[FoRK] [NYT] US Helicopter making a slow go so far

Rohit Khare <rohit at xent.com> on Tue May 29 20:27:00 PDT 2007

* Did not know about the asymmetrical load factors, but it makes  
sense -- so why not discount the ex-jfk fares? They'd at least pick  
up a few tourists living just a few blocks cross-town from the 34th  
St heliport :) :) PS: freakin' hard-to-find website, because they  
refuse to use the word "heliport": http://www.avports.com/metroport/  
(or for you pilots, http://www.airnav.com/airport/6N5 )

* Did not mention those TSA officers were reallocated from JFK to  
Manhattan; quite likely that the People are spending more than USH's  
revenue per ticket, since they are definitely NOT selling "500  
tickets a day"! http://www.tsa.gov/press/releases/2006/ 
press_release_0650.shtm - though maybe I'm wrong and they are paying  
some of the costs: http://www.lexdon.com/article/ 
us_helicopter_signs_an_agreement/68009.html The initial NYT editorial  
(attached below) didn't sound at all mollified, though: http:// 

* Didn't point out the irony that new route goes to the old Pan Am  
Worldport (Delta terminal). See http://en.wikipedia.org/wiki/ 
Worldport_(Pan_Am) , http://www.panamair.org/History/ 
destinations.htm , and for fun, http://www.airchive.com/SITE%20PAGES/ 

* or that the 1977 crash ruled out a quality site right above grand  
central that may be possible to resuscitate? http:// 
www.airdisaster.com/reports/ntsb/AAR77-09.pdf Or that the accident  
was almost exactly 30 years ago (a fine news hook itself for the  
metro section): http://wirednewyork.com/forum/showthread.php?t=13814  
(original NYT article in PDF) It did indeed survive into the 80s from  
this video clip in a PAA commercial: http://youtube.com/watch? 

* and for super-duper-extra-trivia points: the helo itself was  
brought down by... elevator! http://www.airdisaster.com/forums/ 
printthread.php?t=76885&page=6&pp=40 (see quote below -- but load the  
link for dozens of spectacular shots from movies, including an  
approach sequence by NY Airways onto the Pan Am building. A separate  
article on the mega-scale sculptor Richard Serra (linked to from the  
wiredNY thread above) cites that rigging company as his own in the  
last three paragraphs of http://select.nytimes.com/search/restricted/ 
article?res=FA0B16FB38550C738EDDAC0894DF404482 )

* For less-than-super-duper-extra-trivia points, the width of the top- 
floor Pan Am boardroom in that building rivalled that of the 747  
itself; unfortunately, the anecdote is actually in a book, which will  
take a bit of digging to find. Only Web reference is this Independent  
> Some 30 years ago [747 Chief Engineer Joe] Sutter walked into the  
> Pan American Airlines boardroom with a long piece of rope, laid it  
> across the big room, and told stunned aviation moguls that this was  
> the width of the cabin in the plane he was going to build them. At  
> a stroke, Boeing's chief engineer doubled the size, range and  
> capacity of the world's best airliners
I found an excellent 20-min podcast interview with Joe Sutter at  

* ... and it didn't seek out a quote from any AA officials who may  
have had some thoughts on how much marginal business it brought them  
(that advantage of thru-connections now going on to Delta)

* for that matter, could USH get apron access to securely transport  
passengers to any connecting flight while staying airside? That would  
be much more impressive value for money. NYT "In Advertising" column  
covered the marketing challenges: http://select.nytimes.com/search/ 
restricted/article?res=F50617FB3E550C758CDDAA0894DE404482 (not  
interesting enough to re-paste the full text though ping me if necc).


May 29, 2007
Flying Above the Traffic but Below Expectations

It has been the dream of New Yorkers for as long as there has been  
traffic on the Van Wyck: whizzing by helicopter from Manhattan to the  
airport to avoid being at the mercy of the city’s highways and  
clogged crosstown streets.

At various times in the past half-century, carriers from New York  
Airways to Pan Am have offered scheduled flights, but they have  
ultimately been undone by high costs, uneven demand and, in one case,  
a catastrophic accident.

U.S. Helicopter, which was started by several former airline industry  
executives, is the latest company to try to beat the odds. In March  
2006, it began hourly flights between the Downtown Manhattan  
Heliport, near Wall Street, and Kennedy International Airport. Then  
it added another airport destination, Newark Liberty International,  
as well as another heliport, at East 34th Street.

The company is betting there are more than enough bankers, brokers  
and top business executives who can afford $165 for the eight-minute  
flight between the city and the airports.

But the service and the company’s financial outlook both appear to be  
off to a bumpy start because of spotty marketing, high costs and  
delays opening the East 34th Street Heliport. While U.S. Helicopter  
is not required to announce passenger figures, it very likely missed  
its original target of carrying 160,000 customers in its first year,  
according to industry analysts.

In addition, transportation officials say U.S. Helicopter is behind  
in paying its $14,700 monthly rent at the heliport in Lower  
Manhattan, which is sandwiched between the Staten Island Ferry  
terminal and the South Street Seaport. Sensing turbulence, investors  
have driven U.S. Helicopter’s stock down to $1, from its high of $3  
in April last year, soon after its debut.

“These things are very sexy businesses to be in and for customers  
because they do a great job,” said Robert W. Mann Jr., president of  
R. W. Mann & Company, an airline industry consultant. “But from an  
economics perspective, it’s a real challenge.”

The company lost a net $3.9 million in the first quarter this year on  
revenue of $297,000, 38 percent of which came from more expensive  
charter flights rather than scheduled passenger service. At $165 per  
ticket ($159 plus taxes) for a scheduled flight, that works out to  
about 20 customers a day. The company said in its most recent  
quarterly report with the Securities and Exchange Commission that it  
had just over $1 million in cash and would need more to expand.

Despite the early hiccups, Donal McSullivan, U.S. Helicopter’s chief  
marketing officer, minimized the difficulties, saying, “Our business  
model is sound, but it’s slower than we wanted it to be a year ago.”

In December, it began flights to the Newark airport, and in February,  
nearly a year behind schedule, it started flying from the East 34th  
Street Heliport, hoping to lure bankers, lawyers and executives from  
their Midtown offices.

This month, U.S. Helicopter moved its landing pad at Kennedy from the  
American Airlines terminal to Delta’s, which U.S. Helicopter says  
will help attract 50 percent more passengers on its flights there  
because Delta is beefing up its international service.

Delta passengers, like American passengers before, can check in and  
pass security in Manhattan, then walk a short distance to their gate  
at Kennedy. U.S. Helicopter has a similar arrangement with  
Continental Airlines at Newark.

Also this month, U.S. Helicopter signed an agreement with the Sabre  
Travel Network to make it easier for travel agents to book flights  
for their clients. In the future, the company says it wants to add La  
Guardia Airport and the West 30th Street Heliport to its roster, and  
possibly expand to cities including Chicago, Los Angeles and Washington.

But before U.S. Helicopter can move into those markets, analysts say,  
it has to overcome some significant hurdles in New York. So far, two- 
thirds of U.S. Helicopter’s passengers fly to Kennedy and Newark, but  
many do not fly back to the city, creating an inefficient imbalance.  
Customers, it turns out, are often in a rush to leave the city to  
make a flight, but are more likely to head home, rather than go to  
the office, when they return.

“The problem is how you utilize the aircraft in both directions,”  
said George Hamlin, managing director of Airline Capital Associates,  
a consulting and financial advisory firm specializing in aviation  

In addition, helicopters use a lot more fuel when they lift off, land  
and hover — maneuvers that make up about a quarter of the eight- 
minute flights — adding to the expense, especially with fuel prices  
rising of late.

The success of any scheduled service is based partly on whether there  
are enough flights, so carriers are forced to invest in aircraft  
upfront and hope for the demand.

“It’s a classic aviation problem: You add seats when times are good  
and then the market goes down,” said Dawna Rhoades, who teaches  
international aviation management at Embry Riddle Aeronautical  
University in Daytona Beach, Fla. “That’s often what kills start-up  

There are other variables. For instance, U.S. Helicopter cannot fly  
in dense fog or in icy conditions, and it has to delay or cancel  
flights when dignitaries use the heliport downtown.

U.S. Helicopter’s customers are mostly executives on expense  
accounts. While the stock market is reaching new highs and New York’s  
economy is healthy, these high-end customers are likely to see value  
in spending $50 to $100 more for a helicopter flight instead of  
crawling through traffic in a taxi or limousine.

Naj Alavi, who works at Xenomorph, a financial software firm, has  
happily paid 30 to 50 percent more to fly to the airport rather than  
take a limousine because he can use the time saved with clients or  
working on the computer.

“I’m working around the clock, so the 10 minutes in the helicopter is  
worth so much more than a taxi ride,” said Mr. Alavi, who last week  
fit in a late afternoon lunch at Delmonico’s before catching a  
helicopter to Kennedy for an evening flight to London.

But when the financial markets inevitably sour, Wall Street firms are  
likely to curtail expenses they consider frivolous including,  
possibly, helicopter flights.

“It’s a bubble thing,” Mr. Mann, the consultant, said of commuter  
helicopters. “When the market gets frantic, the value of time is  
presumed to be a lot more valuable.”

A generation ago, airport helicopter service had its heyday, when New  
York Airways, which operated from the top of the Pan Am Building, now  
the MetLife Building.

But the rooftop helipad was closed in 1977 after a spinning rotor  
broke loose from a helicopter and killed five people, including a  
woman on the street below. Pan Am ran helicopter service to Kennedy  
from the East Side and downtown heliports until it ran into financial  
trouble in the mid-1980s.

U.S. Helicopter expects smoother sailing this time. Whether it turns  
a profit is another issue.

“The margin between break-even and making money is pretty thin,” Mr.  
Hamlin said.

> Just stumbled across an interesting tidbit about this accident (16  
> May 1977, registration N619PA) while reading a local business  
> magazine this afternoon.
> Quote:
> “In 1977, a helicopter that took passengers from the top of the Pan  
> Am Building — next door to Grand Central Terminal — to New York  
> airports suffered a malfunction, killing four people. The  
> helicopter couldn’t be flown off the building and city officials  
> refused to let it be lowered by crane from the side of the  
> skyscraper. A company in South Africa bought it, then hired  
> Helicopter Support Inc. (then an independent company, now owned by  
> United Technologies Corporation’s Sikorsky unit) to take the  
> machine apart piece-by-piece and bring it down to street level via  
> the building’s service elevator. The operation succeeded, and the  
> aircraft was shipped off. The helicopter was rebuilt and converted  
> to a water-landing model. It was later ferried to England, where it  
> saw a lot of action going out to North Sea oil rigs. After several  
> years, the helicopter went to Argentina and then to Canada, where  
> it’s still flying today with about 40,000 hours of flight time on  
> the airframe.”
>    — Fairfield County Business Journal (Connecticut, USA), 6  
> February 2006

Rich Guys Over Here

Published: February 9, 2006

This just in for the snaking lines of air passengers waiting in their  
socks to pass through airport security: homeland security officials  
have proudly approved the diversion of 16 screeners from Kennedy  
International Airport to a private heliport entrepreneur so Wall  
Street executives can purchase speedy velvet-rope clearance and  
chopper right to their planes for $150 or so.

Our point here is not to gripe about the can-do prowess of the  
private sector, but rather to object to underwriting this venture  
with scarce federal resources. In July, the Port Authority, which  
runs the New York area airports, protested the federal decision to  
cut the number of local security screeners by more than 240 slots --  
a 6.5 percent drop despite a growing market of waiting travelers.

Now that same Port Authority has blessed the heliport screenings,  
including shifting security equipment at no charge from Kennedy to  
the heliport. ''Well, why not?'' asks Charles Gargano, the  
authority's vice chairman, who says the service will be ''selective''  
and help business.

Selective indeed. Fewer than 500 passengers a day may use the  
heliport flights, even as 50,000 other fliers face the chow-line  
alternative at Kennedy. Government officials say two other New York  
heliports may be similarly ''federalized'' -- a peculiar term for a  
direct subsidy for private business.

It's hard to imagine what possible public interest there could be in  
shifting more than $500,000 in federal resources per heliport to make  
things more convenient for the tasseled-loafers crowd at the expense  
of even more lost time for the broader public.

The government's priority should be to adequately staff the public  
security lines. If the private sector wants privileged screenings, it  
should pay for them. What's next? Government valets with shoehorns at  
the first-class metal detectors?

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