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Helicopter Operating Costs And Operator Tarriffs

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The formation of the Helicopter Engineers and Pilots Association of Canada is a positive step forward in providing a voice for pilots and engineers to both the helicopter operators and the Ministry of Transport.

For every individual who publicly states his support for an association there are many others who do so privately. It is a shame that more do not feel comfortable expressing themselves but because ‘association’ has connotations of ‘union’, many will remain silent for fear of negative consequences to their reputation within the rather small and close-knit helicopter community.

There are certainly powerful reasons behind the formation of such an association, one of which is wages. A factor that figures into wages is the rate at which operators lease their machines and it is often stated that over the years these rates have not kept pace with the rising prices of other services. It is also well known that some operators will lease their machinery for very low rates in order to secure business. One wonders at the wisdom of this practice, but it seems logical that the higher the hourly rate the more likely it will be that wages will be higher.

The following figures are available at the MD Helicopter website. The direct operating cost for an MD530F, a typical light helicopter is US $226.00 per hour. This number is an ideal one and in actual practice is probably at least ten persent higher. Other significant costs to be added to that are hull insurance, liability insurance, pilot’s salary and hangar rental. Even if the operation is a one man operation, there will be other costs such as office expenses, accountant’s and legal fees. If there are any support personel involved their wages must be included. In a multi-machine operation, the wages of many others must be paid by helicopter revenue although if many machines are operated these costs are less per machine. If the capital cost of the machinery is financed there are interest charges. Additionally, an amount must be included in the hourly rate that represents profit.

Effort was made to determine insurance costs over the Internet and no information was found, but the pilot’s wages alone would add at least US $100.00 per hour. At that rate, a pilot would have to fly 400 hours a year to make US $40,000.00, which is at the bottom end of the wage spectrum for US helicopter pilots.

It would seem that an operator would have to charge at least US $500.00 or $600.00 per hour just to break even.

Perhaps if anyone else has information or insight regarding operating costs and the rates that some operators charge, they would post it.

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