAT will be recoverable, & you can get a well qualified pilot thrown in.
If the cost of that would be acceptable, and assuming you are up for 200-400 hours a year, then look at the cost of your own aircraft, but don't expect to save more than, say, 25% of the overall cost, and anticipate that by taking the risk on the maintenance, you may get a big hit.
If you are up for 500+ hours per year, you're almost certain to win having your own.
Sub 200 hours, your annual insurance, hangarage and maintenance costs are, in my view, likely to outstrip any significant cost reduction over hour-based renting, and therefore the risk on the maintenance is pointless.
Final comment is that as a manager, if you intended doing the flying of your staff yourself, there may be issues relating to personal liability in an accident if you don't have decent hours. Clearly, if you're a high time flyer, you're fine! If not, I'd make sure your personal/director/officer's (as opposed to the aircraft's) liability insurance won't be compromised.
BW
If the cost of that would be acceptable, and assuming you are up for 200-400 hours a year, then look at the cost of your own aircraft, but don't expect to save more than, say, 25% of the overall cost, and anticipate that by taking the risk on the maintenance, you may get a big hit.
If you are up for 500+ hours per year, you're almost certain to win having your own.
Sub 200 hours, your annual insurance, hangarage and maintenance costs are, in my view, likely to outstrip any significant cost reduction over hour-based renting, and therefore the risk on the maintenance is pointless.
Final comment is that as a manager, if you intended doing the flying of your staff yourself, there may be issues relating to personal liability in an accident if you don't have decent hours. Clearly, if you're a high time flyer, you're fine! If not, I'd make sure your personal/director/officer's (as opposed to the aircraft's) liability insurance won't be compromised.
BW
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1.Yes we get on.
2.No he is about to retire from the airline business.
3.Again, his knowledge is fixed wing not helicopters but thinking of options open us.
4.No.Company AGM brought out lots of suggestions/advise, this was one of many.
5.He has mentioned this quote. But as a shareholder he asked that it was explored anyway.
Regards
2.No he is about to retire from the airline business.
3.Again, his knowledge is fixed wing not helicopters but thinking of options open us.
4.No.Company AGM brought out lots of suggestions/advise, this was one of many.
5.He has mentioned this quote. But as a shareholder he asked that it was explored anyway.
Regards
Business Proposal
Twin-engined enables you to go straight line in more cases than not. IFR capable allows you bigger safety/decision margins ie greater chance of getting to your destination (arguments for and against I guess!).
I run a vip twin squirrel operation for a business and would happily discuss costs/feasibility over lunch some time as we have recently gone down this very same route!
Where would your area of ops be mainly based?
Over what sort of terrain?
How much do you value your execs well-being - 1 turbine v 2?
IMHO wouldn't touch non-turbine aircraft for frequent business use if you're after 4/5 seater with room to spare.
I run a vip twin squirrel operation for a business and would happily discuss costs/feasibility over lunch some time as we have recently gone down this very same route!
Where would your area of ops be mainly based?
Over what sort of terrain?
How much do you value your execs well-being - 1 turbine v 2?
IMHO wouldn't touch non-turbine aircraft for frequent business use if you're after 4/5 seater with room to spare.
Best advice is to go and speak to the people who sign the cheques ie the owners. They will tell you what they actually cost to run. Pilots,mechanics,engineers and salesmen don't really know !
I m sure on PPrune you will be able to find someone who owns every conceivable type
I m sure on PPrune you will be able to find someone who owns every conceivable type
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Type of helicopter is probably not the question you need to answer until you really know if a helicopter will benefit your business. That can only be answered by thoughtful consideration of some other basics:
1) What value does it bring to the business? You must consider "soft" benefits such as time saved as well as $$$'s (and competitive agility, opportunity cost, and .....) But, you have to high level of support - to survive the bean-counters - if it's not a clear bottom line $$$ benefit. You've probably done that to an extent or you wouldn't have made the post in the first place, but you really need to quantify.
2) What is the best resourcing option? To answer question #1, you have to know your costs, which can be largely dependent on buy vs. lease, managed vs. in-house or contract, etc. This also requires you to assess your specific requirements rather closely.
As you are answering the above, you'll slowly be able to determine which helicopter to purchase (or lease or rent).
NBAA (I was a member last year) has a considerable amount of helpful online resources. I'm sure there are others, but here is a link to their "Aircraft Resourcing" stuff, including a comparision chart of costs, benefits, etc.
http://www.nbaa.org/@@wAOoAwe0OwED/aro/
*EDIT: Be sure to download the spreadsheet on the right side of the page *
It's not helicopter specific but does include helicopters as much of there membership are corporate rotorcraft operators. It's probably worth the price of admission just to get to the "members only" resources while you sort through the "to fly or not to fly" question. More so if your business chooses to get into a helicopter.
Good luck!
1) What value does it bring to the business? You must consider "soft" benefits such as time saved as well as $$$'s (and competitive agility, opportunity cost, and .....) But, you have to high level of support - to survive the bean-counters - if it's not a clear bottom line $$$ benefit. You've probably done that to an extent or you wouldn't have made the post in the first place, but you really need to quantify.
2) What is the best resourcing option? To answer question #1, you have to know your costs, which can be largely dependent on buy vs. lease, managed vs. in-house or contract, etc. This also requires you to assess your specific requirements rather closely.
As you are answering the above, you'll slowly be able to determine which helicopter to purchase (or lease or rent).
NBAA (I was a member last year) has a considerable amount of helpful online resources. I'm sure there are others, but here is a link to their "Aircraft Resourcing" stuff, including a comparision chart of costs, benefits, etc.
http://www.nbaa.org/@@wAOoAwe0OwED/aro/
*EDIT: Be sure to download the spreadsheet on the right side of the page *
It's not helicopter specific but does include helicopters as much of there membership are corporate rotorcraft operators. It's probably worth the price of admission just to get to the "members only" resources while you sort through the "to fly or not to fly" question. More so if your business chooses to get into a helicopter.
Good luck!
Last edited by Cross-eyed; 30th Apr 2005 at 02:45.
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Airline guy giving advice on helos be careful. Many fixed wing drivers think you can stop at 6000 feet directly above a parking lot and descend vertically down to your spot in the middle of a large city.
There are many laws concerning where you could or could not land and NO, you cannot descend vertically from 6000 feet. Make sure you are precise about where and how you perceive you would use it and run that past guys who operate helos and know your local area.
There are many laws concerning where you could or could not land and NO, you cannot descend vertically from 6000 feet. Make sure you are precise about where and how you perceive you would use it and run that past guys who operate helos and know your local area.
(1) There are various aviation consultants out there who are actually very good at this sort of analysis, and you could do worse than having one through the door to look through your books and do some sums. To find somebody appropriate I'd take a look at BAAC in the first instance.
(2) In the first instance, rent! Go to a reputable (sic) helicopter rental operation and set up an agreement for a few months. Use them, keep a close eye on costs and benefits, then have your own beancounter go through these and do an analysis of cost .v. benefit for you. Then have your helicopter operations consultant moderate that for the actual cost of owning.
(3) Sometimes you just know you're going to do something anyhow! But, you need to do (1) and (2) first so that you've a fighting chance of explaining this huge expenditure to your shareholders.
(4) Don't forget the halfway house - fixed wing to local airports + renting cars locally. It may be the better option - I don't know, for the simple reason that I don't know your business, and anyway (although it's too far out of my field to get involved) I'm one of these expensive consultants who charges for advice beyond a certain low level.
G
(2) In the first instance, rent! Go to a reputable (sic) helicopter rental operation and set up an agreement for a few months. Use them, keep a close eye on costs and benefits, then have your own beancounter go through these and do an analysis of cost .v. benefit for you. Then have your helicopter operations consultant moderate that for the actual cost of owning.
(3) Sometimes you just know you're going to do something anyhow! But, you need to do (1) and (2) first so that you've a fighting chance of explaining this huge expenditure to your shareholders.
(4) Don't forget the halfway house - fixed wing to local airports + renting cars locally. It may be the better option - I don't know, for the simple reason that I don't know your business, and anyway (although it's too far out of my field to get involved) I'm one of these expensive consultants who charges for advice beyond a certain low level.
G
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Getting a rough idea of viability is not that difficult. First thing to understand is that the cost of increasing benefits rises exponentially and the real issue is where you want to draw your own line.
You need to be clear where you want to travel to and from. For helicopter to be the logical choice, subject to cost, it needs to be much the quickest. That means (a) you must be able to take off and land at (or within a few miles of) the sites you want to use, (b) small/medium airfields are some distance away, and (c) distance is not excessive for heli's relatively slow speed; eg more than say 200 miles.
Let's assume it's a yes so far. The starting point would be a say £100k Robinson R22 with just 2 seats, but that is highly unlikely to be practical unless it is only necessary to take one pax with a folding briefcase, in daylight in good weather.
So you need to think about how many are travelling. Chances are though it is just 1/2/3 pax - in business, few trips need to be more than this. Will it be expected to carry normal luggage? If not, and you want to transport up to 3 people with minimal luggage, then consider a £150k - £300k Robinson 44 or Hughes 500. If you do need luggage space, and this is normally the case, you can rule these out and turn your thoughts to a Bell Jet Ranger (206) (4/5 seats), Eurocopter EC120 (4/5 seats) or single Squirrel, AS350, (5/6 seats). Price bracket now starts at £250k for a reasonable 206, through £350k for an older AS350, £500k for newish EC120 and up to £1m for newish AS350.
This is probably the area you will need to consider closely and where most biz heli ops start. Assume running costs, excluding (i) interest on capital (ii) (modest) depreciation, (iii) pilot, of £60k - £100k per year, based on typical 250 hours usage. Total realistic annual running cost - probably around £150 - £200k.
Now for the majority of your requirements this will do fine, but everyone, particularly the pax, will need to understand that say 5 - 20% of trips will be delayed or cancelled because of poor weather - low cloud mainly. Flying at night also adds significant risks and is probably also a no-no.
To reduce the chances of delays/cancellations and fly happily at night you need an IFR twin, and the Twin Squirrel AS355 (5/6 place) or Agusta 109 (6/7 place) are your next options. Prices from £500k for an older AS355 or A109 through £1m - £1.5 for a newish AS355 to £2m for a similar A109. Twins are also generally required to be permitted to land in congested areas, like towns.
Assume running costs, again excluding (i) interest on capital (ii) (modest) depreciation, (iii) pilot, of £100k - £150k per year, based on typical 250 hours usage. Total realistic annual running cost - probably around £300k.
So you pay a lot more for an IFR twin, but you do also get the highest levels of safety, for a variety of reasons, and many are prepared to pay a lot for this and indeed some executives insist on twin only. There is also the issue of perceived safety.
Now at this point, having kind of assumed that one could get IFR twin capability for £100k per year, most interest fades away, at least until the business case builds again and the costs are accepted - proving justification is difficult.
I should stress all the above numbers are off the top of my head, but should be ball park enough to decide what you want to do, and not waste a lot of everyone's time looking at the detail, which is only necessary once the company is pretty sure it wants to go ahead, in order to choose the right specific aircraft. There is a huge amount to consider and using a well respected heli consultant will be money well spent.
Rental is certainly a good way to evaulate operational viability and for many is the most sensible way forward anyway, but it does depend on having a suitable operator and heli reasonably close by, otherwise positioning costs add up quickly and may well mean that you are paying for say 50% more hours flying than you are actually travelling in.
There is also the potential of lease-back on some aircraft, but again get careful advice on this. Certain aircraft, eg B206, A355 are much better for this than others.
I'm sure there will be many other views on all of this but hope this info is of some use to anyone considering the big picture of the viability of a company helicopter.
Let us know what you end up deciding!
You need to be clear where you want to travel to and from. For helicopter to be the logical choice, subject to cost, it needs to be much the quickest. That means (a) you must be able to take off and land at (or within a few miles of) the sites you want to use, (b) small/medium airfields are some distance away, and (c) distance is not excessive for heli's relatively slow speed; eg more than say 200 miles.
Let's assume it's a yes so far. The starting point would be a say £100k Robinson R22 with just 2 seats, but that is highly unlikely to be practical unless it is only necessary to take one pax with a folding briefcase, in daylight in good weather.
So you need to think about how many are travelling. Chances are though it is just 1/2/3 pax - in business, few trips need to be more than this. Will it be expected to carry normal luggage? If not, and you want to transport up to 3 people with minimal luggage, then consider a £150k - £300k Robinson 44 or Hughes 500. If you do need luggage space, and this is normally the case, you can rule these out and turn your thoughts to a Bell Jet Ranger (206) (4/5 seats), Eurocopter EC120 (4/5 seats) or single Squirrel, AS350, (5/6 seats). Price bracket now starts at £250k for a reasonable 206, through £350k for an older AS350, £500k for newish EC120 and up to £1m for newish AS350.
This is probably the area you will need to consider closely and where most biz heli ops start. Assume running costs, excluding (i) interest on capital (ii) (modest) depreciation, (iii) pilot, of £60k - £100k per year, based on typical 250 hours usage. Total realistic annual running cost - probably around £150 - £200k.
Now for the majority of your requirements this will do fine, but everyone, particularly the pax, will need to understand that say 5 - 20% of trips will be delayed or cancelled because of poor weather - low cloud mainly. Flying at night also adds significant risks and is probably also a no-no.
To reduce the chances of delays/cancellations and fly happily at night you need an IFR twin, and the Twin Squirrel AS355 (5/6 place) or Agusta 109 (6/7 place) are your next options. Prices from £500k for an older AS355 or A109 through £1m - £1.5 for a newish AS355 to £2m for a similar A109. Twins are also generally required to be permitted to land in congested areas, like towns.
Assume running costs, again excluding (i) interest on capital (ii) (modest) depreciation, (iii) pilot, of £100k - £150k per year, based on typical 250 hours usage. Total realistic annual running cost - probably around £300k.
So you pay a lot more for an IFR twin, but you do also get the highest levels of safety, for a variety of reasons, and many are prepared to pay a lot for this and indeed some executives insist on twin only. There is also the issue of perceived safety.
Now at this point, having kind of assumed that one could get IFR twin capability for £100k per year, most interest fades away, at least until the business case builds again and the costs are accepted - proving justification is difficult.
I should stress all the above numbers are off the top of my head, but should be ball park enough to decide what you want to do, and not waste a lot of everyone's time looking at the detail, which is only necessary once the company is pretty sure it wants to go ahead, in order to choose the right specific aircraft. There is a huge amount to consider and using a well respected heli consultant will be money well spent.
Rental is certainly a good way to evaulate operational viability and for many is the most sensible way forward anyway, but it does depend on having a suitable operator and heli reasonably close by, otherwise positioning costs add up quickly and may well mean that you are paying for say 50% more hours flying than you are actually travelling in.
There is also the potential of lease-back on some aircraft, but again get careful advice on this. Certain aircraft, eg B206, A355 are much better for this than others.
I'm sure there will be many other views on all of this but hope this info is of some use to anyone considering the big picture of the viability of a company helicopter.
Let us know what you end up deciding!
Better red than ...
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As an personal rule of thumb:
If you are in the UK;
and you mostly go to one city in a day for business;
and you are either based in London or go from a city to London;
then the train is quicker (taking into account the weather risk, general difficulties with places to land in London area, etc).
If you go to several places in a day and have places to land (your factory grounds);
or you go to places other than on main rail routes;
then there may be some benefit if 'time is of the essence'.
However, the cost of time has to be weighed up against the cost of the machine (say £35K/ year for maintenance on a twin Sq plus pilot costs plus mortgage and asset finance and unexpecteds) -v- hiring more staff.
Suits absolute experts (jockies/ racing drivers/ top lawyers/ anybody who charges big rates by the hour [!!!!! - which reminds me of a funny story of a heli flight to Monaco once...] but rarely will actually pay in the UK context.
All IMHO (and financial analysis)
h-r
Looking back, that was almost in COBOL was'nt it?
If you are in the UK;
and you mostly go to one city in a day for business;
and you are either based in London or go from a city to London;
then the train is quicker (taking into account the weather risk, general difficulties with places to land in London area, etc).
If you go to several places in a day and have places to land (your factory grounds);
or you go to places other than on main rail routes;
then there may be some benefit if 'time is of the essence'.
However, the cost of time has to be weighed up against the cost of the machine (say £35K/ year for maintenance on a twin Sq plus pilot costs plus mortgage and asset finance and unexpecteds) -v- hiring more staff.
Suits absolute experts (jockies/ racing drivers/ top lawyers/ anybody who charges big rates by the hour [!!!!! - which reminds me of a funny story of a heli flight to Monaco once...] but rarely will actually pay in the UK context.
All IMHO (and financial analysis)
h-r
Looking back, that was almost in COBOL was'nt it?
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I have to agree with Ghengis, especially on the point of if you want to fly to anywhere airport to airport it will be much cheaper and probobably quicker by fixed wing.
Headsethair.
You have obviosly not flown in or around the london area. Singles are resticted to designated heli lanes whereas twins can route direct!!
Regards. JB
Headsethair.
You have obviosly not flown in or around the london area. Singles are resticted to designated heli lanes whereas twins can route direct!!
Regards. JB
Senis Semper Fidelis
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Brown bear,
If the guys who are tied down by spending a lot of time travelling are paid more than £100k Pa, and if they spend more than 30% of their time travelling it becomes simple maths to make any sort of move, however you really will need to know where they are travelling to and from because location and time are always dependant entirely on the weather situation, and in the Uk we don't really have two days that are the same, rough weather will stop most helicopters, that also has to be part of the thought process on costs, for once stopped and weathered in your calculations will go to Rat Sh** very quickly.
Peter R-B
Vfr
If the guys who are tied down by spending a lot of time travelling are paid more than £100k Pa, and if they spend more than 30% of their time travelling it becomes simple maths to make any sort of move, however you really will need to know where they are travelling to and from because location and time are always dependant entirely on the weather situation, and in the Uk we don't really have two days that are the same, rough weather will stop most helicopters, that also has to be part of the thought process on costs, for once stopped and weathered in your calculations will go to Rat Sh** very quickly.
Peter R-B
Vfr
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JB, I spend my life flying "around the London area." And very expeditiously in a single.
Not going to get into a spat over this, but what EEDSL said was "Twin-engined enables you to go straight line in more cases than not."
Whilst I agree that twins can route straight out on certain routes in The Specified Area, these are a minimal advantage and don't justify such a sweeping generalisation.
This string was started by someone seeking good advice - the least we can do is make sure we tell it like it is.
Not going to get into a spat over this, but what EEDSL said was "Twin-engined enables you to go straight line in more cases than not."
Whilst I agree that twins can route straight out on certain routes in The Specified Area, these are a minimal advantage and don't justify such a sweeping generalisation.
This string was started by someone seeking good advice - the least we can do is make sure we tell it like it is.
headsethair,
Could EEDSL be alluding to a 'single engine mentality' whereby you divert around any substantial built-up area?
A Twin might afford you the luxury of true 'straight line' tracks.
Just a thought,
B73
Could EEDSL be alluding to a 'single engine mentality' whereby you divert around any substantial built-up area?
A Twin might afford you the luxury of true 'straight line' tracks.
Just a thought,
B73
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I would like to add my own bit in here
I have my own business and run an R44. Most of the time its for me and a couple of other staff around the UK, from site to site. If all you need to do is get there quickly (I did 9.30 from Milton Keynes to Plymouth, then up to the Bristol area today and was back home before 5pm) then a heli is for you. My time costs money.
The upside is that I estimate I get there about 3 times quicker than by car, depending on route and location of landing, which means I can fit more business in in a day.
Downside is that the weather is often appauling, so you tend to push the limit a little, although a few terrifying experiences make humble you and teach you laods (if they don't kill you). The pressure is alwas on in business to get there. You have to really be strict with yourself in particular with poor weather.
The other issues are always cost - whatever you think its going to be - double it at least. The maintenance is a;ways at the wrong time, and the movements to get it there are a pain.
Finally, you allways have clients that think you are charging too much and are too rich becasue you jave a heli. That is boll**cks - if you have a heli - YOUR ARE POOR
Jon P
I have my own business and run an R44. Most of the time its for me and a couple of other staff around the UK, from site to site. If all you need to do is get there quickly (I did 9.30 from Milton Keynes to Plymouth, then up to the Bristol area today and was back home before 5pm) then a heli is for you. My time costs money.
The upside is that I estimate I get there about 3 times quicker than by car, depending on route and location of landing, which means I can fit more business in in a day.
Downside is that the weather is often appauling, so you tend to push the limit a little, although a few terrifying experiences make humble you and teach you laods (if they don't kill you). The pressure is alwas on in business to get there. You have to really be strict with yourself in particular with poor weather.
The other issues are always cost - whatever you think its going to be - double it at least. The maintenance is a;ways at the wrong time, and the movements to get it there are a pain.
Finally, you allways have clients that think you are charging too much and are too rich becasue you jave a heli. That is boll**cks - if you have a heli - YOUR ARE POOR
Jon P
