This video was made possible by Skillshare. Learn new skills for free for two months by
being one of the first 1,000 to join at http://skl.sh/wendover10. The term “helicopter airline” is one that
most are probably not familiar with. Simply, it’s an airline, transporting passengers
or cargo, that uses helicopters. Of course, not all helicopter companies are
truly airlines, since many, if not most, civilian applications of helicopters do not involve
transport—the people or things inside often land right back where they took off. Helicopter airlines have been around almost
as long as helicopters themselves, but they certainly are not widespread. There was, however, a time when helicopters
were believed to be the future of short-haul passenger transport, so what happened? The opportunity for helicopter airlines emerged
around the 1950’s. When passenger aviation first began, cities’
first airports were located rather close to the cities themselves, as they just didn’t
need as much space. Around the mid-century, New York’s primary
airport was LaGuardia, Chicago’s was Midway, DC’s was National, Paris’ was Le Bourget,
and Tokyo’s was Haneda—all airports fairly close to their city centers. These airports were relatively small and generally
had short runways, but that wasn't a problem because passenger demand was small and airplanes
were too. After all, the smaller the airplane, the shorter
the runway needed, and vice versa. These small airports even worked for the long-haul
flights of the time since, in general, before the 1950s, these were done on relatively small
airplanes that would make multiple stops on longer journeys. However, with the introduction of the de Havilland
Comet in the 1950s, and other passenger jet aircraft soon after, airplanes were growing
larger, range was increasing, and passenger demand rose too. That meant that all the small airports of
the past wouldn’t cut it and so, cities looked to build larger airports more suited
for the jet age. New York’s primary airport shifted from
LaGuardia to JFK, Chicago’s to O’Hare, DC’s to Dulles, Paris’ to Orly, and Tokyo’s
to Narita. Each of these larger airports were further
from their city centers, though, as that was where there was space. In many cases, the smaller, closer airports
remained in operation for domestic or regional flights, but in other cases they closed down. That’s how we got to the reality today where
many cities’ airports are an hour’s trip from the city center. Of course, the impact of this distancing varied
depending on the type of flights passengers were taking. For example, with a seven-hour flight from
New York to London, the additional 45 or so minutes it would take to get from Manhattan
to JFK, over LaGuardia, only extends overall travel time by about 7.5%. However, on the one-hour flight from New York
to DC, this would extend travel time by nearly 20%. This trend of distancing of airports from
their cities had little impact on long-haul flights, but it had a huge effect on short-haul
flights meaning that planes were now less competitive compared to cars or trains. Nowadays, via JFK, it takes just 30 minutes
more to travel from Manhattan to downtown Charlotte than from Manhattan to downtown
DC, even though Charlotte is more than twice as far. There are always diminishing marginal returns
to air travel’s efficiency as distance decreases, but moving airports further from cities increased
this to the point that, below a couple hundred miles of distance, airplanes are not the fastest
means of travel. Helicopter airlines were supposed to solve
that. It was quite the niche business model concept,
but the 1950’s, 60’s, and 70’s saw a small wave of these particularly in Los Angeles,
San Francisco, Chicago, and New York. SFO airlines, for example, operated an extensive
network around the bay area serving San Jose, Palo Alto, San Francisco Airport, Oakland
Airport, downtown Oakland, downtown San Francisco, Marin City, Berkley, and Concord. SFO Airlines’ fares were quite reasonable—to
go from Berkley to SFO cost just $9 which, inflation adjusted, is the equivalent of $75
today. With a flight time of 10 minutes and prices
comparable to a taxi, the choice for the consumer was easy. This route network was primarily intracity,
all flights were within the same metro area, but the hypothetical next phase of this business
model’s expansion was for intercity flights. The idea was that helicopters could replace
or augment short-haul flights as a quick way to get between city centers. From New York’s Downtown Manhattan Heliport,
which is just a ten minute walk from the New York Stock Exchange, one could run regular
passenger flights reaching Philadelphia in 30 minutes, Baltimore in 60 minutes, and DC
in 70. From Wall Street, the fastest one could reasonably
travel door to door to DC in a car, train, or plane would be about four hours. With a passenger helicopter leaving steps
away, that would be cut down to two. So, helicopters offered the possibility of
intracity travel for the same price as taxis, and intercity travel in half the time—with
so much promise and potential, what went wrong? Well, it turns out that it wasn’t so much
that anything major went wrong, but rather that, when they started, a lot of things went
right. Most specifically, the helicopter industry
in the US was supported by significant federal subsidies. Up until 1965, the federal government pumped
almost half a billion dollars, inflation adjusted, into passenger helicopter service in Los Angeles,
San Francisco, Chicago, and New York. This made it relatively easy for these companies
to break even, but then, in 1965, the subsidies stopped coming. It was then all and exclusively up to the
helicopter airlines themselves to turn a profit, and that’s where the problems started. Helicopters are tremendously expensive. A Bell 206, for example—one of the most
common passenger helicopters—costs about $600 per flight hour to operate in terms of
fuel, maintenance, and other variable costs. On top of that, there’s the cost to buy
it, millions of dollars, the cost of the pilot, hundreds of dollars per hour, the landing
fees, up to hundreds of dollars per flight, and the cost to run the company managing the
helicopter. This all means that a helicopter like this
will cost in the thousands of dollars per hour to operate, but it can only seat between
four and seven people. That math is simple. Helicopter companies rely on a steady stream
of people who value an hour saved in the many hundreds of dollars. That market certainly exists, but at least
in the 70s and 80s, it proved too small to keep helicopter airlines afloat without subsidies,
especially after a spate of high-profile accidents highlighted the increased danger in comparison
to airplanes and drove passengers away. And so, one by one, Los Angeles, San Francisco,
Chicago, and New York’s major helicopter airlines each failed. What followed was the dark ages of passenger
helicopter airlines. Market forces whittled these down to just
the strongest in the few markets that could feasibly support scheduled passenger helicopter
service. Those certainly do exist, but there are not
many of them. For example, there has long existed a passenger
helicopter airline operating between the financial hub of Hong Kong and the gambling hub of Macau. While the cities are only 40 miles or 65 kilometers
apart, they sit on opposite sides of the Pearl River estuary. The primary means of transportation between
the two is therefore an hour-long ferry, however, for wealthier individuals, of which there
are plenty in both Hong Kong and Macau, this helicopter shuttle connects the two cities
in 15 minutes for about $550. A somewhat similar service exists between
the country of Monaco and its closest airport in Nice, France—turning a 45 or 60 minute
drive into a 7 minute, $140 flight—and then there are a few other less notable examples
of scheduled passenger helicopter airlines, including a couple of subsidized services
to isolated places without runways, but for the most part, few helicopter airlines survived
through the turn of the century. These dark ages continued until around 2010. It was at that time when there started a tiny
but noticeable renaissance of the business model. One of the early innovators in this resurgence
was Blade, which grew first by offering flights from Manhattan to New York’s airports. Other companies soon followed, including Airbus
and Uber, to set up similar services all around the world. Airbus’ effort later closed down, but both
Blade and Uber’s services have now been operating for a number of years. What’s notable about Blade in particular
is that they have partially fulfilled the vision that helicopter airlines’ innovators
imagined decades ago, but mostly not with helicopters. They operate flights that travel outside the
New York metro area directly from Manhattan, rather than from LaGuardia, Newark, or JFK,
but these are on seaplanes, rather than helicopters. Leaving from the East River, these reach the
Hamptons in 40 minutes or Nantucket in 70 minutes—both popular getaway spots for wealthy
New Yorkers. Prices are steep, at $800 to the Hamptons
and $1,100 to Nantucket, but this service acts as some evidence that some markets can
support more expensive service from city centers. The expansion of such services seemed imminent. Cape Air, after years of trying, was granted
government approval in early 2020 for a one-year trial period of regularly-scheduled passenger
seaplane flights between downtown Boston and downtown New York. With travel times of an hour and fares around
$400, these flights would target a customer segment much closer to mass-market, but at
the time of writing, the first of these flights have yet to be scheduled and the service seemingly
might have become a victim of the pandemic-induced travel downturn. Seaplanes could be a short-term solution for
interurban air travel bypassing airports, but longer term, it’s clear that the future
involves tiltrotor vertical takeoff and landing aircraft. These aircraft take off like a helicopter,
then tilt their propellers 90 degrees to fly like an airplane. This allows them to take off without a runway,
but achieve speeds and efficiencies far greater than most helicopters. Currently, no such aircraft is in non-military
passenger service, but plenty are in development. Uber, for example, has plans to launch air
taxi service using such aircraft—initially in Dallas, Los Angeles, and Melbourne. It still has huge amounts of regulatory and
technological challenges to surpass before this is possible, but the future of short-haul
premium air travel seemingly might not involve airports. Uber’s plans involve constructing small
“skyports,” as they call them, around cities, and these could be as simple as a
repurposed parking garage roof. It’s tough to imagine a near-future where
the masses are flying from city center to city center as there’s just a natural limit
to scale. The mass-market solution for faster intercity
travel is clearly high-speed rail, but the barrier to entry for private companies in
this is enormous considering the infrastructure requirements. The beauty of vertical take off and landing
aircraft is the lack of infrastructure needs, but that does mean operational costs are much
higher. Costs don’t matter as much, though, because
such services wouldn’t really be competing against commercial airlines or trains, at
least at first. Rather, they’d be competing against the
private aviation market since, for business travelers, they could offer an overall travel
time comparable or better than private jets. The potential market is quite premium, but
penetrating a small, yet highly lucrative market is enough to make expensive city center
to city center service worth pursuing for certain companies. Whether such a concept will truly be an aspect
of the near-future is yet to be seen, but if it is, it could help solve the paradoxical
inefficiency of short-haul air travel. For those of you looking to make videos just
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