In the early days of Columbia Helicopters, back in 1957, the late founder and pilot Wes Lematta had trouble drumming up much business.
By Jon Bell
In November, Columbia Helicopters shipped its fifth helicopter to Afghanistan to assist the U.S. military. Columbia and other heavy-lift helicopter companies in Oregon have diversified into new markets.
In the early days of Columbia Helicopters, back in 1957, the late founder and pilot Wes Lematta had trouble drumming up much business. At the time, helicopters hadn’t yet proven themselves in commercial applications, so Lematta would use his three-seater Hiller 12B for occasional construction jobs and county fair rides.
But in the fall of that year, Lematta plucked 15 sailors off a sinking dredge in the frigid waters of Coos Bay. The national attention boosted Lematta’s fledgling business and helped plant the seeds for what, over the ensuing 50 years, has become a unique and valuable sector of the Oregon economy: the heavy-lift helicopter industry.
Today, seven Oregon helicopter companies — Columbia, Evergreen Helicopters, Carson Helicopters, Croman Corporation, Erickson Air-Crane, Helicopter Transport Services and Swanson Group Aviation — account for an estimated 85% of the world’s heavy-lift helicopter industry. According to the Oregon Heavy Lift Helicopter Consortium, the industry in Oregon directly employs 1,400 people here with average annual wages of $52,000. The Oregon Employment Department estimates that the industry employs close to 3,000 Oregonians directly and indirectly.
“It’s a pretty strong industry here, but one that I don’t think a lot of people around the state know a lot about,” says Larry Holzgang, a business development officer for Business Oregon in Southern Oregon, which is home to four of the seven OHLHC companies.
The heavy-lift industry in Oregon really began to take off in the early 1970s with the advent of aerial logging. Until 1971, Erickson Air-Crane had been known as Erickson Lumber Company, and Croman added helicopter services in 1976 to complement its conventional logging business. Over the years, however, as timber harvests in Oregon have fallen — they dropped from 6.2 billion board feet to 3.9 billion board feet per year between 1990 and 2000 alone — the helicopter companies have had to diversify.
“The decline of the federal timber program has caused ourselves and our competitors to look for other opportunities,” says Todd Petersen, vice president of marketing for Columbia. “We made a very strategic decision five years ago to look for other market opportunities.”
Where Columbia, which employs 665 people worldwide and has revenues of about $200 million, and others have found luck is in firefighting, petroleum exploration, overseas logging, construction work and military operations. Of its fleet of 18 helicopters, Columbia currently has five in Afghanistan ferrying personnel and supplies around the country; five of its CH-47 Chinooks are moving drilling rigs in New Guinea and Peru.
Erickson, as well, has had to look outside of its logging roots for new business.
“I don’t recall the last logging job we did in Oregon. It’s been a while,” says Martin Cude, construction sales manager, who spoke during a breakout session at the Oregon Leadership Summit in December. “Most of the logging we do now is in Canada and Malaysia.”
Many Oregon copter firms assist with firefighting and would like to get more involved in disaster response.
Erickson’s fleet of 17 helicopters has also installed 8,000 miles worth of power transmission lines, delivered snow for the 2010 Winter Olympics in Vancouver, B.C., and installed many of the ski lifts at major resorts around the U.S., including the newest lift at Mt. Hood Meadows in the fall.
Erickson is unique among the other members of the consortium in that it is also a manufacturer of helicopters, the Erickson S-64 Aircrane. The company’s manufacturing facility in Central Point, which employs 300 of Erickson’s 400 Oregon workers, can build four of the helicopters per year. It has manufactured 32 to date. In 2010, revenue from Erickson’s manufacturing, maintenance and services topped $118 million.
In November, the company announced it was laying off 119 employees, most of them in Central Point, in order to cut costs, and in December, it reaffirmed its plan for an initial public offering, through which it hopes to raise $75 million.
Several of Oregon’s helicopter companies have also turned to aircraft maintenance as a way to grow their revenue. Columbia, for example, recently invested about $4 million in an engine overhaul and testing facility at its location in Aurora that will expand its maintenance capabilities. The company already works on not only its own aircraft, but also those of foreign nations such as Thailand, Singapore and The Netherlands.
The seven companies came together under the heavy-lift consortium in 2006 in part as a response to missed opportunities during Hurricane Katrina. But the consortium is also helping to unify an industry whose major players all face similar issues, whether it be a lack of workforce training options or bureaucratic red tape from the likes of the Federal Aviation Administration that slows down operations.
“There’s been times when we’ve had ships grounded in Afghanistan for months because of governmental procedures,” says Elise Bair, director of business development for Evergreen Helicopters in McMinnville.
“It’s insane the way the FAA inhibits the growth of the aviation industry,” says state Sen. Betsy Johnson, D-Scappoose, who was a working helicopter pilot herself for 20 years. “These companies make Oregon proud, but the federal partners are a drag on the entire industry.”
Oregon helicopter companies would like to see FAA regulations loosened up a bit to help facilitate their businesses a little more. They’d also like to have more training opportunities for aircraft mechanics and pilots, and through the consortium, they’re also working on agreements with agencies like Oregon Emergency Management on possible contracts for emergency response operations.
“We really see excellent opportunities for growth for our helicopters and for the industry in general,” says Columbia’s Petersen.