Phoenix Heliparts serves market for MD500 support

 - May 3, 2010, 6:06 AM

A self-described “brotherhood” of three small but interrelated companies has moved in to shore up maintenance, modification, support, overhaul and parts availability for the approximately 450 MD500 series helicopters in the U.S. and abroad flown by its clients.

“What we do is typically something that the OEM would or should do,” said Tina Cannon, president of Mesa, Ariz.-based Phoenix Heliparts. “What we have seen from being in the market is that there is really a lack of synergy and support for the 500,” she said.

Phoenix Heliparts provides engineering, maintenance, modification and overhaul services. In 2007, it was acquired by Don Nichols and Ed Brown, the owners of Costa Mesa, Calif.-based Heli-Mart, a supplier of parts and components for the 500.

Heli-Mart also owns California Aero Com-ponents, a provider of overhauls and repair on MD500 series transmissions, tail-rotor gear boxes, swashplates and actuators. “Among the three companies, the only part that we cannot repair, overhaul or control is the main rotorhub; the factory is the only place that does that,” Cannon said. However, Heli-Mart stocks new and used, overhauled and exchanged rotorhubs.

“We are like a brotherhood working together,” said Nichols of the three companies.
Cannon runs Phoenix Heliparts with her husband, Darin, who founded the company and has extensive operation experience with the MD500 series. Darin Cannon credits this experience with helping expand the business. Last year it moved from a 14,000-sq-ft building to one almost triple that size. “We understand what the operator will experience and we can provide advice and solutions about installation packages. Another big advantage we have is our in-house engineers, who sit down with the customers so that they can customize the instrument panel or whatever other equipment they choose. And of course our number one advantage is cost; we are considerably less expensive than the OEM,” Darin Cannon said.

Phoenix Heliparts does both green completions of new MD500s and refurbishment and overhaul of existing ones.

It also provides popular modifications such as AFS filter barrier installation, aftermarket torque indicators, and engine trend monitoring equipment; pre-packages common repair solutions “off-the-shelf”; and has maintenance contracts with a variety of fleet operators of the type including the South Korean military. “We’re getting a lot of attention from the military market,” Tina Cannon said.

Nichols and Darin Cannon said MD’s decision to power down its Heritage Aviation completion and modification center last year also has driven business to Phoenix Heliparts. “It [Heritage] is not a functioning facility,” Darin Cannon said. AIN attempted to contact Heritage several times during normal business hours, but company phones were not answered. Independent industry sources told AIN that most Heritage employees were either laid off or reassigned to the company’s main plant in Mesa, Ariz., or a fuselage fabrication facility in Monterrey, Mexico. An MD executive confirmed these re-assignments.

As a result of MD’s actions at Heritage, “The customer comes to us and not to the OEM,” said Nichols. Last year Phoenix Heliparts did four green completions of new 500s and complete refurbishments of three existing ones. The Cannons said there is another reason their business is increasing: MD’s recent steep price increases for new helicopters and helicopter parts.

“These are substantial price increases and [MD hasn’t] justified them to us or their customers,” Darin Cannon said. He cited recent component price increases, including a fresh-air cable that went from $300 to $10,000, a kamatic short shaft that went from $11,000 to $23,000, and raised prices for tail booms and vertical stabilizers. “Verticals are now $35,000. There is no rhyme or reason to the current pricing structure,” he said and predicted that it would eventually force other manufacturers to obtain PMA to make MD replacement parts. “With the dramatic price increases we’ve seen in the last year, we’re finding it harder and harder to get parts and pieces.”

An MD executive declined to provide AIN with any pricing information but said the company believed that its products were “competitively priced.”

However, pricing pressure is driving Phoenix Heliparts to allow its customers to save money by using their own spares for repairs or refurbishments done by the company. “A lot of our customers have spare parts and we will allow them to basically bring their own parts to the dinner table,” Tina Cannon said.

Phoenix Heliparts also provides 24/7 AOG support. Tina Cannon said, “We get a lot more AOG calls than we would like” and said that it “is something we take seriously.”

“We recently had a government customer for whom it was absolutely critical to obtain a part on a Saturday afternoon. MD could not help, but we had the part here. We took the part, got on an airplane, flew to Washington and met them at the airport,” Tina Cannon said. The client took the part, got on an international flight, and got the part installed on the foreign-based helicopter in time to make its mission.

Last year MD fell from second to fifth place in AIN’s annual product support survey. At this year’s Heli-Expo, MD CEO Lynn Tilton publicly acknowledged that the company had come up short on service and support, while producing 40 new helicopters in 2009 and announcing a major initiative to offer customers factory overhaul, refurbishment and upgrades of existing helicopters.