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  • The termhelicopter airlineis one that most are probably not familiar with.

  • Simply, it's an airline, transporting passengers or cargo, that uses helicopters.

  • Of course, not all helicopter companies are truly airlines, since many, if not most, civilian

  • applications of helicopters do not involve transportthe 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

  • certainly are not widespread.

  • There was, however, a time when helicopters were believed to be the future of short-haul

  • passenger transport, so what happened?

  • The opportunity for helicopter airlines emerged around the 1950's.

  • When passenger aviation first began, cities' first airports were located rather close to

  • the cities themselves, as they just didn't need as much space.

  • Around the 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 Hanedaall 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 airplanes were too.

  • After all, the smaller the airplane, the shorter the runway needed, and vice versa.

  • These small airports even worked for the long-haul flights of the time since, in general, before

  • the 1950s, these were done on relatively small airplanes that would make multiple stops on

  • longer journeys.

  • However, with the introduction of the de Havilland Comet in the 1950s, and other passenger jet

  • aircraft soon after, airplanes were growing larger, range was increasing, and passenger

  • demand rose too.

  • That meant that all the small airports of the past wouldn't cut it and so, cities

  • looked to build larger airports more suited for the jet age.

  • New York's primary airport shifted from LaGuardia to JFK, Chicago's to O'Hare,

  • DC's to Dulles, Paris' to Orly, and Tokyo's to Narita.

  • Each of these larger airports were further from their city centers, though, as that was

  • where there was space.

  • In many cases, the smaller, closer airports remained in operation for domestic or regional

  • flights, but in other cases they closed down.

  • That's how we got to the reality today where many cities' airports are an hour's trip

  • from the city center.

  • Of course, the impact of this distancing varied depending on the type of flights passengers

  • were taking.

  • For example, with a seven-hour flight from New York to London, the additional 45 or so

  • minutes it would take to get from Manhattan to JFK, over LaGuardia, only extends overall

  • travel time by about 7.5%.

  • However, on the one-hour flight from New York to DC, this would extend travel time by nearly

  • 20%.

  • This trend of distancing of airports from their cities had little impact on long-haul

  • flights, but it had a huge effect on short-haul flights meaning that planes were now less

  • competitive compared to cars or trains.

  • Nowadays, via JFK, it takes just 30 minutes more to travel from Manhattan to downtown

  • Charlotte than from Manhattan to downtown DC, even though Charlotte is more than twice

  • as far.

  • There are always diminishing marginal returns to air travel's efficiency as distance decreases,

  • but moving airports further from cities increased this to the point that, below a couple hundred

  • miles of distance, airplanes are not the fastest means of travel.

  • Helicopter airlines were supposed to solve that.

  • It was quite the niche business model concept, but the 1950's, 60's, and 70's 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 reasonableto go from Berkley to SFO cost just $9 which,

  • inflation adjusted, 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 primarily intracity, all flights were within the same metro area,

  • but the hypothetical next phase of this business model's expansion was for intercity flights.

  • The idea was that helicopters could replace or augment short-haul flights as a quick way

  • to get between city centers.

  • From New York's Downtown Manhattan Heliport, which is just a ten minute walk from the New

  • York Stock Exchange, one could run regular passenger flights reaching Philadelphia in

  • 30 minutes, Baltimore in 60 minutes, and DC in 70.

  • From Wall Street, the fastest one could reasonably travel door to door to DC in a car, train,

  • or plane would be about four hours.

  • With a passenger helicopter leaving steps away, that would be cut down to two.

  • So, helicopters offered the possibility of intracity travel for the same price as taxis,

  • and intercity travel in half the timewith so much promise and potential, what went wrong?

  • Well, it turns out that it wasn't so much that anything major went wrong, but rather

  • that, when they started, a lot of things went right.

  • Most specifically, the helicopter industry in the US was supported by significant federal

  • subsidies.

  • Up until 1965, the federal government pumped almost half a billion dollars, inflation adjusted,

  • 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.

  • It was then all and exclusively up to the helicopter airlines themselves to turn a profit,

  • and that's where the problems started.

  • Helicopters are tremendously expensive.

  • A Bell 206, for exampleone of the most common passenger helicopterscosts 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 to run the company managing the helicopter.

  • This all means that a helicopter like this will cost in the thousands of dollars per

  • hour to operate, but it can only seat between four and seven people.

  • That math is simple.

  • Helicopter companies rely on a steady stream of people who value an hour saved in the many

  • hundreds of dollars.

  • That market certainly exists, but at least in the 70s and 80s, it proved too small to

  • keep helicopter airlines afloat without subsidies, especially after a spate of high-profile accidents

  • highlighted the increased danger in comparison to airplanes and drove passengers away.

  • And so, one by one, Los Angeles, San Francisco, Chicago, and New York's major helicopter

  • airlines each failed.

  • What followed was the dark ages of passenger helicopter airlines.

  • Market forces whittled these down to just the strongest in the few markets that could

  • feasibly support scheduled passenger helicopter service.

  • Those certainly do exist, but there are not many of them.

  • For example, there has long existed a passenger helicopter airline operating between the financial

  • hub of Hong Kong and the gambling hub of Macau.

  • While the cities are only 40 miles or 65 kilometers apart, they sit on opposite sides of the Pearl

  • River estuary.

  • The primary means of transportation between the two is therefore an hour-long ferry, however,

  • for wealthier individuals, of which there are plenty in both Hong Kong and Macau, this

  • helicopter shuttle connects the two cities in 15 minutes for about $550.

  • A somewhat similar service exists between the country of Monaco and its closest airport

  • in Nice, Franceturning a 45 or 60 minute drive into a 7 minute, $140 flightand 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 at that time when there started a tiny but noticeable renaissance of the business

  • model.

  • One of the early innovators in this resurgence was Blade, which grew first by offering flights

  • from Manhattan to New York's airports.

  • Other companies soon followed, including Airbus and Uber, to set up similar services all around

  • the world.

  • Airbus' effort later closed down, but both Blade and Uber's services have now been

  • operating for a number of years.

  • What's notable about Blade in particular is that they have partially fulfilled the

  • vision that helicopter airlines' innovators imagined decades ago, but mostly not with

  • helicopters.

  • They operate flights that travel outside the New York metro area directly from Manhattan,

  • rather than from LaGuardia, Newark, or JFK, but these are on seaplanes, rather than helicopters.

  • Leaving from the East River, these reach the Hamptons in 40 minutes or Nantucket in 70

  • minutesboth popular getaway spots for wealthy New Yorkers.

  • Prices are steep, at $800 to the Hamptons and $1,100 to Nantucket, but this service

  • acts as some evidence that some markets can support more expensive service from city centers.

  • The expansion of such services seemed imminent.

  • Cape Air, after years of trying, was granted government approval in early 2020 for a one-year

  • trial period of regularly-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 customer

  • segment much closer to mass-market, but at the time of writing, the first of these flights

  • have yet to be scheduled and the service seemingly might have become a victim of the pandemic-induced

  • travel downturn.

  • Seaplanes could be a short-term solution for interurban air travel bypassing airports,

  • but longer term, it's clear that the future involves tiltrotor vertical takeoff and landing

  • aircraft.

  • These aircraft take off like a helicopter, then tilt their propellers 90 degrees to fly

  • like an airplane.

  • This allows them to take off without a runway, but achieve speeds and efficiencies far greater

  • than most helicopters.

  • Currently, no such aircraft is in non-military passenger service, but plenty are in development.

  • Uber, for example, has plans to launch air taxi service using such aircraftinitially

  • in Dallas, Los Angeles, and Melbourne.

  • It still has huge amounts of regulatory and technological challenges to surpass before

  • this is possible, but the future of short-haul premium air travel seemingly might not involve

  • airports.

  • Uber's plans involve constructing smallskyports,” as they call them, around

  • cities, and these could be as simple as a repurposed parking garage roof.

  • It's tough to imagine a near-future where the masses are flying from city center to

  • city center as there's just a 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 enormous considering the infrastructure

  • requirements.

  • The beauty of vertical take off and landing aircraft is the lack of infrastructure needs,

  • but that does mean operational costs are much higher.

  • Costs don't matter as much, though, because such services wouldn't really be competing

  • against commercial airlines or trains, at least at first.

  • Rather, they'd be competing against the private aviation market since, for business

  • travelers, they could offer an overall travel time comparable or better than private jets.

  • The potential market is quite premium, but penetrating a small, yet highly lucrative

  • market is enough to make expensive city center to city center service worth pursuing for

  • certain companies.

  • Whether such a concept will truly be an aspect of the near-future is yet to be seen, but

  • if it is, it could help solve the paradoxical inefficiency of short-haul air travel.

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B1 US helicopter passenger travel york haul downtown

Why Helicopter Airlines Failed

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    joey joey posted on 2021/06/09
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