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CHC: Canada's helicopter heavyweight

Acquisitions over 20 years have built CHC Helicopter into a global giant. But even as foreign operations overshadow domestic revenue, Canada is the unquestionable home for this exporter of efficiency and safety.

While search and rescue and emergency medical flights are in CHC's portfolio, its offshore oil and gas support dominates its clientele list. From a base near Vancouver, British Columbia, CHC is searching for new contracts in deeper waters that call for only the largest aircraft and bring the largest profits.

Claiming to lead the helicopter industry with "the largest commercial fleet in the world by value", CHC has not released fleet statistics or much other data since the public company was bought last year. The tally at the end of 2007 was 3,817 employees and 255 aircraft at 95 bases in 35 countries.

At least 70% of that is offshore oil and gas support, which pushed CHC annual revenues above $1 billion in 2006.

Worldwide flight hours jumped from 59,859 in 2006 to 84,207 in 2007. Growing profits attracted investment from First Reserve, which finalised its $3.7 billion buyout last September for what it called the "largest ever oil field services buyout". Operating from Connecticut, Texas and the UK, First Reserve claims to be the world's leading private equity firm within the energy industry, with 36 companies in its portfolio.

"Canadian Holding Company" was the handle created in 1987 when Sealand Helicopters owner Craig Dobbin led the purchase of Okanagan Helicopter and Toronto Helicopters. CHC leapt into an industry-first in 2000, bringing its worldwide operations under one company name and eventually one livery scheme. Major strides came with CHC's acquisition of British International Helicopters in 1994 and Helikopter Services Group of Norway in 1999. Nowit operates on every continent.

The strategy acquires resources. The $129 million buyout of the Schreiner Group of the Netherlands in 2004 led to a company-wide reorganisation, seeking common safety standards worldwide. "Transport Canada was the only regulatory agency that required a safety management system, so we used that as the starting point," says Gregory Wyght, vice-president of safety and quality.


Wyghtneeds to make certain each local law and regulation is followed, even when local is a world away. "I went with the principle that I had to take a piece from every single region in order to get them all to buy into it, so it took a lot of diplomacy."

Being compliant is easier in some regions than in others, and sometimes it is too easy. "In some countries the regulatory oversight is just not there, so we come in with international standards that raise the bar," he says.

European facilities are mostly staffed by Europeans, he adds. "You're more likely to see Canadians in undeveloped countries, usually in management. They'll be in an oversight, mentoring role, helping to educate."

The same is true for maintenance, says Jim Swoboda, vice-president of Technical Services. When CHC does not simply launch its own local operator, it coaches established companies after acquiring them. "They're getting that global best practices model," he says. "We've created a system designed to flex to new regulatory systems."

Frequently the partnership is at the ownership level, with joint operations to satisfy domestic ownership requirements of law. "More than 120 companies make up the CHC banner," Swoboda says.

When that Canadian expertise surpasses even the local civil aviation authorities, Swoboda says it is common for foreign lease authorisations to bring Transport Canada authority over oceans. In the case of Baku, Azerbaijan, he says those authorisations were extended for 20 years, leaving the Canadian registries and Transport Canada's authority on each aircraft.

Essentially, he says, "we work with as many nationals as possible and still maintain the standards oil companies need. The flexibility we provide is really our trademark." An important element is the experienced aircraft maintenance engineers keeping those aircraft flying. "Of the 900-1,000 licensed engineers we have, we move them all over the world to their base of operations four times a year," Swoboda says. That is working 8h days six weeks in a row, followed by six weeks off.

As for the maintenance standards of European operations, Swoboda says they are based on European Aviation Safety Agency rules, "but we're trying to move them toward the hybrid EASA and Transport Canada standards".

CHC European Operations is one of three major CHC divisions, with CHC Global Operations and Heli-One, which provides parts worldwide and handles major overhauls.

The Heli-One facility at Stavanger in Norway is among the world's largest. It was formerly Helicopter Services Group before being acquired 10 years ago, says Rune Veenstra, vice-president of business units for Heli-One.

The international strength applies there, as well, he says, starting with bilateral agreements between EASA and Transport Canada. "When you have bigger volumes the whole process will be more flexible," he says.

The heavy helicopters flown by CHC are Eurocopter Super Pumas and Super Puma MKIIs, plus the S-61N and S-92 from Sikorsky. Sikorsky S-76s and Eurocopter AS365s lead the mediums, with most light and many medium CHC helicopters sold off.

 © CHC Helicopter
CHC is increasingly focusing on heavy helicopters such as the Eurocopter Super Puma

Heavies are the future, says Barry Clouter, regional director for the Americas. As oil and gas reserves go dry, oil companies are looking to deeper waters that only the heavy helicopters can reach, although some contracts are not renewedand others are not bid for.

"In Venezuela we're out completely. In Ecuador we're winding down," he says. "The [Bell] 212 is not a market that we want to continue, so we're looking to divest ourselves of those airframes." Those flights over land may be over, but the 20 aircraft flying offshore from Brazil continue.

It has been six years since this strategy led CHC to sell off the contracts and flights that got it started. The forestry, mining and oil and gas contracts in Canada requiring medium and light helicopters are now under the separate company Canadian Helicopters.

That leaves only one base in Nova Scotia keeping Canadian flights aloft for CHC.

"We want to grow the Canadian side of this company," says Clouter. "There are opportunities off Newfoundland. There are opportunities off Greenland in the Labrador Sea." Those resources are mostly untouched and promising, he says.

Demand is backing down from the recent frenzy fuelled by record oil prices. Soon, Clouter is certain, oil prices will swing back up and offshore flight services will be at capacity.

"You're judged not only on price," he says, "Oil companies, the ones that we deal with, are willing to pay extra for companies with established safety expertise in the field."


One of those experts is in the office next to Clouter's in Halifax. Base manager Sean Tucker is ready for the fog to roll in off the Atlantic Ocean. Add corrosive saltwater and deadly cold waters and "this is probably the most demanding instrument rules flying in the helicopter industry, so our level of experience really is unprecedented", Tucker says.

Heis proud of holding up Canadian operations for a company now almost completely international. His base is now busier with the addition of a second S-92. Those two heavy helicopters can each carry 19 passengers and Exxon needs four times as many flights until autumn in a maintenance drive on their five offshore platforms. It has brought in 95 more workers in the hunt for that black gold.

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