Chartered helicopters: More convenience and status, less a viable business

Over the last decade, as Bangladeshi conglomerates grew in size and stature, they began adding a few helicopters to their fleet. 

Investors would often fly in for a day, and it became impossible to take them to visit factories in far flung areas of the country and return them back to Dhaka on the same day; owing to the country's horrendous traffic situation. 

But helicopters are expensive. The Bell or Robinson, which are the most common types of helicopter available in the country, can cost between Tk40 and 45 crore, and Tk10 and 14 crore, respectively. Having them sit idle for months became very expensive. 

And so some of the business conglomerates added to their fleet and turned it into a commercial service. Others decided to lend their helicopters to the ones that had gone commercial. 

That is how we organically arrived at a niche industry for chartered helicopter services. It however largely remains a novelty and prestige product, and none of the ten companies operating the services are turning any profits despite the fact that they charge passengers a flat rate of Tk66,000 per hour, excluding VAT.

According to the Civil Aviation Authority of Bangladesh (CAAB), currently, these 10 private aviation companies are providing charter helicopter service for corporate use, VIP transport, emergency medical evacuation and leisure trips. 

The companies are South Asian Aviation, Meghna Aviation, Square Air, BRB Air, ATL Aviation, Partex Aviation, R&R Aviation, Bangla International Airlines, Bashundhara Airways and BCL Aviation.

In 2009, Square Air launched a helicopter service to ensure safe and pleasant transport for its top executives. Later, they included emergency medical services. 

The next year, BRB Air stepped into the aviation industry following an expansion of its helicopter service, which was restricted to charter flights for BRB Group's top officials. 

Between 2011 and 2016, several other business conglomerates followed suit. 

For example, Meghna Aviation – a sister concern of Meghna Group - was established in 2011 to facilitate the group's official tour to its industrial projects located away from the capital city. 

On the instruction from the group's Chairman and Managing Director, Mostafa Kamal, Meghna Aviation introduced commercial service within the next few years. Currently, the company operates four helicopters, including double engine Bell-429, single engine Bell-407GX and two Robinson R-66 helicopters.

In 2016, BCL Aviation became one of the two latest companies that have stepped into the private aviation industry. They purchased two Robinson R-66 helicopters and began their operations intending to provide corporate air transportation to the

Building Construction Limited (BCL) industrial areas. 

Afterwards, BCL Group's top management expanded the helicopter service.

What do the corporate houses use chartered helicopter service for? 

Officials in the industry said the business groups that use helicopters belong to different industries, including ready-made garments, power plants and construction. These groups often arrange site tours for their foreign guests, including investors, brand buyers and engineers. 

"For example, after arriving in Dhaka, foreign guests board a helicopter, fly to a distant location, visit a factory or development site and attend important meetings, then return to Dhaka within a day," said an official, who requested anonymity.

He further added, "And if they don't need to stay in Dhaka, they return to their home country taking the next international flight. Having a mode of quick transport is crucial to the top officials of a big corporation. To them, time is money."

One director of Bangla International Airlines, who has been serving in the private aviation sector for 12 years, said, "Helicopter service is almost restricted to serving the corporates." 

Preferring to be anonymous, the retired Air Force officer termed the service as an 'intangible' business because none of the companies is in a rush to get a quick return from this big investment. 

Purchasing a helicopter is indeed a big step because of the expense it entails. According to CAAB, there are around 34 helicopters in the country's private fleets and US-made Bell and Robinson is the dominating brand. 

The top priority of Bangla International Airlines is to make helicopters available for the top officials of PHP Group – its parent company, according to one of the directors. 

He added, "Sometimes our helicopters lay idle in between serving our corporate clients. Our commercial coverage (on-call charter) has not been expanded much." Launched in 2013, Bangla International Airlines currently has two choppers: a Bell 407 and a Robinson R44.    

The airline's officer said big business groups purchase helicopters mainly for their own use. "You see, rich people buy hybrid cars and they are less bothered about the maintenance cost, because they know they can afford it. Owning a helicopter is like that. And this is for their comfort and time-effective journey." 

"The owners do not pay our [the pilots'] salaries from the revenue [collected from commercial trips]. The collected revenue is minimal. Charter helicopter service sector in this country is subsidised by the owners," he said. 

Several business groups, other than the 10 listed, have helicopters for private use. But they don't provide aviation services, instead they let other aviation services operate their vehicles on a rental basis. Simply put, they use their helicopters like Uber car owners use their cars. 

Groups including Akij, Beximco and Viyellatex keep their helicopters at private ventures for operational and maintenance purposes, said industry insiders.

South Asian Airlines is one such company that provides operational and maintenance services to helicopter owners. South Asian Airlines first introduced civil helicopter services in the country in 1999 with a Robinson R44 helicopter. 

Now the airline operates eight helicopters on a rental basis. They also have Robinson R66, Bell 430 and Airbus EC130 T2 helicopters.

"We provide on-call service to the helicopter owners who are our corporate clients. We do not run a commercial business. Rather, we serve our corporate clients," said Fazle Sahan, manager (operations) at South Asian Airlines. 

How about heli-tourism?

Helicopter rides taken by brides and grooms, religious speakers or other ordinary people usually become viral content on social media platforms. Clearly, more people are showing an interest in helicopter transport. 

A growing middle to upper class potentially see helicopter travel as a viable option. This could be a positive thing for the country's inbound aviation market. But what do the industry insiders say?

Recently, this correspondent spoke to several senior executives of aviation companies. They said their chopper service is still bound to corporate deals and companies are yet to cross the break-even point. 

Some of the issues hindering service diversification are a shortage of helicopters and pilots, night-time restrictions on flying and expensive travel fare. Their hope of seeing the rise of 'heli tourism' remains unattained.

What would be a sustainable diversification of the now corporate-centric charter helicopter service? How can the service providers generate revenues? 

Officials said some issues need to be addressed, for instance, firstly the 15%  value-added tax on passengers and 30% supplementary duty on the aviation companies need to be reduced. 

Currently, passengers are charged a flat rate of Tk66,000 per hour, excluding VAT.

"The operational costs of the choppers are very high. The vehicles often lay idle for long because of a lack of availability of spare parts. The pool of pilots is not adequate. Sometimes, we fail to respond to emergency calls i.e. medical evacuation, [which] corporate clients too cannot have access to. 

Hence, the depreciation cost is high," said Kaium Sarker, senior executive (sales) at Square Air.