New York State of Flying
UPDATE: Flight restrictions over New York City right now are exclusively limiting Helicopter Tourism flights. New York Helicopter operates exclusively tourism flights and the NYCEDEC’s measures to reduce helicopter noise are currently limited to tour operators.
This originally appeared as a Helicopter Investor News Newsletter.
New industries need nurturing – or, at least, be afforded a fair chance of success. The urban air mobility (UAM) sector is no exception. But while UAM takes off across the globe, the New York City Economic Development Corporation (NYEDC) hasn’t helped by restricting tour flights.
New York City’s decision to quieten the buzz of helicopters over Manhattan might in the future expand stifle the nascent industry. In fact, the city’s crackdown on helicopter tour flights has now claimed its first victim – New York Helicopter Inc (NYH).
After three years of battling progressively tighter restrictions for helicopters in New York City’s airspace, flight tour operator New York Helicopter filed for Chapter 11 last week. In its declaration to the New York Bankruptcy Court, the company’s founder and CEO Michael Roth noted that the city’s decision to limit helicopter flights was the beginning of the end.
He told the New York Bankruptcy Court: “NYH began experiencing financial issues in or about January 2017 when the City of New York issued policy changes aimed at reducing air traffic over the city. Specifically, NYH was directed to reduce its take-offs and landings by 50%.”
NYH was earning about $4.6 million to $5.8 million in annual revenue from its opening in the ’90s and up to 2017. This dropped to $3.8 million in part due to the sharp fall in operating income. Landing fees across the city were also increased by a whopping 40%.
While the company operates exclusively tour flights, crackdowns on helicopter flights call into question just how stable the future of UAM is in New York City. NYH is one of three licensed tour operators in New York.
That’s not to say that city officials are hampering UAM. Blade and Uber Helicopters are offering flights to and from New York suburbs, airports and Manhattan every day. But UAM newcomers need to be wary of whether there is a gap in the market for a third player.
No one expects the city to directly nurture nascent UAM firms, but recent flight restrictions can’t help.