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State of the Privately Operated Aerial Firefighting Industry

Posted 64 days ago ago by jhadmin

If asked to describe the present state of the privately operated aerial firefighting industry in the U.S., I would call it robust, thanks in large part to aggressive fleet upgrades prompted by customer requirements and vendor initiatives.  Including UH-60 Blackhawks and CH-47Ds, operators have acquired turbine-powered equipment that is at least one generation newer than most of the current fleet of medium and heavy Cold War and Vietnam War-era helicopters. At the same time, some regional airliners have transitioned to new lives as large air tankers.

Due to their twin engines and redundant control systems, the later generation helicopters afford faster response times, increased speed and maintainability, enhanced safety of flight, and the availability of parts for improved systems and components. As examples, the increased power and reliability of T700-GE-701D engines are available from General Electric for the UH-60.   Sikorsky, the UH-60 manufacturer, offers improved durability gearboxes incorporating structural and control strength enhancements.

Across the industry, helicopters used for firefighting are also being upgraded with state-of- the-art avionics. In tandem with that, improvements continue to be made to training programs and safety management systems, which are paying off.

According to the National Interagency Fire Center (NIFC) statistics, there were no fatal accidents involving helicopters and fixed-wing tankers in fiscal year 2018 while engaged in firefighting, a year in which some of the most destructive fires in the U.S. took place.  For FY 2019, just one fatal accident has occurred to date. That was the first one since March 2015.

While the industry is better-positioned from the standpoint of equipment and technology, new challenges have arisen that can impact its long-term viability. Among them is a changing contracting environment, which is trending toward more call-when-needed (CWN) contracts and fewer exclusive-use (EU) agreements—long the mainstay for fixed-wing tanker providers, and to some extent, helicopter operators. The CWN model works very well for operators during high activity fire seasons, due to increased amounts of flying. However, a company that becomes largely dependent on CWN takes a financial hit in years when there are fewer fires.  The problem is, if there are enough years of low fire activity, the government risks losing a good deal of its supplier base.

The fact is we are in just such a year. According to data from the California Department of Forestry and Fire Protection (Calfire), the amount of acreage burned by wildfires in the state, so far this year, is down 90 percent compared to what it was at the same time last year.  Nationwide, the numbers are also down with 3,866,659 acres burned from January 1 through August 23 of 2019, by 31,892 fires, according to NIFC statistics. For the same period in 2018, the acreage destroyed was 6,174,297, by 41,827 fires.

CWN was a more viable concept, at a time when helicopters not actively used for firefighting were deployed on other types of missions. Often, those helicopters were engaged in construction, infrastructure maintenance, and refurbishment.  However, given the nature of specialized firefighting equipment, a permanent internal tank installation on a large helicopter for retardant dropping, may make the aircraft no longer suitable for other work, such as main deck cargo transport.

Today, the industry is in its initial phases of adjusting to the CWN trend.  It continues to be a work in progress. With the full evolution of adjustment, there will be a fundamental shift in the way that aerial firefighting companies plan and invest.

Along with this, contract duration is decreasing.  Until this year, fixed-wing airtanker exclusive use contracts ran for a guaranteed five years, plus an additional five optional years.The contracts were renewable in one-year increments by the U.S. Forest Service (USFS).  With all options renewed, that meant that the contract could run as much as 10 years. Under the new system, these contracts are for a single base year plus four renewable option years, for a total of up to five years.

Helicopter operators are also seeing shorter contract periods. Currently, USFS exclusive use contracts average 120 days (or four months) compared to as many as 180 days, the standard in previous years.  As one operator notes, a four month contract makes it harder to keep people employed.

The move toward more CWN contracts in combination with shorter duration EU contracts poses greater financial risk for the operators while adversely impacting their operational planning, especially with regard to hiring, training, and retaining qualified pilots and mechanics, and spare parts provisioning.  Yet, despite the changed contracting environment, the competitive landscape is expanding as more operators enter the industry on the assumption that the market is large and will continue to grow. One case in point is a recently announced joint venture between Unical Air, a California-based aircraft maintenance company, and Coulson Aviation USA, part of the Coulson Group headquartered in Canada.  According to a recent press release, the joint venture company intends this year to field a fleet of UH-60 and CH-47D helicopters modified for aerial firefighting. 

The Coulson Aviation USA-Unical Air joint venture is but one example of new entrants in the U.S. market, more than we have seen in the recent past and some coming in with considerable financial backing. A market flooded with competitors may lead to a race to the bottom on pricing, which means that operators may have to drastically cut costs, potentially impacting safety and training.  Some operators may leave the business altogether, leaving fewer vendors competing for similar contracts.

However, capacity for now is continuing to out-strip demand.  In that regard, look no further than to large air tankers. There are still 18-22 large air tankers under contract, although 34-36 are actually available. Since the supply-demand situation is not likely to change significantly, the potential is there for consolidation into a few large companies that could drive the smaller operators out of business.

For helicopter operators, there has been little in the way of merger and acquisition activity.  However, they too may be at risk, if the trend toward large helicopters continues in the aerial firefighting world.  For some, the purchase and operating costs will be prohibitive, and as some claim, the days of the mom-and-pop operator in this industry may be numbered.

An ongoing challenge facing both helicopter and fixed-wing operators is the recruitment and retention of qualified pilots and mechanics.  Many mechanics graduating from training schools are pursuing careers with airlines, or with non-aviation companies, which generally offer better pay and benefits.  For aerial firefighting companies, increasing pay and benefits has helped, but as one of our member companies points out, the days when there were four pilots competing for one job opening are over.

Among the coming trends the industry should prepare for are budgets that remain stable at lower levels than in the past. Customer demand is unlikely to change, which implies the expectation that the industry will do the same or more for less. Night operations are also coming, thanks to new technologies that may make this possible. In addition, the industry will have to figure out how to safely integrate unmanned aerial systems used for data gathering and surveillance into the fire traffic area. We’re going to have to see what changes we’ll have to make in our operations, based on the impact they will have.  

Any changes to come will not present insurmountable challenges.  As long as the aerial firefighting industry continues to invest in people, infrastructure, and innovative technologies to fight fires with greater efficiency, and continues to build upon its truly collaborative customer relationships, I believe its continued success is assured.

George Hill is Executive Director of the American Helicopter Services And Aerial Firefighting Association (AHSAFA), the Washington-based trade association representing the interest of the privately owned and operated aerial firefighting industry in the US.

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