Bond is back, and will be licensed to fly
A well known name is returning to British skies with creation of a new rotorcraft operation to support North Sea oil and gas exploration and production activity. The name is Bond, Bond Offshore Helicopters (BOH), and it will be licensed to fly.
Establishment of the company effectively ends the CHC Scotia/Bristow duopoly that has reigned in the British sector of the North Sea in recent years following consolidation in the 1990s. Canadian-owned CHC Scotia, which had absorbed Brintel (British International, the former British Airways Helicopters) and Norway’s Helikopter Service Group (which since 1996 had included the original Bond Helicopters, known as BHL), currently competes against Bristow Helicopters, a subsidiary of Louisiana-based Offshore Logistics.
In response to a direct “approach by oil companies,” BOH has been set up as a private UK operation by BHL founders Peter and Stephen Bond alongside their Bond Air Services (BAS) business, an onshore twin-engine helicopter operator. Just before CHC Scotia took over Helikopter Service in August 1999, the Bonds had bought back BAS under agreements that the company would not operate in the North Sea and that they personally would not engage in such activities for a defined period that has since expired.
BAS, which is about to receive the eighth of an order for 15 Eurocopter EC 135s, is heavily involved in activities such as emergency medical services, law-enforcement operations and lighthouse crew-change flights.
Now the Bond brothers are back in the North Sea helicopter-support business with what head of commercial services David Wilson calls “the largest [UK] contract of its type ever awarded.” Under the 10-year, $400 million deal, BOH will provide crew-change services and other activities in support of BP Exploration operations starting in August next year. In the early 1990s, contracts typically covered two or three years, but later were increased to cover five-year periods. Wilson said a factor in the length of the new contract has been the utilization of new aircraft, so the agreement does not necessarily imply the beginning of a new industry trend.
Bond Offshore won the BP deal in competition against incumbent contractor CHC Scotia, which reportedly has said that the lost business represented 40 percent of its activity at Aberdeen Airport–the home of North Sea helicopter support on Scotland’s east coast. Last year the BP contract generated some $50 million revenue for CHC Scotia, according to Angela Guo at financial analyst Raymond James (Canada) Ltd. She estimates that the loss will reduce CHC earnings in 2004 to 2005 by 6 percent, leaving the company with earnings/share growth of 16 percent, “which is still decent by any measure.”
Wilson told AIN that under the current duopoly, contract rates on the North Sea have “increased massively,” and that Bond and other contractors had been approached by oil companies that wanted to see increased competition. But reintroduction of a third operator will make for “a difficult period and present significant challenges,” according to CHC Scotia managing director Neil Calvert. He told AIN: “However, having capitalized on the past two years [of duopoly] to make significant investment in facilities and resources, we are well [placed] to meet those challenges.”
Following analysis of different helicopter types, Bond Offshore has ordered “an initial fleet” of six new Eurocopter AS 332L-2 Super Pumas, chosen for their “performance, price and availability,” said Wilson. He said the Super Pumas would arrive next year, although he declined to provide delivery-schedule details beyond saying that sufficient capacity would be available to begin operations on Aug. 1, 2004.
The company is preparing to recruit qualified pilots and engineers during the latter part of this year and into 2004, and will also need ground-support staff for management, supervisory, training and line positions. The long-term nature and 18-month lead time of the BP contract has encouraged the operator to set up ab initio helicopter commercial-instrument and aeronautical-engineering training programs.
Executive chairman Peter Bond expects to advertise pilot and engineer courses “shortly,” but meanwhile is inviting interested parties to register confidentially for “future specific positions” that will arise. Wilson is “confident that payscales will be competitive” with existing North Sea pilot salaries, which were raised last year. Under a two-year deal, some CHC helicopter captains with 10 years of service are believed to receive about $100,000, the cost of which has been offset by a reduction in average seniority as less experienced entry-level crew have replaced retiring pilots.
After several months of business activity at the Bond Air Services headquarters at Staverton Airport, near Gloucester in southwest England, BOH will move later this year to Aberdeen, where Wilson expects to acquire or build an operations base. Bond Helicopters can be reached at +44 1452 856 007. (Yes, 007.)