Perks of Doing Business in Louisiana
It’s been a tough, cold and long, long, long winter in Montreal this year. Needless to say it was a welcome trip to fly to Louisiana to see my friends at the major helicopter operators in the Gulf of Mexico. In meetings with Bristow, PHI and ERA I was privileged to get an overview of how operations have improved with a stabilizing oil price at the 65$+/barrel level, from 40$/barrel two years ago.
Seems like volatility is out of the air somewhat. Moreover, I was told that more efforts are being put into diversifying helicopter operations and revenue to soften the blow of future dips. One example of geographic diversification is PHI’s recent acquisition of HNZ from CHL. It is also public knowledge that EMS (Emergency Medical Service) is another axis of diversification.
My four ideas and aviation solutions for oil and gas helicopter operators
1. Sharing risk of operations with maintainers / OEMs:
a. Leasing options on complete helicopter & aircraft, components or engines with shared risk clauses (adjusted rates and operating hours related to oil prices)
b. Hourly maintenance plans (Power-by-the-hour) with no minimal flight hours and options to “borrow back” accrued helicopter maintenance funds to help with operating cashflow
2. Continued activity diversification with alternate uses and geography (probably easier said than done…)
3. Upgrade rather than replace fleet policies (requires customer education / incentives)
a. Improved safety and performance through STCs
b. Better amortization of assets
c. Better/larger common used helicopter parts market, and MRO network
d. Less OEM dependency
4. Fleet simplification (requires customer education / incentives)
After my meets with operators I also got to meet great teams at Arrow Aviation and PHP. Aircraft maintenance and distribution are alive and well. In good part, as a result of the majors stabilizing. Over my trips there I noticed that Lafayette in general is quite an integrated economy. Neighbours sway together according to the Price of oil and Wins by the LSU Tigers and the UL Ragin Cajuns!
So between the ongoing businesses and delightful conversation with the professionals I knew, I got to meet new teams and benefit from the more than welcome heat and sunshine that is so familiar to the great State of Louisiana and its warm people. In closing, I would also highly recommend the Café’ Vermilionville in the heart of Lafayette.
It serves up a fine local cuisine, of which you need to taste the slightly spicy turtle soup and the creamy coco snapper. The owners truly reflect the charm and heritage of the area and the historic building they own and manage with distinction. In sum, it was a great trip to an improving market, coupled with a warm taste of business in Louisiana.