The helicopter industry is highly competitive. There are, however, barriers to
entry as customers rely heavily on existing relationships, an established
safety record, knowledge of site characteristics and access to appropriate
facilities. Customers evaluate us against our competitors based on a number of
factors, including, price, safety record, reliability of service, availability,
adaptability and type of equipment, the availability and flexibility to provide
incremental aircraft and different models to those primarily required and
operational experience.
We are one of the largest helicopter companies operating in the U.S. Gulf of
Mexico and one of the largest operating in Alaska. In the U.S. Gulf of Mexico,
we have many competitors, the three largest being: Bristow, PHI, Inc. and
Rotorcraft Leasing Company LLC. Several customers in the U.S. Gulf of Mexico
operate their own helicopter fleets in addition to smaller companies that offer
services similar to ours. In Alaska, we compete against a large number of
operators, including Evergreen Helicopters Inc., Petroleum Helicopters, Inc.
and Bristow. In Brazil and other international regions where we operate, there
could be several major competitors depending on the region. Our primary
competitors in Brazil consist of Lider Aviação Holding S.A., OMNI Táxi Aéreo
Ltda., Senior Taxi Aéreo Executivo Ltda. and Brazilian Helicopter Services Taxi
Aéreo Ltda.
In air medical services, there are several major competitors with fleets
dedicated to air medical operations including Air Methods Corporation, PHI,
Inc. and Med Trans Air Medical Transportation. We compete against national and
regional firms, and there is usually more than one competitor in each local
market. In addition, we compete against hospitals that operate their own
helicopters and, in some cases, against ground ambulances.
In most instances, an operator must have an acceptable safety record,
demonstrated reliability and suitable equipment to bid for work. Among bidders
meeting these criteria, customers typically make their final choice based on
price and aircraft preference.
Our contract-leasing business competes against financial leasing companies,
such as Milestone Aviation and GE Capital.
respectively. We also provide helicopters and related services to third-party
helicopter operators in other countries. In addition to our U.S. customers, we
currently have customers in Brazil, Canada, Mexico, the United Kingdom, Sweden,
Spain, Norway, Indonesia and India. Our helicopters are primarily used to
transport personnel to, from and between, offshore installations, drilling rigs
and platforms. The primary users of our transport services are major integrated
and independent oil and gas companies and U.S. government agencies. In 2011,
approximately 55% of our operating revenues were derived from helicopter
services, including search and rescue services, provided to clients primarily
involved in oil and gas activities. In addition to serving the oil and gas
industry, we provide air medical services, firefighting support and Alaska
flightseeing tours. Although historically our operations have primarily served
the U.S. offshore oil and gas industry, in recent years we have made efforts to
reduce our dependence on that market and take advantage of the mobility and
versatility of our helicopters in order to expand into other geographic regions
and to serve other industries.
We believe a key factor in optimizing results of operations is to maintain a
versatile, modern fleet. We believe our borrowing capacity under the new senior
secured revolving credit facility that we entered into on December 22, 2011 and
our strong relationships with original equipment manufacturers (“OEMs”) will
position us well to add new helicopters to our fleet and upgrade existing
helicopters, thereby maintaining an asset base suitable for use within our own
operations and for contract-leasing to other operators. We also leverage our
strong relationships with OEMs to support growth in other services, such as
selling specialty equipment and accessories for helicopters, and training. OEMs
generally support the aircraft through the sale of aftermarket parts and often
may be able to offer a lower initial purchase price because the aftermarket
part sales can offset the lower initial purchase price. As a result, OEMs have
a vested interest in aftermarket support and safety records.
We own and operate three classes of helicopters:
• Heavy helicopters, which have twin engines and a typical passenger
capacity of 19, are primarily used in support of the deepwater offshore
oil and gas industry, frequently in harsh environments or in areas with
long distances from shore, such as those in the North Sea and Australia.
Heavy helicopters are also used to support search and rescue operations.
• Medium helicopters, which mostly have twin engines and a typical
passenger capacity of eleven to twelve, are primarily used to support
the offshore oil and gas industry, search and rescue and air medical
services, firefighting activities and corporate uses.
• Light helicopters, which may have single or twin engines and a typical
passenger capacity of four to nine, are used to support a wide range of
activities, including shallow water oil and gas exploration, development
and production, the mining industry, power line and pipeline surveying,
air medical services, tourism and corporate uses.
As of December 31, 2011, we owned or operated a total of 175 helicopters,
consisting of seven heavy helicopters, 65 medium helicopters, 58 single engine
light helicopters and 45 twin engine light helicopters. As of December 31,
2011, in addition to our existing operating fleet, we had purchased and were in
possession of one Eurocopter EC225, two Eurocopter EC135s and four
AgustaWestland AW139s, all of which will become operational in 2012. As of
December 31, 2011, we had placed orders for twelve new helicopters, consisting
of one EC225 heavy helicopter, four AW139 medium helicopters, five
AgustaWestland AW169 light twin helicopters and two EC135 light twin
helicopters. The EC225, the AW139s and the EC135s are scheduled to be delivered
in 2012. Delivery dates for the AW169s have yet to be determined. In addition,
we had outstanding options to purchase up to an additional 15 AW139 medium
helicopters. If these options are exercised, the helicopters will be delivered
beginning in 2012 through 2015. Subsequent to December 31, 2011, we committed
to purchase one EC225 and other equipment.
The safety of our passengers and the maintenance of a safe working environment
for our employees is our number one operational priority. Our customers subject
our operations to regular audits and evaluate us based on our safety record and
operational fitness and we believe our attention to safety is a critical
element in obtaining and retaining customers.
We believe we have an excellent safety record and a strong safety culture
throughout our organization. We have implemented a safety program that
includes, among many other features, (i) transition and recurrent training
using flight training devices, (ii) a Federal Aviation Administration (“FAA”)
approved flight operational quality assurance program and (iii) health and
usage monitoring systems, otherwise known as HUMS, which automatically monitor
and report on vibrations and other anomalies on key components of certain
helicopters in our fleet.
We are a subsidiary of SEACOR, a NYSE-listed company that is in the business of
owning, operating, investing in, and marketing equipment, primarily in the
offshore oil and gas, industrial aviation and marine transportation industries.
Following completion of this offering, SEACOR will not own any shares of our
Class A common stock and will own all of the issued and outstanding shares of
our Class B common stock. Our amended and restated certificate of incorporation
provides for a dual-class structure of our common stock. The shares of our
Class A common stock, the class of stock we are selling in this offering, have
one vote per share. The shares of our Class B common stock have eight votes per
share. The Class A common stock is the only class of stock that will be
publicly traded. Following consummation of this offering, SEACOR will own all
of the issued and outstanding shares of our Class B common stock, and will
hold approximately % of the combined voting power of all of our issued and
outstanding capital stock. In addition, the shares of Class B common stock are
automatically convertible into shares of Class A common stock upon specified
events or, prior to a tax-free spin-off, at the option of the holders of Class
B common stock. The shares of Class A common stock are not convertible into any
other shares of our capital stock. In addition, SEACOR owns all of the
outstanding shares of our Series A preferred stock, which is convertible into
shares of our Class B common stock at the applicable conversion rates. In
connection with the consummation of the offering, we intend to convert
shares of our Series A preferred stock into shares of our Class B common
stock at a conversion rate assuming an initial public offering price of $ .
We intend to use the net proceeds of this offering to redeem additional
outstanding shares of our Series A preferred stock at the original issue price
of $100 per share, plus any accrued but unpaid dividends. Following this
offering, we expect to have shares of our Series A preferred stock
outstanding.
SEACOR provides us with essential support functions, including payroll
processing, information systems support, benefit plan management, cash
disbursement support, cash receipt processing and treasury management pursuant
to the terms of a transition services agreement, dated December 30, 2011, which
is filed as an exhibit to the Registration Statement of which this prospectus
forms a part. SEACOR also provides us with certain corporate services pursuant
to the transition services agreement, and we have negotiated an initial
quarterly charge of $500,000 for these corporate services. The transition
services agreement will continue until the earlier of when the provision of all
services has been terminated at either our or SEACOR’s option or upon an event
of default. We expect our operations will remain the same following the
consummation of the offering.
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Our principal executive office is located at 600 Airport Service Road, Lake
Charles, Louisiana 70605, and our telephone number is (337) 478-6131. We have a
website at www.erahelicopters.com.