Now, more than ever, UK HEMS charities are scrutinising their operations and we are likely to see a continued steady move from contracting with commercial helicopter operators to managing the operation in-house.
Air ambulance charities have now been established in the UK for over thirty years. Nearly all of them originally developed around a three-way collaboration. Their own operation was primarily focussed on fundraising, with a commercial operator providing the helicopters, whilst paramedics, seconded from the ambulance service, delivered the hands-on care to the patients.
The industry has evolved with a limited number of specialist helicopter businesses offering a turnkey HEMS capability which covers the whole array of aviation support required by its customers.
Outsourcing the helicopter operation has provided a handy way for new air ambulances to launch and it continues to allow charities to avoid the safety concerns and management burden associated with being an air operator.
The industry continues to develop, with 21 charities now providing UK-wide coverage. As they have become more established and their fundraising more sophisticated, we have seen them expand their capabilities and assume wider responsibilities.
Approximately half of the charities now own, rather than lease, their helicopters. Many now also operate at night and we are seeing an increase in clinical responsibility with some directly employing their own doctors and paramedics.
Four of the charities operate their helicopters directly. London’s Air Ambulance has done so since it was founded 25 years ago, whilst Devon, Yorkshire and Wiltshire Air Ambulance have all transitioned away from their suppliers relatively recently in 2013, 2017 and 2019 respectively.
The triggers for making the transition may have been down to individual circumstances, but the drivers for change appear common. By taking direct control of the operation the organisation should be able to deliver an equivalent, or even improved, service and achieve greater operational flexibility, all at a reduced cost.
With no indication of any of these four charities reverting to outsourcing, it is likely we will see a continuation of this trend.
In the last two years, a combination of pilot “churn” and organisational change within the traditional operators has been yet another trigger which has led charities to investigate the alternative to outsourcing.
This has been given extra impetus due to the pandemic which has added to their concerns over income and thus brought more focus on operating costs.
However, the task of gaining operator approvals should not be underestimated, particularly at a time when the CAA is reeling from the added demands which Brexit has thrust upon it.
Furthermore, moving the operation in-house is likely to be met with some resistance from the traditional turnkey suppliers whose business models are based on ones that have changed little in 30 years.
These commercial operators can seek solace in the knowledge that such a move will not suit all charities and that they also still have an important role to play for those that do decide to make the change.
Charities won’t be seeking to take everything in-house and are still going to look outside for their maintenance and modification services. They will also need back-up pilots and aircraft, as well as training solutions.
However, we may well see extra competition from new suppliers offering a ‘pick & mix’ approach to the different elements of the operation normally delivered through the turnkey model.
Contract durations which were originally determined by aircraft financing and resulted in them being between 7 and 10 years long are likely to become shorter too.
Hence, the traditional suppliers might do well to re-evaluate their business models and embrace this shift in the market. This will enable them to retain their business relationships with those charities moving to a new and potentially more flexible way of operating.