Air tour operator Blue Hawaiian is the launch customer for the much touted EC-130B4. By purchasing 10 copies of the B4, company owners Dave and Patti Chevalier have raised the stakes for their entire industry.

By John Persinos

This cover story originally appeared in the October 2001 issue of "Rotor & Wing" magazine. These brief excerpts are reprinted with permission.

The A-Star hovers above the palm trees before landing on the elegant country club lawn. About 100 guests garbed in tropical shirts and leis are sipping cocktails in the fading twilight, their attention riveted on the helicopter in their midst.  "That’s one of our A-Stars," says David Chevalier, president of Maui-based Blue Hawaiian, the largest air tour operator in the Hawaiian Islands. "Now, here comes our new EC-130 B4. Please compare the noise levels of the two aircraft."

Dave, 50, has a soft-spoken demeanor that belies his intense competitiveness. His wife Patricia, 44, is the company’s vice president of marketing. They’ve invited the Big Kahunas of local tourism to tonight’s outdoor party on Maui , to witness the ceremonial induction of Blue Hawaiian’s $1.8 million dollar investment, the EC-130 B4.

Right on cue, the silhouette of the B4 appears in the pastel-hued sky. The aircraft, in the same dark blue paint scheme as the A-Star, is dramatically quieter than its predecessor. As the B4 lands next to the A-Star, the assembled dignitaries applaud.

"The B4 is in the vanguard of safety and noise reduction," Dave proudly tells the group. "This helicopter represents the 21st century in rotorcraft."

Blue Hawaiian is the first operator in the world to take delivery of the B4. The company’s adoption of the B4 will significantly change the dynamics of air touring in Hawaii and elsewhere.  

 

 

 

 

 

Flying First Class  

I recently flew in Blue Hawaiian’s first B4, over the breathtakingly beautiful mountains and beaches of Maui. The cabin is open and bright, providing a panoramic view for every passenger. Personal comfort is enhanced by plush seats, ample legroom and powerful air conditioning.

Blue Hawaiian’s pilots serve as tour guides. The trip also includes an in-flight digital video system that makes cassette tapes of the exterior view for passengers. "This is as comfortable as a flying Cadillac," I tell the pilot, who quickly retorts: "Better than a Caddy!"

The B4 is a hybrid aircraft, first unveiled in February at Heli-Expo 2001. The helicopter is derived from the AS-350 B3 A-Star, incorporating components of the EC-120B and a fenestron tailrotor identical to that of the EC-135.

The B4's cabin is a foot longer than the AS-350's for the 24% increase in Cabin volume (130 cubic feet versus 105 cubic feet). A standard AS-350 usually has a high-density configuration of six passengers (6+1) for tour operations: the wider cabin of the B4 allowed for the addition of one more seat. With A VNE of 155 knots, the B4 is as fast as the B2 and B3.

As a result of this crossbreeding, the B4 is versatile, quiet and safe. The aircraft's in-flight noise level is 84.3 EPNdB, about 7 dB below the ICAO limit and 0.5 dB below the existing standard for the Grand Canyon National Park. The B4 is in the forefront of the worldwide trend toward Quieter, "eco-friendly" rotorcraft.  

 

 

 

 

A Hefty Investment  

The B4's base price is $1.6 million: compare that with the AS-350 B2's flyaway price of $1.17 million. With floats, avionics, cargo swing and audio-visual equipment, we'll have invested nearly $1.8 million in the first B4" Dave says. "The remaining nine aircraft will cost $1.73 million, in final configuration, because they won't be equipped with a hook or OAS avionics package."

Blue Hawaiian's in-house completion shop equips the aircraft. additional items slated for installation into each B4 include a CD stereo; Bose headsets; a video system capable of recording four tapes simultaneously;  and a KMD 550 multifunction display that serves as both video monitor and terrain display, in conjunction with the Honeywell Enhanced Ground Proximity Warning System (EGPWS).

"We've been working with Honeywell for the past seven months to get this avionics system to function adequately in deep valleys," Dave says. "Coupled with a Garmin 430 GPS, it gives us a 3-D picture of terrain and will be a significant safety asset for inadvertent flight into IMC [Instrument Meteorological Conditions], particularly in mountainous terrain."

Multiply all of these costs by 10, and you come up with a hefty investment of nearly $18 million. Dave says he put down 10% cash for his 10 B4s, standard terms for Eurocopter. That's a big chunk of change for a mom-and-pop operation. The risk is especially daunting in light of the cyclical-and very fickle-nature of air tourism. If a full-fledged recession finally hits, the Chevaliers could get stuck with considerable payments-and underutilized aircraft.

"We'll be phasing out the AStars, either by selling them or targeting them for tours that don't fly over environmentally sensitive national parkland," Dave says. He acknowledges that the expansion was a bit of a gamble, but insists that he won't get caught holding the bag. "I'm flexible, and so is this multi-mission aircraft," he says. "I’ll always find a way to make my investment pay off."

The impetus for creating the EC-130B4, dubbed "Eco-Star," came from the air tour operating committee of Helicopter Association International. The committee, on which Dave was a member, broached the need for a quieter helicopter with more cabin space. As Dave remembers: "That idea was, how do we improve the A-Star?"

The first Eurocopter meeting on the project occurred four years ago at the Franco-German manufacturer's headquarters in Marignane; among those in attendance were the Chevaliers.

"Dave and I got to build an aircraft the way we wanted it," Patti says. "How many operators get that chance? We're among the aircraft's parents, in a way. Seeing the B4 flying prototype two years ago was exciting. We saw it in at a secret location and I thought my heart would leap out of my chest."

MacBain says the Chevaliers provided real-world advice from the field. "Their input was invaluable," he says. "The speed with which the helicopter moved from conception to reality is a commendable achievement."

The development process also benefited from the Chevaliers' closeness to their market, MacBain says. "Only a small percentage of Eurocopter's customer base operates more than 8 aircraft," he says. "Blue Hawaiian is one of our largest commercial customers, but they're still fairly small. They're not as large as, say, PHI."

All too often, MacBain says, a helicopter operator is a pilot who neglects the daily managerial grind because he's seduced by the romance of flying.  "Dave loves flying, but more than anything, he's a businessman," he says. "What really impresses me about the Chevaliers is how well they complement each other as entrepreneurs. Dave is the visionary, and Patti is the creative marketer."

Dave says the B4 will prove a winner with his fellow pilots. "Police and air medical pilots will  love this aircraft, too," he predicts. "it's quieter, requires less maintenance, and it's safer on the ramp."

Patti emphasizes the B4's multi-mission capability. "Reduced noise is important for electronic newsgathering, emergency medical services and police operations as well," she says. "Airframe manufacturers that aren't investing in quiet technology are making a big mistake."

From the Heartland to Hawaii  

Both Chevaliers are natives of Green Bay and graduates of the University of Wisconsin . Their personalities-unpretentious, accommodating and friendly-reflect their Upper Midwestern background. They met on a blind date; at the time, he was a tuna spotter, flying a Hughes 500C between Guam and Samoa in the Western Pacific. She was still at the university. They got married in 1983, a year after their first date. Today they live about six miles from the Kahului Heliport with their 14-year-old daughter, Malia.

The Chevaliers founded Blue Hawaiian in 1985, by purchasing a used Bell JetRanger with $100,000 in personal savings that was mostly earned by Dave's lucrative stint as a tuna spotter. "I always wanted to start my own business, and Hawaii appealed to me as a place to live," Dave says. "I saw the tourism boom in Hawaii, so I figured, as a pilot, that air tourism was my best bet."

Dave joined the U.S. Army when he was 18, and flew Hueys and OH-6 scouts in from 1971 to 1972. After his Army service, he earned a degree in political economics from the University of Wisconsin. He has logged 10,200 hours in helicopters and 750 hours in fixed-wing aircraft. "I previously flew tours for my company, but now I'm too busy building the business," he says.

The company maintains two other locations, both on the " Big Island " of Hawaii: one in Waikoloa and one in Hilo. Five aircraft are stationed at each of the three locations; each aircraft racks up about five flights a day, with about six passengers per flight.  

An Amazing Leap  

Blue Hawaiian's competitors in Maui are: Sunshine Helicopters (seven AS-350s); Hawaii Helicopters (three AS-355 TwinStars); Alex Air (two A-Stars and one Hughes 500); and Air Maui (two AS-350s).

Fred Adlard, director of operations for Sunshine Helicopters, says his company has no immediate plans to follow Blue Hawaiian's lead and purchase the B4. "We're not going that route." Adlard says. "We're happy with our AS-350s; they meet our needs quite adequately. They have seven seats, they're cost effective, and they afford a nice view. We'll wait and see what happens with Blue Hawaiian. They've made an amazing leap."

Adlard says despite the tooth-and nail competition, there's enough business to go around. "Sunshine Helicopters has been really busy," he says. "Our competitors are doing fine too. If we're this busy at a time when we expect business to slow down, imagine how well we'll do when the economy actually picks up again. "

About 15 tour operators ply the azure skies of the Hawaiian Islands , with fleets that run the gamut from one or two aircraft all the way up to a dozen or more. The AS-350 is by far the most pervasive model, accounting the 90%, of the states tour fleet, but also in service are Bell JetRangers, R44's and MD 500's. More than 1,700 single engine AS-350's are commercially registered world wide.

Located 2,200 miles from Los Angeles and 3,400 miles from Tokyo, Hawaii 's main island stretch over nearly 400 miles. Maui , the state's second largest island, is home to 105,000 residents; its population has grown 20% during the past five years.

Tourism accounts for 80% of Hawaii 's economy. As tourists and new residents pour into the islands, it requires marketing savvy to get their attention. These spectators expect visual drama from a tour, and no other vehicle can access Hawaii 's hidden beauty as thoroughly as a helicopter.

The Chevaliers closely guard their revenue and profit figures. It's no secret, though, that the company is the largest air tour operator in Hawaii , as measured by hours flown, fleet size and work force of 130 people, 30 are pilots and 37 work in maintenance.

All prospective employees, particularly pilots, are carefully vetted. "Our pilots must have social skills because they deal with tourists," Patti says. "Problem is, helicopter pilots tend to be one wolves. That's why, for each pilot who applies for a job, we require a videotape on which they describe themselves. We also put our pilots through a tour guide course at the University of Hawaii."

Dave says his company strives to create a positive experience with customers that resonates long after they've left the island and gone home.

"The innocent public comes to our company, and they're not used to flying," he says. "That's why tour pilots must be at the top of their games; they need to have a lot of experience and judgment. Quality control is important to me, and it starts with your people. My management style resembles an inverted pyramid; we don't dictate top-down. We're able to recruit good pilots, and turnovers is low."

Meanwhile, the company must contend with the overhead hassles that are endemic to every helicopter operation. "Far and away our biggest cost is maintenance," Dave says. "It makes up 30% of our DOCs. However, we have nearly 100% availability of our aircraft, which is amazing."

Robert Pistorino, director of maintenance at Blue Hawaiian, says the company keeps a lid on DOCs by performing all maintenance in-house. "Using our own mechanics lowers costs and enhances quality control," Pistorino says. "Dave doesn't skimp on maintenance. We have a full inventory of spare parts and good support from Eurocopter and Turbomeca."

Pistorino says each aircraft flies at least 1,800 hours a year. "We refurbish aircraft every 36 months," he says. "Measured in calendar terms, that's an acceleration of about four times what Eurocopter's manual stipulates. What we get in return is greater reliability, fewer interruptions of flights, and lower costs over the long term."

Nevertheless, Dave admits that profit margins are in the single digits. "Operators don't make high margins, but we're profitable, whereas some of our competitors are not," he says.

Patti says operating helicopters is a tough row to hoe, but it also affords stability. "This is a complicated, low margin activity that's labor and capital intensive," she says. "But then again, a lot of high-margin dot-coms are now out of business."

The Lead Log  

Sales and profits at Blue Hawaiian remained level during the last three years; activity dipped during the second half of 2000, reflecting the general economic slowdown, but rebounded this February to previous levels. Regardless of how the economy performs, Dave has abiding faith in the customer appeal of his aircraft.

"We converted to Eurocopter products in 1989 because they make a better tour ship," he says. "It's all about visibility and a great seat. Their products are reliable."

He says the downtime on his AStars is phenomenally low. "we fly a considerable amount of hours because we operate all year round," he says. "We're not seasonal. Since we started business sixteen years ago, we've flown more than 150,000 hours combined on all 15 AStars. That's more hours than any other air tour operator in the world. And yet, we've never had a transmission problem. Never!"

Buzz Levy, president of PC Publishing, a Maui-based creator of tourist-oriented advertorial magazines, says Blue Hawaiian is the bellwether of air tour operators. "If Blue Hawaiian institutes a price change, the others follow suit," Levy says. "Now, with their new B4 helicopters, they've taken a giant step forward. If you're the lead dog, the view never changes, and 'Blue' is the lead dog."

Levy points out that 60% of Maui 's visitors are from the West Coast. A downturn in California 's economy, he says, could hurt Blue Hawaiian's business. He adds, however, that Maui 's tourist tend to be affluent and sophisticated-the sort of clientele that would consider a helicopter tour as mandatory.

Island Ambassadors  

By all reports, the Chevalier's relationship with residents and local regulators is exemplary.

"We attend town meetings and adopt noise abatement routes," Dave. "We fly neighborly. The air tour industry has matured. We don't see the same level of animosity that formerly existed between operators and the public."