The world recession has been hard on helicopter operators, particularly those serving the natural resources sector, where demand has dropped. Quebec is one of those helicopter markets that is heavily dependent on natural resources clients, so it comes as a surprise that the province operators seem to be doing relatively well.
In fact, business has been really good, said Jean-Yves Lacasse. He is co-owner of Heli-Boreal in Sept-Iles, on Quebec North Shore. Heli-Boreal flies Eurocopter AS350 BA,
B+ and B2 AStars.
Between Hydro-Quebec and mining, the market has been pretty good, agreed Oliver Talbot; assistant director of operations with Heli-Excel. Also based in Sept-Iles, Heli-Excel operates AStar 350s (B, BAs, BA+, B2 and D2), plus the Eurocopter twin-engine AS355 and Bell 205A-1+ and 214 B-1.
I’d say that 2011 was an average year for us, which is excellent given the state of the economy, said Denis Simard. He is VP operations and marketing with Heli-Inter, headquartered in Malarctic in northwestern Quebec (near the Ontario border), with a base at the St-Honore airport in the Saguenay Lac-Saint-Jean region. Heli-Inter flies AStar 350s (BA, BA+, B2 and D) and Bell 205A1 and 206 LongRangers.
All told, the Quebec helicopter industry has been doing quite well, summarized Fred Jones, president and CEO of the Helicopter Association of Canada (HAC). Our Quebec members have been sending us some pretty positive reports on how sales have been going, and their prospects for the year ahead, which look promising.
Why the Good News?
For Quebec helicopter operators, the softness in the natural resources sector has been offset by Hydro-Quebec massive electricity-generating construction projects in the James Bay region. Currently, work is winding up on the utility Eastmain-1-A/Sarcelle/Rupert project. It is an effort that has required the construction of huge hydroelectric generators, holding lakes and spillways; plus power transmission lines, weirs and dams.
Since the James Bay region is both remote and sparsely inhabited, much of Hydro-Quebec supplies and people must be brought in by helicopter. This has proven to be a boon to rotorcraft operators, who have been kept busy for years. And even though the project is nearing completion, there is still much work to be done: There are still supplies to be moved, and environmental follow-ups to be done, said Simard. These, plus the ongoing need to supply these sites, will keep us working for Hydro-Quebec for the foreseeable future.
Mining also remains an important source of revenue, says Heli-Excel Talbot. In fact, it accounts for about 40 per cent of our income. His company and other Quebec helicopter operators provide the fastest and easiest way for mining companies to conduct surveys, move drilling equipment (used for mineral exploration), and get personnel in and out of remote sites.
The only downside: Junior mining companies (those focused on exploration, not mineral mining) are having a hard time getting investment in the current economy, said Heli-Inter Simard. When they get less money, we get less business. The good news is that the Chinese are starting to buy into Canadian mining companies and that money is helping to fund exploration.
Beyond Hydro-Quebec and mining, Quebec helicopter operators rely on government contracts to help their bottom lines. Wildlife management accounts for some of their charter flights. For instance, we just helped conduct an aerial caribou survey for Quebec Ministry of Natural Resources and Wildlife, said Heli-Boreal Lacasse. We weren’t alone in doing this. Four to five helicopter operators took part province-wide.
The final major contributor to the Quebec helicopter industry revenues is forest firefighting. From a financial standpoint, this sector is a wildcard: the amount of work operators get from aerial fire suppression depends entirely on how many fires occur during the summer months.
We never know how many firefighting hours we will be logging until the season gets underway, Lacasse told Canadian Skies. It all depends on the weather and chance. We just have to wait and see.
To date, Quebec helicopter operators have done a good job of getting through the recession. But weathering the economic storm is not their only challenge. They also have to cope with the rising cost of doing business, at a time when banks are still leery about lending money. This means that operators have to manage their cash flows carefully, buying aircraft as they can afford to.
The fact that OEMs are telling us that equipment sales are increasing in Quebec is a good sign, said HAC Jones. It a tangible indication of how the industry is doing.
Climbing fuel costs are a constant problem for operators; costs that have to be passed on to customers. This flow-through results in higher prices, at a time when more players are getting into the market.
The result is that there is stiff competition for work, with some companies undercutting the rest on bids, Talbot said. We do what we can to compete, but we have to maintain reasonable prices to pay our bills and continue to provide safe, efficient service which is what attracts customers to us.
The one issue that seems to be dogging Quebec helicopter operators the most is staff: namely finding and keeping experienced pilots and mechanics. I am constantly hwwearing from our members about the difficulties they have in finding flight crews and maintenance people, said Jones. This is not a new problem we’ve been working on it for years but it remains a serious one. The current staff crunch is due to a mix of Baby Boomers retiring, the growing use of helicopters by customers, and stiff competition for experienced personnel by larger, urban-based operators with deep pockets.
The operators who spoke with Canadian Skies are fighting back by hiring young pilots with relatively few flight hours, and then doing everything they can to get those hours up fast. Wherever we can, we’ve got these people working overtime, said Talbot. The key is to find jobs where the clients are not demanding pilots with 1,000 or more hours. That our biggest stumbling block.
Our hope is that by helping these pilots and mechanics get established, they will be loyal to us, added Lacasse. This is why we are doing whatever we can to advance their careers.
Despite these challenges, Quebec helicopter operators are boldly moving forward into the future.
A case in point: Heli-Inter which belongs to a group of Canadian helicopter firms that includes Mustang Helicopters and Helicraft is building a brand new headquarters in St-Hubert, Que. We are expanding our 12,000-square-foot existing hangar to add another 18,000 square feet, said Simard. This will be a full maintenance/avionics facility with a Bell service centre, and a VIP FBO for helicopter owners.
Why take the risk? We believe in investing in our business, Simard replied. Besides, given that our combined fleets total nearly 100 helicopters, it makes sense to do our own work in house, rather than contract it out.
On a larger scale, Simard is hopeful about his industry future. We are anticipating massive investment by our provincial government in the mining sector, which will help us deal with the drop in Hydro-Quebec work, he said.
Talbot is also optimistic: We think that all of the mining projects that are going ahead in northern Quebec and Ontario will be good for our business.
Quebec helicopter operators are skilled at making the best of their opportunities, concluded Jones. That why we expect them to keep prospering in the year ahead, despite the world economy.
James Careless writes on aerospace issues for Canadian Skies, Vertical, Rotorhub and Aviation Maintenance magazines. He is a two-time winner of the PBI Media Award for Editorial Excellence.