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Why Helicopter Airlines Failed

Jan 25, 2022
This video was made possible by Skillshare. He learns new skills for free for two months by being one of the first 1000 to join at http://skl.sh/wendover10. The term "

helicopter

airline" is one most are probably unfamiliar with. Simply, it is an airline, that transports passengers or cargo, that uses

helicopter

s. Of course, not all helicopter companies are truly

airlines

, as many if not most civilian applications for helicopters do not involve transportation: the people or things inside often land right back where they took off. Helicopter

airlines

have been around almost as long as helicopters themselves, but they're certainly not widespread.
why helicopter airlines failed
However, there was a time when helicopters were believed to be the future of short-haul passenger transport, so what happened? The opportunity for helicopter airlines arose around the 1950s. When passenger aviation began, the first city airports were located fairly close to the cities themselves, since they did not need as much space. Around mid-century, New York's primary airport was LaGuardia, Chicago's was Midway, DC's was National, Paris' was Le Bourget, and Tokyo's was Haneda, all airports fairly close to their city centers. . These airports were relatively small and generally had short runways, but that wasn't a problem because passenger demand was small and so were planes.
why helicopter airlines failed

More Interesting Facts About,

why helicopter airlines failed...

After all, the smaller the plane, the shorter the runway, and vice versa. These small airports even functioned for the long-haul flights of the time, since before the 1950s, these were generally carried out by relatively small planes that made multiple stops on longer trips. However, with the introduction of the de Havilland Comet in the 1950s, and other jet airliners soon after, the planes became larger, range increased, and passenger demand increased as well. That meant all the small airports of the past wouldn't cut it, and so cities looked to build larger airports more suitable for the jet age.
why helicopter airlines failed
New York's main airport went from LaGuardia to JFK, from Chicago to O'Hare, from DC to Dulles, from Paris to Orly, and from Tokyo to Narita. However, each of these larger airports was further from their city centers, as that was where the space was. In many cases, smaller and closer airports remained operational for domestic or regional flights, but in others they closed. Thus we come to today's reality where the airports of many cities are an hour's drive from the city center. Of course, the impact of this distancing varied depending on the type of flights the passengers took.
why helicopter airlines failed
For example, with a seven-hour flight from New York to London, the additional approximately 45 minutes it would take to get from Manhattan to JFK, over LaGuardia, only increases the total travel time by 7.5%. However, on the one-hour flight from New York to DC, this would extend travel time by almost 20%. This trend of moving airports away from their cities had little impact on long-haul flights, but had a big effect on short-haul flights, meaning planes were now less competitive compared to cars or trains. . Today, via JFK, it takes just 30 minutes longer to travel from Manhattan to downtown Charlotte than it does from Manhattan to downtown DC, even though Charlotte is more than twice as far away.
There are always diminishing marginal returns in the efficiency of air travel as distance decreases, but moving airports further from cities increased this to the point that below a couple hundred miles away, planes they are not the fastest means of travel. Helicopter airlines were supposed to figure that out. It was quite the concept of a niche business model, but the 1950s, 1960s, and 1970s saw a small wave of these, particularly in Los Angeles, San Francisco, Chicago, and New York. SFO Airlines, for example, operated an extensive network around the Bay Area serving San Jose, Palo Alto, San Francisco Airport, Oakland Airport, Downtown Oakland, Downtown San Francisco, Marin City, Berkley and Concord.
SFO Airlines fares were quite reasonable: going from Berkley to SFO was just $9 which, adjusted for inflation, is the equivalent of $75 today. With a flight time of 10 minutes and prices comparable to a taxi, the choice for the consumer was easy. This route network was mainly intra-city, all flights were within the same metropolitan area, but the next hypothetical phase of the expansion of this business model was for inter-city flights. The idea was that helicopters could replace or augment short-haul flights as a quick way to move between city centers. From the Midtown Manhattan Heliport in New York, which is just a 10-minute walk from the New York Stock Exchange, regular passenger flights can be made to Philadelphia in 30 minutes, Baltimore in 60 minutes, and DC at 70.
From Wall Street, the fastest you could reasonably travel door-to-door to DC by car, train, or plane would be about four hours. With a passenger helicopter leaving a few paces away, that would be reduced to two. So helicopters offered the ability to travel within the city for the same price as taxis, and intercity travel in half the time—with so much promise and potential, what went wrong? Well, it turns out that it wasn't so much that something major went wrong, but that, when they started, a lot of things went right. More specifically, the US helicopter industry was supported by significant federal subsidies.
Until 1965, the federal government pumped nearly half a billion dollars, adjusted for inflation, into passenger helicopter service in Los Angeles, San Francisco, Chicago, and New York. This made it relatively easy for these companies to break even, but then in 1965 the subsidies stopped coming. So it was completely and solely up to the helicopter airlines themselves to make a profit, and that's where the problems started. Helicopters are tremendously expensive. A Bell 206, for example, one of the most common passenger helicopters, costs about $600 per flight hour to operate in terms of fuel, maintenance, and other variable costs. On top of that, there's the cost to buy it, millions of dollars, the cost of the pilot, hundreds of dollars per hour, the landing fees, up to hundreds of dollars per flight, and the cost of running the company that runs the helicopter. .
All of this means that operating a helicopter like this will cost thousands of dollars an hour, but it can only fit between four and seven people. That math is simple. Helicopter companies rely on a constant stream of people who value an hour saved at many hundreds of dollars. That market certainly exists, but at least in the 1970s and 1980s, it proved too small to keep unsubsidized helicopter airlines afloat, especially after a series of high-profile accidents highlighted the greater danger compared to airplanes. and took away the passengers. And so, one by one, the major helicopter airlines of Los Angeles, San Francisco, Chicago, and New York

failed

.
What followed was the dark age of passenger helicopter airlines. Market forces narrowed these down to only the strongest in the few markets that could feasibly support scheduled passenger helicopter service. Those certainly exist, but there aren't many of them. For example, there has been a long-standing passenger helicopter airline that operates between the financial center of Hong Kong and the gambling center of Macau. While the cities are only 40 miles or 65 kilometers apart, they are located on opposite sides of the Pearl River estuary. The main mode of transportation between the two is therefore a one-hour ferry, however for the more affluent, of which there are many in both Hong Kong and Macau, this helicopter transport service connects the two cities in 15 minutes for around $550.
There is a somewhat similar service between the country of Monaco and its nearest airport in Nice, France, which turns a 45 or 60 minute trip into a 7 minute $140 flight, and then there are a few other less notable examples of scheduled passenger helicopter airlines, including a couple of subsidized services to isolated places without runways, but for the most part, few helicopter airlines survived through the turn of the century. These dark ages continued until around 2010. It was around this time that a small but noticeable renaissance of the business model began. One of the early innovators in this revival was Blade, which grew by offering flights from Manhattan to New York airports.
Other companies soon followed, including Airbus and Uber, to establish similar services around the world. The Airbus effort later shut down, but both the Blade and Uber services have now been operating for several years. What's notable about Blade in particular is that they have partially fulfilled the vision that helicopter airline innovators envisioned decades ago, but mostly not with helicopters. They operate flights that travel outside of the New York metropolitan area directly from Manhattan, rather than LaGuardia, Newark, or JFK, but these are by seaplane, rather than helicopter. Departing from the East River, these reach the Hamptons in 40 minutes or Nantucket in 70 minutes, both popular getaway spots for well-heeled New Yorkers.
Prices are steep, at $800 for the Hamptons and $1,100 for Nantucket, but this service acts as proof that some markets can support more expensive service from city centers. The expansion of such services seemed imminent. Cape Air, after years of trying, won government approval in early 2020 for a one-year trial period of scheduled passenger seaplane flights between downtown Boston and downtown New York. With travel times of an hour and fares around $400, these flights would target a segment of customers much closer to the mass market, but as of this writing, the first of these flights has yet to be scheduled and the service it apparently could have become a victim of the pandemic-induced travel recession.
Seaplanes might be a short-term solution for intercity air travel bypassing airports, but in the longer term, it's clear that the future involves tilt-rotor vertical takeoff and landing aircraft. These planes take off like a helicopter, then tilt their propellers 90 degrees to fly like a plane. This allows them to take off without a runway, but they achieve much higher speeds and efficiencies than most helicopters. Currently, no aircraft of this type are in non-military passenger service, but many are in development. Uber, for example, has plans to launch an air taxi service using these types of planes, initially in Dallas, Los Angeles and Melbourne.
It still has a host of regulatory and technological challenges to overcome before this is possible, but the future of premium short-haul air travel may apparently not involve airports. Uber's plans involve building small "airports," as they're called, around cities, and these could be as simple as a repurposed parking garage roof. It is hard to imagine a near future in which masses fly from one city center to another, as there is only one natural limit to scale. The mass market solution for faster intercity travel is clearly high-speed rail, but the barrier to entry for private companies in this is huge considering the infrastructure requirements.
The beauty of vertical takeoff and landing aircraft is the lack of infrastructure needs, but that means operating costs are much higher. Costs don't matter that much, though, because such services wouldn't really compete with commercial airlines or trains, at least initially. Rather, they would be competing against the private aviation market as, for business travelers, they could offer comparable or better total travel times than private jets. The potential market is quite premium, but penetrating a small, but highly lucrative market is enough to make certain companies worth pursuing an expensive center-to-city service. Whether such a concept will truly be a thing of the near future remains to be seen, but if it is, it could help solve the paradoxical inefficiency of short-haul air travel.
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