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Feasibility of scheduled helicopter service in the Vancouver area

University of British Columbia

The objective of this thesis is to determine whether a scheduled helicopter service is feasible in the Vancouver area. The helicopter can provide the major advantage of transportation directly to the center of any area, be it downtown or an airport terminal building, at speeds in excess of those attainable by most surface modes of travel. This potential for time savings makes a helicopter service commonly desirable. However, cost and revenue considerations are critical to the implementation of a helicopter service. Cost and revenue estimates have been proposed, developed and tested for applicability in the Vancouver area. Consideration of cost and revenue data allowed conclusions regarding commercial feasibility. Study of benefits and costs external to the helicopter operation itself then permitted examination of the economic feasibility of a scheduled helicopter service in the Vancouver area. The subject of this thesis is recognized as being both broad and complex. This study is but a brief investigation of the subject and only some of the major forces have been considered. In fact, any one major section of this thesis could warrant a significantly large study in itself. It was deemed worthwhile to embark on the entire study while recognizing that only the major factors could be considered as the value of the entire project would almost certainly be of greater value than any one of the parts. Restricting the thesis to the study of either costs, revenues or benefits would not allow conclusions regarding commercial or economic feasibility. Conclusions to the broader problem were deemed desirable. The annual operating cost for a fleet of three S-61-N helicopters has been estimated at $3.2 million. The forecast revenues for a route serving Victoria, Vancouver Airport, Vancouver downtown, Comox, Powell River and Campbell River are $1.48 million, $1.58 million and $1.69 million for 1968, 1969 and 1970 respectively. Resulting losses which exclude any capital cost allowance are $1.72 million in 1968, $1.62 million in 1969 and $1.51 million in 1970. A sensitivity analysis indicates that even if revenues were doubled (a highly unlikely possibility) from twice the forecast number of passengers with fares constant or visa versa, service would still incur a $0.24 million loss in 1968. A study of the indirect benefits that could accrue from this hypothetical service indicates little justification for government subsidization. Airline financial assistance, particularly for the significant amount required does not appear warranted. Lack of forecast commercial feasibility and insufficient justification for government subsidization or airline assistance to compensate for the difference leads to the conclusion that a scheduled helicopter service in the Vancouver area is not feasible although it is operationally possible.

Text

2011-07-22

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http://hdl.handle.net/2429/36270

Business Administration

University of British Columbia

Graduate