Why is one of world’s largest operators of complex and expensive commercial helicopters, accustomed to flying in some of the world’s most demanding environments, interested in small electric aircraft and advanced air mobility?
For Bristow Group, the partnerships it has formed with multiple electric aircraft developers are part of its mission to be an innovator in vertical flight, David Stepanik, executive vice president for sales and chief transformation officer, told a Vertical Flight Society (VFS) conference in February.
Describing his role as working toward “transformation of our business from a traditional rotorcraft company to advanced air mobility,” Stepanik said Bristow plans to bring the group’s experience with aircraft operations, infrastructure, training and MRO to that transition.
Stepanik’s comments provided insight into how experienced Part 135 operators of rotary- and fixed-wing aircraft could play a crucial role in establishing advanced air mobility (AAM). He highlighted challenges such as hiring enough pilots to support the projected growth of AAM as well as opportunities such as the expected reduction in maintenance requirements through electric propulsion.
Bristow has signed letters of intent with three startups developing electric vertical-takeoff-and-landing (eVTOL) vehicles—Eve UAM, Overair and Vertical Aerospace—and one, Electra.aero, that is developing an electric short-takeoff-and-landing (eSTOL) aircraft. Taken together, they cover potential orders for up to 250 vehicles.
In each case, while nonbinding, these letters of intent are part of wider strategic partnerships under which Bristow and the OEMs are working together in areas ranging from designing and certifying the aircraft to exploring the market and planning operations. This is giving the operator a potentially pivotal role in helping to define AAM.
For a publicly traded company that is the largest customer for Leonardo AW139 and AW189 and Sikorsky S-92 commercial helicopters and generates 70% of its revenues from support of the offshore oil and gas industry, Bristow’s level of interest in small, short-range electric aircraft may come as a surprise.
“We operate 240 helicopters in 15 countries on 11 operating certificates, so we work with all the major airworthiness authorities. We’re also a scheduled air carrier in Australia with a small airline called Air North, and we operate fixed-wing aircraft in Nigeria,” Stepanik told the VFS conference.
“So we have this wealth of experience. We felt it was a natural progression to move into advanced air mobility, not as a replacement directly for helicopters but as a parallel path as the transition starts,” he said.
Bristow is one of a growing list of established operators that are becoming involved in AAM. They range from other helicopter operators such as Brazil’s Helisul to regional airlines like Mesa Air, cargo carriers such as UPS, as well as fractional-ownership provider NetJets and business aviation company Luxaviation.
“We’re at a revolutionary point in aviation. But safety in aviation is evolutionary. And you have to bring those evolutionary processes that have been developed over the years into the space,” Stepanik said. “We can help with what it takes to bring a vehicle through its development and certification and put it on operation specifications in a variety of different jurisdictions around the globe.”
In addition to aircraft operations, Bristow aims to help with the infrastructure development that will be required for AAM. “We build heliports in Nigeria, we build heliports in south Louisiana—it’s easier to build in Nigeria than it is in south Louisiana, I can tell you that,” Stepanik said. “We don’t just operate from an airport terminal or commercial heliport; we build, own and operate all that ourselves.”
Bristow moves one million people a year through its Australian airline and North Sea operations, he said, adding: “We know what it takes to operate under a high volume.”
The group has already scoped out all of the steps required to establish a commercial AAM network in a region, an exercise that has helped surface the most likely challenges. “For us, the long pole in the supply chain is going to be personnel,” Stepanik said.
“We’ve built out a hypothetical regional air mobility network . . . and when we put the numbers together it will be no surprise to anyone in this business that you need 1,000 pilots, 1,000 engineers, 300 ground support people and then a management structure on top of that. That’s our entire global company today,” he said. “And that’s for one region like Dallas or Miami. How do we build that out when we already have a pilot shortage?”
Operators such as Mesa view AAM as a way to restart a pilot-supply pipeline that has been drying up since flight-time requirements for regional airline pilots were increased. Pilots need a minimum 500 hr. of flight experience to fly for a Part 135 operator, but 1,500 hr. to fly for Bristow, Stepanik noted.
“How are we going to create that between now and 2025-26 and into the 2030s when we start getting into high-volume operation?” he asked. “Our thesis is start slow . . . [with] small aircraft in a short supply chain where you have everything you need, including infrastructure. And then the infrastructure and the public acceptance will start to build out from there, because we have got to do this right for the public as well.”
With more than a dozen companies actively progressing toward certification and production of eVTOL and eSTOL aircraft, and many more hopefuls, operators such as Bristow see the potential to loosen the grip of the small number of manufacturers and suppliers on which they are dependent.
“We buy aircraft from four manufacturers and they control the entire supply chain,” Stepanik said. Whether the aircraft are operated in Australia or Nigeria, the supply chain is centered in Europe and the U.S. “That creates tremendous inefficiencies for us and requires us to overcapitalize our parts inventory.”
One of the attractions of AAM for Bristow is the potential for higher production volumes to develop a larger and wider supply chain. “But most importantly, these aircraft are going to have fewer moving parts, less cooling and things that fail at a relatively rapid rate like gearboxes and servos,” he said.
“That’s the excitement here, because we have a cap on suppliers, and our suppliers are very expensive,” he said. “Helicopters are extremely expensive to purchase. They’re also very expensive to operate. That’s because of inefficiencies in the supply chain, one, and two, they consume a lot of components.”
Bristow also is sharing its experience as an MRO provider. “As we progress with our partners on the OEM side, we want to avoid things that need an MRO,” Stepanik said, as most of Bristow’s maintenance is performed in the field.
“To do that, you have to build a robust aircraft you can maintain without a D check or 1,200-hr. check. The higher the reliability and availability of your assets, the less of them you need,” he said. “That’s the objective here. There will be things that need to be disposed of or overhauled, but we hope there will be less requirement for MRO and more of a consumable replacement on unscheduled maintenance.”
Insurance is one potential hurdle to operationalizing AAM highlighted by Dana Jensen, senior industrial policy analyst at the U.S. Air Force’s Office of Commercial and Economic Analysis. Hull and liability insurance could be a significant operational expense for operators, but there is no evidence that eVTOL OEMs are talking to underwriters, he cautioned the VFS conference.
Traditional aerospace insurers such as AIG and Allianz are considering premiums for AAM, Jensen said. But with no actuarial operational history, insurers say they are going to be conservative—“which is code for ‘expensive,’” he warned.
Hull-loss insurance for commercial aircraft is 2-4% of airframe value a year. For AAM, “the numbers could be high enough to throw the economics behind these operations into a tailspin until there is enough data gathered for the actuaries to feel more comfortable with bringing the premiums down.”
Stepanik acknowledged the insurance challenge. Bristow has seen a 20% increase in rates in 2021 despite having no accidents because of higher payouts across the wider insurance industry. “We have engaged with our underwiters. It’s a big cost for our business. And one of the big unknowns here is the residual value of these hulls and how long their [life spans will be],” he said.
“That’s why, as we start to operationalize AAM, working with sophisticated operators who have the trust of the underwriters will benefit the whole ecosystem,” Stepanik said. “Things are going to happen, even with 10-9 safety by design, so insurance companies are going to take a conservative approach. If you’re an eVTOL OEM, and you’re affiliated with one of these big legacy carriers or operators, that business relationship is probably going to lead to lower premiums.”
The insurance challenge is just one area where Bristow expects that its experience as an operator can help get AAM off the ground. “We have a chance here,” Stepanik said. “We have a relatively clean sheet of paper with which to do it, and there is no reason why we should not.”
Related Content
