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Bristow's Strategic Investment in Eastern Airways

June 11, 2014

February 2014 saw the announcement that Bristow Helicopters LTD had acquired a 60 percent strategic interest in the UK regional fixed-wing carrier Eastern Airways. It is a natural move for two companies with extensive interests in servicing the needs of the offshore oil and gas industry UK and adjacent waters. Here we look at the history of Eastern Airways and its relationship with Bristow over the years.

Eastern Airways began life in 1997, linking its base at Humberside Airport– on the UK’s English North Sea Coastline – with Aberdeen, center of operations in the oil and gas fields on the UK continental shelf.

The airline’s growth since then has been steady, based on a solid financial base and characterized by careful acquisitions that have enabled it to establish a strong position in the UK domestic airline market. With both rail and road providing strong competition in the relatively compact UK geographic market, Eastern Airways has built its success by providing high frequency, reliable links aimed at the premium business travel market, with a distinctive, high quality onboard service. Today, its customer base comprises predominantly high net worth individuals, typically key decision-makers in blue chip companies and businesses in the offshore energy supply chain.

Initially operating 19-seat British Aerospace Jetstream 32 aircraft, Eastern Airways received its first 29-seat Jetstream 41 three years later, before acquiring a further 12 such aircraft and associated routes from British Airways when the national carrier chose to exit the non-trunk UK regional domestic market.

These aircraft provided the backbone of the Eastern Airways fleet through its subsequent growth, and the airline now has 18 Jetstream 41s. It conducts 40,000 flights a year, serving more than 20 airports in the UK, Norway and France, where it operates internal services from five French airports, including its base at Dijon Bourgogne. Most recently Eastern Airways opened a second base in France after being awarded the contract to operate services between Lorient, Brittany, and Lyon, France’s second largest city. Eastern Airways’ UK scheduled network is strongly focused on the needs of the offshore oil and gas industry; however, it also operates other important business links, such as Newcastle to Birmingham and Cardiff, and its newest service from Leeds Bradford to Southampton. Eastern Airways’ highly focused business model has three times earned it Airline of the Year awards from the European Regions Airline Association (ERA) – one Gold and two Silver. The airline’s fleet now also includes nine 50-seat Saab 2000 jet-props, two 37-seat Embraer 135 jets and two 50-seat Embraer 145s.

The Jetstream fleet is primarily deployed on the airline’s scheduled service network, about half of which comprises movements in and out of the airline’s main operational base at Aberdeen, where Eastern Airways provides more daily departures than any other carrier. The second most important operational base is at Newcastle, in North East England, also an important regional and offshore support center.

The greater number of passengers transiting Aberdeen are working in the offshore oil and gas industry, transferring to and from Bristow helicopters to reach offshore platforms in the North Sea. The airline’s Saab fleet services the high frequency shuttle between Aberdeen and Scatsta, a forward helicopter embarkation point on the Shetland Islands, the most northerly part of the UK.

Eastern Airways provides this link on behalf of the oil and gas industry’s Integrated Aviation Consortium (IAC). In this context it has long been a close partner with Bristow, which has itself been a key player in service provision to the IAC since 1994. Currently, Bristow is the lead management contractor providing helicopter services from Scatsta Airport to the East and West Shetland Basins, and is also responsible for airport management and fixed-wing services provided by Eastern Airways. Recently, Eastern Airways announced another long-term charter out of Aberdeen, having secured a substantial new contract with a major oil and gas industry client to provide air services to Sumburgh Airport, also in Shetland. The contract is for an initial six years and has a value of more than £30 million. From June 2014, the airline will provide flights in support of the client’s offshore activities west of Shetland. Two Jetstream 41 aircraft will initially operate the services, which will then move to the larger Saab 2000. Bristow already provides associated helicopter services to this client from Sumburgh.

All this helps to make Eastern Airways the lead supplier of fixed-wing charter support to the UK’s oil and gas industry, but the airline’s charter operation is much more extensive, including, as it does, a wide variety of corporate, sporting and entertainment industry contracts across the European region. It also operates Saab 2000 aircraft on “wet lease” to British Airways to operate two routes from the highly specialist London City Airport, and it provides a shuttle service for a major defense and aerospace client transporting its employees between various UK manufacturing sites.

The airline was rewarded for its high quality charter service, being named Best Passenger Charter Airline 2011 at the Baltic Air Charter Association (BACA) excellence awards, the industry’s premier accolade.

Running this wide-ranging and dynamic aviation business demands the employment of some 675 staff, including those based at Humberside Airport, which is the airline’s headquarters.

Eastern Airways’ parent company, Eastern Airways International Limited, acquired Humberside Airport from the Manchester Airports Group (MAG) in 2012. Humberside is already a departure point for helicopter operations in the southern North Sea. Starting in 2015, it will become a new base for the UK Government’s helicopter search and rescue services, when Bristow takes over that service.

Eastern Airways’ operations at Humberside include a major in-house maintenance center and flight simulator for the Jetstream 41, part of the company’s center of excellence for pilot training. These are the physical manifestations of the airline’s focus on safety management, which has been geared to meeting the rigorous requirements of the offshore oil and gas sector since the airline’s inception. As those at Bristow know well, these typically exceed those of civilian regulators. The company has been certified and audited by major oil and gas clients.

The original article appeared in Bristow World Issue 1, 2014.