Last December Air Methods announced orders for 42 new Eurocopter and Bell helicopters, issued a special cash dividend and announced a three-for-one stock split. It also acquired the assets of Las Vegas air-tour operator Sundance Helicopters, including its fleet of 22 Eurocopter AS350s and EC130s.
The moves follow a series of significant deals for the nation’s largest helicopter EMS company. In recent years Air Methods has acquired competitors CJ Systems and OmniFlight as well as helicopter maintenance and modification company United Rotorcraft. Nationwide, Air Methods operates a fleet of more than 400 helicopters.
Measured by market capitalization, Air Methods would be the sixth-largest passenger airline, right behind US Airways and just ahead of JetBlue. Over the last five years, Air Methods stock (AIRM) has tripled in value.
CEO Aaron Todd joined Air Methods in 1995 and has led the company since 2003. He does not want the Sundance acquisition to send a signal that he thinks the domestic helicopter EMS market is saturated.
“Just the opposite. There is a bright future for helicopter EMS in this country and that’s one of the reasons we think it is a good acquisition for us. We are going to continue to have high demand for experienced rotary-wing pilots, and this will give us a nice feeder pipeline to bring pilots into the system via that avenue as one of many. Most of our turnover is associated with retiring pilots. As air medical continues to be an expanding environment and you have Vietnam-era pilots retiring, the minimum flight hours required by air medical operations–day and night in single-pilot settings–dictates that higher level of experience. There’s a more limited pool of qualified candidates. But the great thing about recruiting from air-tour operations is that these pilots get a significant amount of flight experience. They fly significantly more hours per year than other sectors of the rotary-wing industry and they get the needed experience sooner,” he said.
Nor does the Sundance acquisition necessarily mean that Air Methods is in the immediate market for other air-tour operators, according to Todd. “We wouldn’t rule it out, but we will see how it goes,” he said. For now, he doesn’t envision any big changes at Sundance.
Las Vegas “has been a fairly steady market and I don’t think Air Methods’ influence will change its direction one way or another,” he said.
Todd said the orders for 42 new helicopters for EMS operations “represent about two-and-a-half years of deliveries. We need to replace about 20 aircraft a year to keep our fleet at a consistent age. Anything above 20 reflects growth, but that doesn’t mean that we are going to do an order every year.” Going forward, he considers the possibility of including more single-engine helicopters in the EMS fleet. “I think we will continue to see that as new singles have higher performance capabilities, especially with regard to high and hot operations in the West,” he said.
Upgrading the existing fleet with the latest safety equipment and enhancing training remain top priorities for the company. “We have always recognized that night flying and inclement weather pose higher risks and we train deliberately to manage and assess those risks carefully. We’ve been retrofitting our entire fleet with enhanced weather-reporting capabilities, NVGs, H-Taws and Tcas. That’s been an ongoing initiative for several years now. We have a large organization spread to almost all 50 states. We have talented people who are close to the action and have a lot of decision-making capability. They are mindful of what’s needed, when it’s needed, and we make sure the resources are there when they need them,” Todd said.
Last October Air Methods opened a new training center complete with an EC135 aviation training device; it also sends its pilots to train in American Eurocopter’s Level-D full-motion AS350 simulator in Texas. Todd said the company intends to expand the use of full-motion simulators to other aircraft in its fleet, including the EC135 and the Bell 407.