ARMENIAN HELICOPTERS – AMBITIOUS COMPANY IN CHALLENGING MARKET

For over five years, the capital city of Yerevan has been home to Armenian Helicopters, the sole commercial helicopter operator in the republic of Armenia. With two Airbus H125s and one Robinson R66 in service, the company is serving a market in an unstable region. Reporter Sven van Roij spoke to company CEO Arsen Manukyan on his company’s unique business opportunities, financial challenges, and changes in the customer market.

After working as a supervisor  at the Central Bank of Armenia, Arsen Manukyan continued his career at the Armenian Ministry of Finance. He said, “After the Ministry of Finance, I worked as a chief of staff in the Civil Aviation Committee (CAC) of the Republic of Armenia, a governmental organization, responsible for aviation in all of Armenia. Whilst working in the CAC, an investor and our founding father, Karen Vardanyan, informed me he was willing to establish a company that would operate helicopter operations on a commercial basis. We started to support him and established Armenian Helicopters in February of 2018.” The company was – and still is – unique to the country. Never before had a civilian helicopter operator been established in Armenia.”

Shortly after the official establishment, the process was started to obtain an Air Operator Certificate (AOC). The AOC determines an air carrier has sufficient professional competence to ensure the safety of their operations and entitles the company to commercial helicopter transportation. “During the process, there were some changes in Armenia and we needed to make some changes in our company management. At that time, I was appointed CEO of the company,” Manukyan said.

Shortly after obtaining the AOC in June 2018, Armenian Helicopters managed to get a Part-145 certification from the European Union Aviation Safety Agency (EASA). This certification allows in-house maintenance staff to approve certain aircraft maintenance tasks and checks. Manukyan said, “For each certificate we managed to receive, we had to send our specialists abroad for training. We are still working on some documentation. We applied for our third issue of operation manuals in the beginning of February 2024. Now, our new manuals are fully compliant with the EASA-regulations.”

This year, Armenian Helicopters did receive an International Civil Aviation Organization (ICAO) audit as well as applied for a new type of AOC. In the past, the Armenian Civil Aviation Committee issued AOCs for one or two years. Nowadays, the certificates are issued for 16 years. The current certificate expires this year.

Armenian Helicopters started its operations from Zvartnots International Airport, Armenia’s main airport. Manukyan said, “Three years ago, we started to rent a piece of land east of Yerevan. Our own hangar area with several helipads was built there, along with an office building with several hotel rooms and a small training center. We started operating from this place in the spring of 2022.”

Depending on customer requirements, Armenian Helicopters also operates from other airports and helipads in Armenia and abroad. For customer convenience, we usually pick them up from Zvartnots International Airport. Another location is Dalma helipad, near the shopping center in Yerevan. “Our base station is approximately 30 minutes by car from the city center. For the convenience of our clients, we offer the option of being picked up here,” the CEO describes.

Armenia’s gross domestic product (GDP) in 2022 was $19.5 billion. The company’s market is relatively small for helicopter services. The republic’s geographical location also causes changes in Armenian Helicopters’ modus operandi. The former Soviet state is near Russia and landlocked between Turkey, Georgia, and Iran. The country is in conflict with neighboring Azerbaijan. The conflict resulted in a large-scale military offensive in September 2023, after which the Armenian self-proclaimed republic of Nagorno-Karabakh ceased to exist.

Manukyan said, “We are not doing flights to Iran due to the sanctions and due to the difficulty of getting permission from the Iranian government. We have not flown into Turkey since 2020, as we do not receive permission for those flights either. Since 2022, we have not flown into the Russian Federation. Flights abroad are thus limited to the Georgian cities of Tbilisi, Batumi and Kutaisi, depending on the wishes of the client.”

In addition to causing a decrease in orders for Armenian Helicopters, the political, financial and military situation in the region also creates a risk of security incidents for the company. The CEO explains, “We always have to make a relevant risk assessment on the planned route and organize our flights in the safest way to prevent dangerous situations, such as being shot at. Prior to 2020, this was much easier since the Azerbaijani armed forces were far from our border and we were able to make flights to much more places. We also notice the threat is doing something to the number of tourists visiting Armenia. As soon as tourists learn that gunfire is taking place in the region, we lose potential customers.”

The challenges in the region force the CEO to conduct business in a creative way. “Since the market in Armenia is very small, we have to find different types of services, which we can provide to our customers. We have to build our services in accordance with the market demand. Companies abroad with a lot of tourist sites are less affected by the challenges we are facing. Those companies are able to conduct the same type of scenic flight on a daily basis because different clients visit every day.”

Therefore, Armenian Helicopters is spreading its opportunities by not only focusing on their so-called “fixed flight tours” or passenger transportation. Manukyan said,  “Booking a charter flight is also among our customers’ options. We also conduct special operation flights. These include medical evacuations (medevac). We have contracts with the Armenian Medical Institute (AMI), the Erebuni Medical Center in Yerevan and a relevant regulation with the Armenian government. For this assignment, we can equip the H125s as ambulance helicopters to carry out a transport with medical personnel during daytime.” To equip the helicopter for this mission, and to encourage the company to carry out the mission, Armenian Helicopters received a tax benefit from the Armenian government in April 2018.

The CEO continues, “When we receive the phone call from the hospital, we can be airborne within 30 minutes. We are not able to operate as helicopter emergency medical services (HEMS). Being a HEMS-operator is a very expensive service and at this moment Armenia is not ready for such service.”

Recently, special operation flights for Armenian Helicopters have also expanded to include helicopter skydiving. Manukyan said, “We started from the summer of 2023 and became a drop zone of the United States Parachute Association (USPA). Our Armenian instructor is living in the United States and works at our location every summer to perform this task. Our strategy is to make helicopter skydiving a popular sport in Armenia. The third component of our special operation flights involve cargo-sling flights. Recently, our pilots completed their cargo-sling training and we received the appropriate documentation.”

The fourth and final subdivision of Armenian Helicopters’ special operation flights concerns heliskiing. As knowledge, skill and experience was not available in Armenia, expertise was sourced from Switzerland. Within two years, staff was trained and certified for their new assignment. Together with the Swiss instructors, suitable mountains to drop skiers on were scouted. The heliskiing operations, medical evacuations and the cargo slinging operations are being flown with Armenian Helicopters’ two H125s.

Recently, the special operations branch expanded with a new medical evacuations assignment. Due to the conflict with Azerbaijan, the EU Mission in Armenia (EUMA) was established. The EUMA monitors and reports on the security situation along the Armenian side of the international border with Azerbaijan. The EUMA is a non-executive, non-armed, civilian common security and defense policy (CSDP) mission with a two-year mandate and was deployed on 20 February 2023.

Early this year, Armenian Helicopters crews conducted a test flight with EUMA mission staff. “The aim was to test medical evacuation flights,” Manukyan said. “We can be on standby for a medevac in case of an emergency situation with EU mission staff. Our ambulance-equipped H125 will be used for this purpose. This helicopter has a red cross logo on the underside and will not be used for the purpose of patrol flights.”

Besides its diverse operational tasks, Armenian Helicopters continues to face the challenge of continuing to generate revenue streams. Manukyan said, “We also provide other services, such as technical evaluation of a helicopter before a customer decides to purchase it, and maintenance and certification support. It is our aim to make helicopter flights more popular in Armenia. We are involved with people to become private pilot license (PPL) holders and buy their own helicopters, which we can service.” Armenian Helicopters operates a civilian-owned Bell 429 in this manner.

Armenian Helicopters also houses Altezza, an event agency and venue location. The company hosts concerts, corporate events, weddings and master classes. In addition, Altezza organizes its own events, such as special occasion flights or photo shoots with static helicopters.

Armenian Helicopters operates helicopters of various types and manufacturers. This brings higher inventory costs, logistical challenges and complicates training of both ground and aircrew. Manukyan said, “We currently operate one Robinson R66 (registration EK-H001) and two Airbus H125s (EK-H003 and EK-H004). Our five employed pilots fly approximately 300 to 400 flight hours per year with the fleet. We also own one Airbus H130 (EK-H002). Until recently, this airframe was on dry lease to Turkey.

“Our main issue is the small market and the flight types, which we can provide to our customers. There are some flights which we can do only by R66. There are some flights that we can do only by our two H125s. That’s why we use different types of helicopters. Also, the terrain of Armenia does dictate the types of helicopters that we can use. For example, the R66 is used mostly for sightseeing tours. The H125s are mostly used for special operation flights, charter flights, or international flights since they are our most stable and powerful helicopters.”

Armenian Helicopters’ fleet will be supplemented in the near future. “We pre-ordered two HX50s and two HC50s in early 2023. These aircraft will be produced by the British company, Hill Helicopters. We have already made the down-payments for these four helicopters, which will be delivered to us from 2025 onwards,” Manukyan said.

Mischa Gelb, ambassador for Hill Helicopters, puts the timeline for the delivery of the three-bladed, single-engine turbine helicopter a little less tightly. Mr. Gelb does not expect to deliver the five-seat aircraft before 2027. He further clarifies, “The Hill HX50 serves private owners while the HC50 does focus on commercial users. The sole difference between the helicopters is the certification process. The HX50 involves the owner in the build of the aircraft at the factory for 10 days. This allows it to be in the amateur-built category, meaning it can come to the market much quicker and at a lower cost. Therefore, the HX50 is ideal for private and corporate use. The HC50 goes through the normal certification process, which takes longer and is more costly. Since it will be fully certified, it can be used in a business to charge people and fly for hire.”

Until then, operating a unique business remains a challenge for Manukyan and his team. Time will tell which paths are viable to remain profitable and operationally deployable.