© Christophe Kermarrec

Despite an economic and financial improvement observed on both sides of the Atlantic in recent months, the health of aerial work and public transport companies that operate helicopters, in France, remains fragile. In autumn 2010, new restrictive regulations, poorly received by the community of operators, added to some of the lingering effects of the 2008 economic earthquake. So, when will the crisis be over? By François Blanc 

Starting in autumn 2008, several French helicopter transport companies saw their flight schedules lighten alarmingly. The observation was especially true for those who base all or part of their activity on on-demand flights, whether for business or tourism. For others, who can count on solid contracts (not affected by the slump that was felt by most western economies), flight activity has remained more stable. This is particularly true for the French branch of the Italian group Inaer International. As explained by its General Director, Guy Rocher, « The impact of the financial crisis has not affected all operators, nor perturbed those that it has affected in the same way. In the case of Inaer France, its activity is 95% based on government contracts, whether medical transport – we don’t handle any other public transport – aircraft rentals for light aircraft pilot training for the army (Alat) in Dax or maintaining operational conditions for the helicopters of the civil protection and police force – fifty aircraft in all. » In fact, this synopsis refers to a strategic choice made by Inaer International. « We absolutely can not accept to have aircraft waiting for missions, » says Guy Rocher. Still, Inaer France’s  increased turnover, which is the result of some recently signed contracts, has not prevented a certain erosion of margins. « The European regulations add significant overhead costs that weigh down on companies like ours. And yet it would be inappropriate in times of economic recession, to incorporate these cost increases into our prices, » explains the General Director of Inaer France. 

Decrease in residual value 

© Christophe Kermarrec

For other operators, wider exposure to the vagaries of the market economy has more significantly affected their balance sheets. It is a question, among other things, of corporate history, scope of activity and proportioning. Sometimes a shift in a company’s overall strategy took place even before the crisis. At Ixair for example, while the group, until recently, spread its competences as a helicopter professional among three distinct areas (pure exploitation, maintenance and training), the training branch was pruned before this sector suddenly hit the brakes in 2009. « In the training market, we ran up against competition from low fixed cost structures, » explains Laurent Safar, CEO of Ixair. Moreover, and because the operator also offers its customers airplane services (and that this segment has some hope of a possible recovery), certain resources had been deliberately reoriented and, it seems, just in time: « We were able to offset a declining market by integrating new airplanes and acquiring new customers, » summed up the CEO of Ixair. For helicopter activity, however, the future looks uncertain. With a reduction in turnover of around 30% between 2008 and 2009, the public transport activity has experienced a violent decline. But that’s not the end of it! The financial crisis has indeed been the origin of other undesirable consequences, including the decline in the residual value of fully owned helicopters. This is because, « The renewal of aircraft heavily influences results, » reminds Laurent Safar, who highlights that, « Aircraft put on the market at the right time sell well, unlike those that during times of financial weakness, even temporary, stay with their operators. » 

A hesitant climate 

Although structured differently, the French operator Azur Hélicoptère, has made similar observations to those of Ixair, regarding the public transport market. Michel de Rohozinski indicates that in 2009, the public transport component of his company experienced a decrease in turnover of about 25%. Located in Cannes, as well as at Lyon-Bron and in the Paris metropolitan area, he also finds that beyond the economic crisis that has wiped out many of his customers – including partners – « The helicopter’s image does fit in with the current climate …. » In his case, however, the training component incorporated into the company shows a positive trend. Still, the founder of Azur Hélicoptère does not see the future with optimism. Even less since the publication of a the decree of October 20, 2010 (see sidebar in this article) in the Official Journal … 

Another renowned enterprise on the French helicopter scene, Hélicoptères de France, analyzes the market in the same way, even if, for it also, the medical transport component (approximately 95% of its business in public transport, spread over seven bases in France) minimizes the effects of the crisis on its balance sheet. The event management sector, for the company, especially bicycle racing, including the Tour de France, has however maintained a satisfactory level, despite the migration of « Dakar » to South America – and therefore the loss of part of the contract with Amaury Sport Organisation (ASO). As for aerial work, supposed to be less dependent on market variations, it still suffered from a, « reduction in projects, especially in winter, » says Jean-Marc Genechesi, Air Operations Manager at HDF, who sees, « more hesitation from construction companies and local governments. » 

Indignation towards helicopters? 

Aside from the significant decrease in activity concerning emergency medical services in France (due to a decreasing rate of car accidents, which everyone welcomes), it is once again, the existence of reliable contracts (even if they are not necessarily eternal) that prevent an excessive fall in the volume of business, and remove the temptation, that occurs during severe recessions, to sell flight hours at low prices – in other words, without any profit. 

© Christophe Kermarrec

Yannick Métairie, General Director of Mont-Blanc Hélicoptères and President of the Syndicat National des Exploitants d’Hélicoptère (SNEH) which is an organization that unites helicopter operators, is well aware of all of these observations. First as an operator, since he confirms having, « felt the crisis through the cancellations of some clients who have suffered considerably, » and in his capacity as a knowledgeable player, revealing that, « All of the helicopters ordered from Eurocopter and delivered in recent months have arrived during a difficult period in the market for buyers who are used to speculating on their resale. The bubble that they have been maintaining has burst …, » and finally as a trade organization leader, he worries about the arrival of decree No. 2010-1226, « limiting helicopter traffic in high population density areas. » As far as the leaders of the SNEH are concerned, there is no doubt that this legislative text announces the death an entire segment of activity for their members. Moreover, the measure has been put forth in a time of economic crisis that has, over several months, already weakened many companies in this sector. « There was no real dialogue on the subject, » deplored Yannick Métairie, adding that, « This decree will create serious problems, particularly in terms of continued training for crews, » which are likely to have to conduct their training flights in areas that remain to be defined and require costly connections to accomplish. Not to mention the tourist flights, which no longer allowed with helicopters, « can still be performed with small airplanes! » indicates another manager at Mont-Blanc Hélicoptères who is as annoyed as incredulous. 

A market that is too fragmented 

Frederick Aguettant, owner and CEO of the company Aviaxess based in Paris and Toulon, is also among these professionals that decidedly can not explain the choices made by the French regulatory authority. The decree, denounced by all of the operators interviewed by Helicopter Magazine Europe as part of this investigation, comes into effect in the midst of a poor business environment, and for reasons which, on the merits, are lacking a clear explanation. « It is a signal of allegiance to the green electorate, » in the opinion of Yannick Métairie. Meanwhile, the stricter regulations join a long list of constraints that were already weighing heavily on operators’ balance sheets. « The administration is not helping us, » exclaims Frederic Aguettant. « The audits are increasing for those with an Air Operator’s Certificate. Today, an AOC is a real luxury! And we are of course charged for these audits without having the possibility to change the service provider …. » Moreover, like Laurent Safar of Ixair, who describes France as, « the number one tourist destination in the world, » the district of La Défense in Paris as, « the number one European business center, » and Eurocopter as the, « world’s leading manufacturer of helicopters, » while witnessing what makes him sick at heart: the elimination of the helicopter in tourism and business travel in the French skies, Frederick Aguettant turns, heartbroken, to the city of New York and reminds us that, « There, 200,000 tourists become helicopter passengers every year to discover the metropolis! » Back in the hexagon, the CEO of Aviaxess keeps his fingers crossed. The 2010 fiscal year will certainly not be as bad as that of 2009. But for how long will it be possible to continue? On-demand flights (airplane and helicopter) are at the heart of the company’s business. What happens during the next major economic crisis? « In France, we work in a market that is too fragmented. Here, despite the advantages that exist within the current situation, we can not consider the market as being mature. And ultimately, it is likely that we will see consolidation. Emergency medical service activity will be carried out by Spanish, Italian or Portuguese groups. For the rest, we will see in due time, » he says. 

In the absence of a clear outlook, French operators have armed themselves with patience. What is certain is that they seem unwilling to give up a profession that they are so passionate about …