Surviving to Thriving

Seven years ago, Skies‘ sister magazine, Vertical, visited VIH Aviation Group (VIH) in Victoria, B.C. At that time, the company was targeting a very aggressive five-year expansion plan, operating busy VFR and IFR fleets with a number of new helicopters on order. An additional six Sikorsky S-92s were being added to the Cougar Helicopters fleet, a wholly-owned subsidiary of VIH. International business prospects also looked good, with Sikorsky S-61s headed to Australia on firefighting contracts and others to Peru to service booming oil exploration activities. VIH was also expanding into China and the U.S. Gulf Coast. 

Then came the financial crisis of 2008. The world economy stumbled amidst daily reports of failed financial institutions, corporate greed and fraud. The resource companies, particularly those in the lumber and mining industries, scaled back their activities and financial institutions hunkered down. 

“Our major finance company changed its mind about providing financing to aviation companies. Many of the executives who were pro-helicopter were dismissed, and we had to resolve some serious money issues in order to continue,” Ken Norie, president and CEO of VIH Aviation Group, told Skies recently in an exclusive interview. “We started to decrease our VFR operation by selling bases and assets to other operators, and concentrated on Cougar Helicopters and our international markets.”

Over the next few years, VIH continued restructuring by reducing its fleet of leased helicopters and selling many of its light and intermediate helicopters. Today, the company’s fleet of Russian Kamov Ka-32A11BC helicopters has become the main focus of the VFR operation, due to their competitive heavy lift capabilities. The Kamov continues to be a sought-after commodity in both domestic and international markets.

In 2002, VIH purchased the Victoria Shell Aerocentre, which had been partially owned by the B.C. Government and was home to the provincial air services department. When the province closed its aviation department, it also sold its share in the Aerocentre. VIH expanded by renting hangar and office space in the facility, before it eventually purchased the complex. The Aerocentre is now home to the VIH Group corporate headquarters. 

VIH created YYJ FBO Services, which now encompasses the entire 90,000-square-foot Shell Aerocentre and provides a full service, top-end FBO with all appropriate amenities. Some office space is leased out to customers such as Canada Customs and Transport Canada.

Located next door to the FBO is the VIH Aerospace Division, which manufactures helicopter-specific components and provides complete repair and overhaul services for a wide variety of helicopters. Projects have included the S-92 search and rescue configuration for the Cougar SAR helicopter, plus complete refurbishment and upgrades to S-92s and S-61s. VIH Aerospace has also designed and certified ferry fuel tanks for the S-92, which take just minutes to install or remove, and can add up to 300 nautical miles to the helicopter’s range. Bristow Helicopters is a major customer, as well as other S-92 operators. Plans are underway to replace the aging VIH Aerospace building with a new, larger facility.  

When Skies visited VIH, a Bell 407 was undergoing a complete refurbishment, a Kamov Ka-32 was being prepped for repairs, and a nearly new VVIP (Very Very Important Person) S-92 executive helicopter—formerly owned by the late Rev. Sun Myung Moon, founder of the Korean-based Unification Church-—had been imported. Painted cotton candy pink and white, the helicopter is certainly noticeable! VIH acquired it for offshore SAR and passenger missions. The VIP interior is being removed and the helicopter will be repainted and reconfigured prior to its first flight. 

In late summer 2014, Cougar Helicopters announced it had won a new, long-term contract to continue transporting workers to and from Newfoundland’s offshore oilfields. Cougar is building a new, expanded facility at St. John’s International Airport as part of the deal. Mike Reyno Photo

Internationally, VIH continues to grow through its Cougar Helicopters subsidiary. It has completed passenger and SAR operations in Greenland, operated long-term firefighting contracts in Australia, and built a new 38,000-square-foot facility to service offshore operations in Galliano, La. 

More recently, a new SAR facility was opened in St. John’s, NL, where Cougar Helicopters operates a dedicated S-92 in support of a consortium of Grand Banks offshore resource companies. The S-92 is outfitted with a state-of-the-art SAR configuration and has a 20-minute launch response capability every day, around the clock. 

VIH has reduced its VFR fleet to four Ka-32A11BC helicopters, which provide heavy-lift and firefighting services both domestically and globally. Customers are in the resource, hydro, construction and forestry industries. According to Norie, activities in these sectors have now exceeded pre-2008 levels.

Recent expansion has necessitated new partnerships with two other helicopter companies, Bristow Helicopters and CHI Aviation.

In the fall of 2012, Bristow Group Inc., of Houston, Texas, purchased a 40 per cent financial interest in Cougar Helicopters. Bristow currently leases eight S-92s to Cougar. The relationship provides Cougar with additional helicopters and allows the company to access Bristow’s inventory of S-92 parts. 

Also in 2012, CHI Aviation (formerly Construction Helicopters Inc.) of Howell, Mich., purchased and assumed the operation of U.S.-based VIH Cougar Helicopters, an operator in which VIH had a minority share. CHI is a long-term specialist in offshore helicopter operations. VIH owns and leases facilities and helicopters to CHI for their operations in the Gulf of Mexico.

Norie also discussed more recent news from the East Coast. “In August 2014, Cougar was awarded a new multi-year contract for offshore passenger and SAR services from its St. John’s base. The contract commences in March 2016, and is for up to nine S-92s, with a fixed term of six years, plus options, up to a total of 10 years,” he explained. 

VIH supports facilities in three corners of North America. With no direct flights between Victoria and Galliano or St. John’s, it seemed logical to invest in a corporate jet to move staff between the three locations as efficiently as possible. 

In 2007, VIH purchased a Hawker 800SP, primarily to transport personnel between Victoria and its two main bases at St John’s and Galliano. To offset the operating costs, VIH created VIH Execujet as a commercial charter company operating under Transport Canada CAR 704 regulations. The Hawker was the first aircraft in the fleet and is equipped with four club seats, one single seat and a divan. The cabin is also capable of holding a stretcher and supporting equipment for medevac services. The Hawker is used mainly for domestic and North American destinations, with a range of 4,925 kilometres (3,060 miles).

VIH Execujet also operates a Challenger 604. “Our former financial institution ended up with it, and they contacted us with an offer to buy it at a very reasonable price,” said Norie. The aircraft was purchased in 2009 and is equipped with six club seats and a four-place divan. Cabin furnishings include a hot and cold galley and the latest satellite communications telephones, Internet services and an assortment of video displays and passenger comfort systems. The 7,500-kilometre (4,660-mile) range allows the 604 to be used for both trans-continental and trans-oceanic charters. 

Located at VIH’s Victoria Airport Shell Aerocentre, Execujet is the only Vancouver Island-based jet charter service offering aircraft of this size and quality. 

“Most of our local customers are senior executives and residents of Victoria and Vancouver Island, who value their privacy and prefer the convenience of travelling in a corporate aircraft,” explained Gary McCoey, VIH director of business development. “We also have a significant amount of business from both Vancouver and Alberta.” 

A key Execujet advantage is the company’s ability to tap into many of the support services developed by other VIH Aviation Group departments.

“Our operations centre in St. John’s handles flight following and dispatch requirements for our charter aircraft,” continued McCoey. “Maintenance and engineering support comes from our VIH Aerospace Division, and the aircraft are handled and kept at the VIH-owned YYJ FBO Services, Shell Aerocentre.” 

Utilizing the existing resources of the VIH parent company translates into lower operating costs and proven services; it has also opened the door for new business possibilities for Execujet. 

“We have plans to increase our charter fleet to better serve our growing customer base, and would like to expand further by developing aircraft management services for customers,” concluded McCoey. “Going forward, we plan to leverage the solid foundation we have built with the CAR 704 operation, by offering new or existing business aircraft owners a fully managed service for their aircraft. We can also provide guidance and maintenance support for aircraft owners to help them comply with all the various Transport Canada regulations facing the owner of a private business jet.” 

Execujet personnel would assist aircraft owners in meeting all regulatory requirements, including operations, maintenance and flight crews. And, if corporate customers were interested, Execujet could charter out their aircraft during down times to reduce overall operating costs. 

When Vancouver Island Helicopters (now simply VIH) was incorporated nearly 60 years ago as a small VFR helicopter company, it’s doubtful that any of the original owners would have envisioned it growing into the global, multi-service business it is today. After surviving tough economic times beginning in 2008, the company has emerged on a solid footing, ready for further diversification and the opportunities it will bring.