Private air-rescue foundation provides new financing model

 - February 6, 2007, 5:58 AM

Swiss air-rescue provider Rega is ready to help any similar organization that would like to set up a membership-based financing plan. In a presentation at the Geneva Heli Trade show this fall, Rega spokesman Walter Stünzi explained how the private foundation has relied successfully on donors for three decades. An unusual case now, Rega’s system could yet become a model as it has many advantages over other financing systems, he said.

Some 1.8 million of the seven million Swiss are Rega donors. As donors, they become members and are rescued at no charge if they need help and have no other insurance. In this way, Rega appears similar to an insurance company. But the organization’s social department cancels invoices for those who have no insurance, who are not donors and who cannot pay. Rega also, therefore, plays the role of charity organization.

Approximately 57 percent of Rega’s $96 million in revenues came from donations last year. The remainder comes mainly from flight operations. The average donation is close to $40. “Many pay for few,” Stünzi said, although “few” is a modest characterization of the 13,732 missions the organization completed last year. In addition to people, Rega also rescued 1,000 cows, a routine mission in Switzerland’s mountainous landscape. Rega operates 13 helicopters (eight Agusta A109s and five Eurocopter EC 145s) and three Bombardier Challenger 604s. It employs 270 people at its 13 bases around the country.

Stünzi explained the benefits of Rega’s financial strategy. “A significant advantage of such a wide membership is the identification feeling for Rega among the general public,” he noted. Low individual contributions are another benefit, as is political independence. “If we want to renew part of our fleet, we do not depend on a government that can be subject to lobby pressure,” the spokesman explained. And decision-making is more flexible.

Stünzi, however, did recognize some drawbacks of Rega’s financial strategy. First, there is the risk of a domino effect if the public’s perception of the organization changes. Donors might choose to stop contributing to a service they hear criticized. In addition, while Rega’s expenses are fixed, its income is not secured. And insurance companies sometimes see Rega as a competitor.

However, officials at the Swiss air-rescue service see their formula as the best one. “Financing by a government secures money over the medium or long term; it also makes air rescue affordable for everyone,” Stünzi noted, “but slow-moving official channels can impede decision-making and the political climate can have an influence.” Last, but not least, the service depends on the current status of the treasury.

Financing through sponsorship, using the helicopter as advertising space, eliminates these disadvantages. If combined with a membership formula, it offers the possibility of crossed marketing with the sponsor’s customers. But such a sponsor can easily withdraw, Stünzi said, and the market for replacement is usually limited.

Another alternative is to set up air rescue as a commercial service, which quickly reveals the true costs. But the extremely high charges make such air rescue far from
a social service, Stünzi noted. “Pure EMS service cannot be a business,” Stünzi concluded, emphasizing that Rega people are convinced their financing model is
the best compromise.