PHI filed bankruptcy

Discussion in 'Flight Following' started by Velocity173, Mar 16, 2019 at 1:02 PM.

  1. Velocity173

    Velocity173 Touchdown! Greaser! PoA Supporter

    Joined:
    Jul 3, 2012
    Messages:
    10,064
    Display Name:

    Display name:
    Velocity173
  2. weilke

    weilke Touchdown! Greaser! PoA Supporter

    Joined:
    Jan 26, 2010
    Messages:
    12,456
    Display Name:

    Display name:
    weilke
    Wow. How much does the medical side contribute to PHI as a company ?
     
  3. weilke

    weilke Touchdown! Greaser! PoA Supporter

    Joined:
    Jan 26, 2010
    Messages:
    12,456
    Display Name:

    Display name:
    weilke
    I the view of both PHI’s Board and management team, this is the best course of action to promote the Company’s financial wellbeing, strengthen its competitive position in the industry, and advance the interests of PHI and its stakeholders, while maintaining the Company’s commitments to its customers and, above all, the safety of its employees and passengers.

    Yeah, because that's what bankruptcy is for . Screw your creditors to improve the competitiveness of your company. At least they are honest.
     
    timwinters likes this.
  4. Velocity173

    Velocity173 Touchdown! Greaser! PoA Supporter

    Joined:
    Jul 3, 2012
    Messages:
    10,064
    Display Name:

    Display name:
    Velocity173
    Not sure financially but out of 240 total helicopters the medical side operates 70. Obviously oil and gas is their bread and butter. Heard nothing but good things from pilots who have worked for them. Old friend of mine in management offered me a job years ago in S92s but I’m not an over water type guy.
     
  5. SkyDog58

    SkyDog58 Touchdown! Greaser! PoA Supporter

    Joined:
    Jun 11, 2015
    Messages:
    12,215
    Location:
    My own special place.
    Display Name:

    Display name:
    Old dog w/o new tricks
    Got $70 million in additional funding on March 13 and then declared bankruptcy on March 15. America!! I'm not a bankruptcy law expert but that just doesn't seem right.
     
    dans2992, Fallsrider and timwinters like this.
  6. Direct C51

    Direct C51 Pre-takeoff checklist

    Joined:
    Apr 9, 2013
    Messages:
    285
    Display Name:

    Display name:
    Direct C51
    I think chapter 11 was their only option. Their loan was called. This isn't like a mortgage that you pay back every month for 30 years. When the loan term is up, you owe it all back. Chapter 7 requires you to sell off your assets to repay the creditors. That wasn't an option. With O&G down, there is no way they would sell even 1/10 of their mediums and heavys that are sitting around collecting dust. There simply are no buyers. They would have to completely destroy the company to repay that debt.

    The other option is to sell the Air Medical side. That might get close to covering the $500m debt, but it is the only profitable thing they have going right now. Tough times that O&G business. Feast or famine for sure.
     
  7. Bell206

    Bell206 Cleared for Takeoff

    Joined:
    Oct 6, 2017
    Messages:
    1,085
    Display Name:

    Display name:
    Bell206
    For those who don't know the background, more than 60% of the company's debt was due to issues prior its purchase by the current owner for a measley $20M+. Prior to that, most aircraft were in hock to some loan and those that weren't were sold to make payroll. There is not a major helicopter operator that hasn't been through Ch. 11. PHI was the last hold out. Its chief competitor, Bristow, is in worse shape as not only has their stock tanked to less than a buck, but they were caught cooking the books for a second time in less than 10 years.

    The global helicopter offshore market is heavily dependent on oil price. And after the impact of the big spill and the Saudis run at devaluing the crude price over the US entering the export market again, the offshore market took to a huge hit that it could not recover from. Add in the EC225 accident in Norway, combined, saw over a $1B+ in asset value disappear in a short period. CHC was the the 1st to go 11, then several leasing companies folded/sold out. Bristow cut themselves in half going from a $3B company to zip.

    It will be interesting how the helicopter market changes once PHI emerges out of 11. They have a subsiderary, HNZ, that was not affected by this filing. As to the EMS side, that division was separated into its own company several years ago for various reasons to include a sell off. But I think that was more toward the EMS market model that is becoming less sustainable than rescuing the O&G side from financial issues.

    Ch. 11 is reorganization to keep working and pay off the debts (prorated) rather than liquidation. And every financial institution I dealt with always preferred getting something back over nothing. Hence the $70M for PHI. CHC defaulted on $450M and got $105M in new financing a week later and are still flying today. So did GM and a number of other much larger entities. Time will tell.
     
  8. Direct C51

    Direct C51 Pre-takeoff checklist

    Joined:
    Apr 9, 2013
    Messages:
    285
    Display Name:

    Display name:
    Direct C51
    Good history on the recent history of the O&G industry. A few clarifications I would make;

    Perhaps it is true that every major operator has filed CH 11 in the O&G sector, but not true of all helicopter operators. AMC for example has never filed chapter 11 and it is certainly one of the biggest helicopter operators. AMC was sold for $2.5 billion in 2017. Compare that to PHI at it's best being worth around $700 Million. I'm not saying it won't ever happen, but it hasn't yet.

    Al isn't the "owner" of PHI. He is a board chairman and CEO of the company. It is a publicly traded company so no one person owns it. He does own the majority of the shares, at about 52%, which he purchased in 2001 for just over $30 million.
     
  9. IK04

    IK04 Pre-takeoff checklist

    Joined:
    Nov 6, 2018
    Messages:
    438
    Location:
    Copperas Cove, Texas
    Display Name:

    Display name:
    LNXGUY
    PHI will be OK. They have smart management and base their premium fees on their superior safety record.

    As one of those who has been fortunate to work for PHI, I wish them the best. I would still be working for them if I was 20 years younger!

    The offshore IFR program is not easy and requires lots of dedication and study to keep up. I actually enjoyed my annual recurrent training because I learned so much and the trainers and simulator instructors are really the best in the business.

    I flew every one of these out of Houma, LA. and I really miss the flying:

    [​IMG]
     
  10. Bell206

    Bell206 Cleared for Takeoff

    Joined:
    Oct 6, 2017
    Messages:
    1,085
    Display Name:

    Display name:
    Bell206
    Granted. However, I think that value will start its way down as changes to that portion of the industry are starting to move forward. Since there has been no success reducing EMS transport fees due to the Deregulation Act, politicians are now targeting the receiving hospitals to absorb a huge part of the cost through new state laws. I think community based ops will go away in those states once that happens.

    True. But he has closer to 75% of the voting stock which for all intents makes him the defacto owner as nothing happens without his approval. It's a public company in paperwork only.

    And I think they are on the verge of changing how the offshore makert is supported, especially if the COO sticks around.
     
  11. SoonerAviator

    SoonerAviator En-Route PoA Supporter

    Joined:
    Jul 21, 2014
    Messages:
    3,923
    Location:
    Broken Arrow, OK
    Display Name:

    Display name:
    SoonerAviator
    I’d probably add that some of the weakness in the O&G market is also due to the resurgence of the US Frac market which has pushed supply up a bunch, especially with the shackles of oil exports removed. What limited exploration capital there is usually gets spent on the onshore market, which hurts offshore market futures even more. Then you have the storage capacity constraints . . . I don’t see the offshore market getting much better unless something drastic occurs in the market.
     
    3393RP likes this.
  12. Piperonca

    Piperonca Pre-takeoff checklist

    Joined:
    Jun 11, 2015
    Messages:
    112
    Display Name:

    Display name:
    Piperonca
    I flew a Bell 47G4 (Artzybasheff's version in my avatar) for PHI back in the '70s, after leaving Army active duty. It was interesting work, to say the least. Multiple pinnacle approaches at max GWT to those platforms out in the Gulf of Mexico kept the skills sharp. It was a professionally run company, even then. Good, solid flying job.

    Of course, I couldn't swim and even though we had pontoon floats and Mae West vests the daily vista of that endless water played mental tricks with me. Later, when I was able to go back to Texas and finish up my degree, I took two semesters of swimming. No more terror and cold sweat.

    Funny story was that a bunch of Army aviators had gone to PHI, post Vietnam era. One of them was Kris Kristofferson. I remember some old timers at Morgan City saying all he wanted to do at night was sit around and play his guitar.
     
    Velocity173 likes this.
  13. retpd2001

    retpd2001 Line Up and Wait

    Joined:
    Sep 13, 2013
    Messages:
    577
    Location:
    Arizona
    Display Name:

    Display name:
    retpd2001
    PHI was a great company to work for and I also miss flying for them....
     
  14. kayoh190

    kayoh190 En-Route PoA Supporter

    Joined:
    May 29, 2014
    Messages:
    2,508
    Display Name:

    Display name:
    Kayoh@190
    You guys made rockstar money doing that kind of work, right? Looks like fun!
     
  15. Direct C51

    Direct C51 Pre-takeoff checklist

    Joined:
    Apr 9, 2013
    Messages:
    285
    Display Name:

    Display name:
    Direct C51
    This is either brilliant sarcasm, or indicative of the general public’s lack of knowledge of helicopter pilot salaries. I would say less than 0.01% of helicopter pilots are making rockstar money. And by that I mean $150k+. PHI only ever paid well if you were a heavy IFR Captain which would be $150k. SICs made about the same as the single engine guys, which isn’t great. Like $70k. When the O&G downturn happened, a lot of those captains making $150k got pushed down to SIC cutting their pay in half. Better than being laid off, but these guys had cars, mortgages, toys, etc based on their $150k salary. I say again, feast or famine in the oil industry.
     
  16. retpd2001

    retpd2001 Line Up and Wait

    Joined:
    Sep 13, 2013
    Messages:
    577
    Location:
    Arizona
    Display Name:

    Display name:
    retpd2001
    Hey, I made rock star money flying single pilot EMS. I listened to 60's rock music on my way to work and saw lots of stars flying at night under NVG's...
     
    IK04, James331 and Velocity173 like this.
  17. Bell206

    Bell206 Cleared for Takeoff

    Joined:
    Oct 6, 2017
    Messages:
    1,085
    Display Name:

    Display name:
    Bell206
    Fracking breaks even at $50/barrel. Deep water closer to $80-85. Oil price goes above that deep water will take off again. There's also a resurgence in some shelf properties that are drilling deeper in existing finds, but they also need a price point above $50.
    I don't do facebook but there is a group on it that post pics from your time frame and currently have a few 47s. You might even recognize a few names. I know the mechanic who worked on Kris's aircraft and who, along with his wife, gave him rides to Nashville when he had transportation problems. I believe most of the pilots who jammed with KK have passed on now, but there are a few pics out there.
     
    Piperonca likes this.
  18. retpd2001

    retpd2001 Line Up and Wait

    Joined:
    Sep 13, 2013
    Messages:
    577
    Location:
    Arizona
    Display Name:

    Display name:
    retpd2001
    I wish I could find a copy of an old song that he recorded in a tent in Nam, not the one that pops up on a search, but a harder to find one...
     
    Piperonca likes this.
  19. Velocity173

    Velocity173 Touchdown! Greaser! PoA Supporter

    Joined:
    Jul 3, 2012
    Messages:
    10,064
    Display Name:

    Display name:
    Velocity173
    The “new states laws” wasn’t included in HR 302. It was removed in the final compromise version. HR 302 is just watered down version of 3780 that died in Congress. There’s very little substance in HR 302 in regards to reducing air ambulance costs. Lots of “advisory” and “reporting” but nothing allowing states to enact laws against HAA providers.
     
  20. kayoh190

    kayoh190 En-Route PoA Supporter

    Joined:
    May 29, 2014
    Messages:
    2,508
    Display Name:

    Display name:
    Kayoh@190
    I don't do *anything* brilliantly, so we'll just have to go with lack of knowledge. :)

    Ages ago I flew into LFT every week, and the guys there used to talk about it. Of course then I was in my early 20s flying a small turboprop around for $55K, so perhaps the 'rockstar' definition has changed too. Heh!
     
  21. Velocity173

    Velocity173 Touchdown! Greaser! PoA Supporter

    Joined:
    Jul 3, 2012
    Messages:
    10,064
    Display Name:

    Display name:
    Velocity173
    Starting pay for SE is around $55K. $150K for ME Captain and that’s max. You also have the problems D51 brought up. I’d also heard from friends who did FO that progression from the left seat to right might be several years because the captains sit on the position til retirement.

    Much mo pay than I make in EMS but if I were to be gone 6 months out of the year, I’d just go contract in an S70 and make over $200K vs oil & gas. We get a lot in EMS from GoM companies and all the ones I talked to enjoyed the work but they got tired of the schedule. Well, one guy thought the flying was boring. I can see that happening. Then again, most flying does get old after awhile.
     
    Last edited: Mar 17, 2019 at 11:18 AM
  22. Bell206

    Bell206 Cleared for Takeoff

    Joined:
    Oct 6, 2017
    Messages:
    1,085
    Display Name:

    Display name:
    Bell206
    Exactly. The laws I'm referring to have nothing to do with the helicopter operator who enjoy federal oversight. The state-level laws target the receiving hospitals which each state does control. In effect the news laws are an attempt to regulate the hospital to off set the high transport cost to their patient. One draft I read set an "acceptable" rate structure for helicopter transport and if the patient is admitted and their transport bill is above the rate limit, the hospital will be required to pay the difference. There are reasons AMC sold and others are positioning themselves.
     
  23. Bell206

    Bell206 Cleared for Takeoff

    Joined:
    Oct 6, 2017
    Messages:
    1,085
    Display Name:

    Display name:
    Bell206
    Maybe post the question on the PHI facebook group i mentioned above. He supposedly wrote several songs sitting in those trailers in MCY also. The page starts out with: PHI's faces....( I think.)
     
  24. Velocity173

    Velocity173 Touchdown! Greaser! PoA Supporter

    Joined:
    Jul 3, 2012
    Messages:
    10,064
    Display Name:

    Display name:
    Velocity173
    The hospital will gladly make up the extra cost. They’re still getting the “business” of the receiving patient by heli transport. Most hospitals are getting tax payer revenue for indigent patients as well. Then of course you got HAA flight programs where the cost is completely covered.

    If anything the rural flight programs will survive and the non profit hospital programs will go under. Which has been the norm for the past 30 years. Hospitals are finding out operating their own helo and crew is too expensive to handle. And AMC ain’t hurting for business. While they shuffle from here to there, their business plan is solid. If they go under, another Corp will be there to pick up the pieces.
     
    Last edited: Mar 17, 2019 at 1:28 PM
  25. Bell206

    Bell206 Cleared for Takeoff

    Joined:
    Oct 6, 2017
    Messages:
    1,085
    Display Name:

    Display name:
    Bell206
    Will be interesting to see how glad they will be if it ever becomes a state law and have to pay it. Most hospital programs in my experience sphere were rather tight when spending money and if they were required to pay say $30k for each patient flown in and not be able to pass that cost back to the patient.... At least from what I'm hearing. There are several varieties going around but goal is to limit patient cost to around $10--15k per flight regardless if 3rd party payment or paid out right. Most community based programs couldn't survive on that payment model.
     
  26. James331

    James331 Touchdown! Greaser!

    Joined:
    Apr 18, 2014
    Messages:
    18,660
    Display Name:

    Display name:
    James331
    Because let’s blame the medevac that saves you, not the insurance company who refuses to pay up when you get hurt. The one with the best lobbyists and marketing sadly wins.
     
  27. Direct C51

    Direct C51 Pre-takeoff checklist

    Joined:
    Apr 9, 2013
    Messages:
    285
    Display Name:

    Display name:
    Direct C51
    If that is the way it goes, I don't think the hospital will struggle to incorporate $15k in to an ER bill that could easily be over $100k. Some hospitals charge upwards of $50k just for the trauma activation. Raise that arbitrary fee and you are mostly there.

    I think AMC is truly leading the way here with the insurance companies. They have focused on working with insurance providers to become "in network" partners. That reduces the payout to AMC, but almost eliminates the cost to the injured. This seems more ethical than selling "flight insurance" to the the old and poor that already have medicare/medicaid/mediCAL which negates the flight insurance anyhow.
     
  28. Cici

    Cici Pre-Flight

    Joined:
    Sep 7, 2018
    Messages:
    79
    Display Name:

    Display name:
    Cici
    Their main problem is the death of shelf properties. I started my career in the Gulf (as an engineer drilling, fracing and producing wells). I flew PHI many times and they were always a classy outfit. Ultimately, the company i ended up working for ran their own fleet. I have since shifted to working land assets, and there isn't a single person who started their career at the same time as i did who isn't doing the same. I didn't keep up with everyone, so I'm sure a couple may still be working GOM, but most likely deepwater.
     
  29. Velocity173

    Velocity173 Touchdown! Greaser! PoA Supporter

    Joined:
    Jul 3, 2012
    Messages:
    10,064
    Display Name:

    Display name:
    Velocity173
    Problem is, Medicare / Medicaid and private are all complaining that air ambulance rates are outstripping what they can pay. Costs have quadrupled in the last 10 years and it’s now coming to a head.
     
    Zeldman likes this.
  30. James331

    James331 Touchdown! Greaser!

    Joined:
    Apr 18, 2014
    Messages:
    18,660
    Display Name:

    Display name:
    James331
    Thus is the problem with non full free market healthcare, right now we have this odd mix mash of private and goverment, when things need to stand on their own in the market without goverment propping them up, prices make more sense.
     
    Bell206 and Velocity173 like this.
  31. Direct C51

    Direct C51 Pre-takeoff checklist

    Joined:
    Apr 9, 2013
    Messages:
    285
    Display Name:

    Display name:
    Direct C51
    Well a lot has changed in EMS over the last 10-20 years that increased the cost, but a lot of it was for the better. Look at the equipment we are flying now. There are a lot of twin SPIFR aircraft. Even the singles are 407's, ASTARS, EC130s. (Almost) no one flys 206s anymore. These twins and bigger singles are way more expensive to buy and maintain. Training has gotten better, more advanced, and more expensive. Pilot and Medcrew pay has increased. Something no one thinks about is the cost of a positive safety culture. How much does each WX turn down cost when it might have been possible to scud run it. This is a good change, but it comes at a cost. WX minimums and repercussions were different back then.

    Of course a lot of the increase in cost is due to flight volume decreasing. With so many bases being added everywhere, 25 flights a month has become the norm, instead of 60+. The fixed costs remain the same, aircraft, hangar, pilot/crew salaries. Less flights mean less payers to divide that fixed cost. Combine that with poor reimbursement rates and now there are even less payers to split up those fixed costs.

    It's not just ambulance rates increasing. All hospital costs have increased exponentially.
     
    Zeldman, James331 and Velocity173 like this.
  32. James331

    James331 Touchdown! Greaser!

    Joined:
    Apr 18, 2014
    Messages:
    18,660
    Display Name:

    Display name:
    James331
    I agree with much, but the safety stuff saves money, one high profile crash and it can take out a whole company, or at least cost contracts and calls.

    The tech also helps, yeah SPIFR might cost more in equipment and training, but properly implemented you’re also getting a higher flight acceptance rate.

    As for having too many bases, again I think if we let freemarket freemarket it would work itself out.

    Pay wise, think a good pilot is expensive, try a cheap bad pilot.

    Per the costs, I remember somone comparing a x Ray cost back in the day, adjusted for inflation to getting a x ray today, waaay more expensive now, and with modern tech cutting labor costs and all, makes ya go hmmm
     
  33. Velocity173

    Velocity173 Touchdown! Greaser! PoA Supporter

    Joined:
    Jul 3, 2012
    Messages:
    10,064
    Display Name:

    Display name:
    Velocity173
    Won’t be long before the 407 is approved for SIFR also. When that happens, some of these programs will shed their twin for singles to improve profit margins.
     
  34. Direct C51

    Direct C51 Pre-takeoff checklist

    Joined:
    Apr 9, 2013
    Messages:
    285
    Display Name:

    Display name:
    Direct C51
    I have been hearing that for years, but I doubt whether that is going to happen. I wouldn't fly a 407 in IMC. I thought the 407 was a good single to fly, VFR. The additional risk to myself just isn't worth the company savings some bucks over an EC-135. I flew IMC in a 206, but I didn't know what I didn't know back then.

    What happens to FAR 135.181 when the 407 is certified for IMC?
     
  35. Velocity173

    Velocity173 Touchdown! Greaser! PoA Supporter

    Joined:
    Jul 3, 2012
    Messages:
    10,064
    Display Name:

    Display name:
    Velocity173
    But it’s only seriously been considered until recently.

    https://www.ainonline.com/aviation-news/defense/2019-03-01/bell-working-ifr-407-finishing-525-year-0

    I’d feel more comfortable flying a 407 IMC than my Velocity. Better equipped than most SE pistons out there.
     
  36. James331

    James331 Touchdown! Greaser!

    Joined:
    Apr 18, 2014
    Messages:
    18,660
    Display Name:

    Display name:
    James331

    I wonder if B52 pilots think people are crazy to go IMC with less than 8 engines?
     
    Zeldman likes this.
  37. Velocity173

    Velocity173 Touchdown! Greaser! PoA Supporter

    Joined:
    Jul 3, 2012
    Messages:
    10,064
    Display Name:

    Display name:
    Velocity173
    That’s almost as crazy as a PC12 pilot flying SPIFR!
     
    James331 likes this.
  38. Direct C51

    Direct C51 Pre-takeoff checklist

    Joined:
    Apr 9, 2013
    Messages:
    285
    Display Name:

    Display name:
    Direct C51
    After an engine failure if I break out at 500’ in a helicopter I’ve got maybe 10 seconds before I hit the ground. In an airplane, I’ve got closer to a minute, maybe 45 seconds. There’s a lot to be said about that.

    Also, have you ever tried an auto in IMC? It’s about 10,000x harder than holding best glide airspeed and heading towards the nearest airport in your velocity.

    Sorry James, I know you were joking about the B-52 stuff, but I think you are out of your element here.
     
  39. Velocity173

    Velocity173 Touchdown! Greaser! PoA Supporter

    Joined:
    Jul 3, 2012
    Messages:
    10,064
    Display Name:

    Display name:
    Velocity173
    Well what did you think about flying TH-67s IFR? The Navy has been using TH-57s for far longer than the Army and neither branch has had any issues flying IFR SE. Odds of what you’re talking about are so slim it’s not even worth bringing up.

    And yes, never had an engine failure IMC for real in a helicopter but I’ve done several in the sim. Not difficult maintaining best glide. I’ll take busting out at 500 ft in a helo over a SE fixed wing any day. Velocity through the trees at 60 kts or a helo at almost zero airspeed. That’s a no brainer.
     
    Last edited: Mar 17, 2019 at 5:06 PM
    IK04 and Piperonca like this.
  40. Direct C51

    Direct C51 Pre-takeoff checklist

    Joined:
    Apr 9, 2013
    Messages:
    285
    Display Name:

    Display name:
    Direct C51
    I like the discussion. Like I said, I didn’t know what I didn’t know. I was also 20 years old and fearless. But really, how often are those TH-57s flying in low IFR? Not to mention a second set of eyes watching for altitude and the ground. I have never had an engine flame out on me, but I have had to pull an engine back or off more than once. If I was IMC in a single any of those times, I can’t say I have a 100% confidence of not crashing. In a twin, it’s not an issue.

    I guess we will have to disagree on busting out of an auto at 500’. I bet you wouldn’t even have time to react to complete the auto adequately, let alone aim at anything. You will be nearly 100% focused on the instruments trying to maintain attitude and rotor. I bet you would be lucky to even notice you broke out if at night. Also, the chances of gliding to an airport in an airplane at IFR altitudes is not terrible. Unless you are over an airport, you aren’t autoing to anything of your choosing. I’ll tale 60 knots in to the trees of my choosing at 500fpm rate of descent. You won’t die crashing the velocity in to the trees at 60 knots, just don’t spin it in.