Late For Your Flight? Just Take the Chopper

April 12, 2006 — -- Are midlevel American business people ready to pay for the same travel convenience and luxury that Donald Trump and other moguls enjoy? One New York startup is banking on it.

US Helicopter, headed by former Pan Am Airways executive Jerry Murphy, launched daily, scheduled helicopter flights between Manhattan's Downtown Heliport and JFK International Airport in March. It's the first-scheduled helicopter service to shuttle passengers between Manhattan and a local airport in more than a decade, and it's the only service of its kind operating in the United States.

The company has gambled that business travelers will be willing to pay a bit extra to avoid long car drives to the airport, and to have the convenience of checking in quickly at the heliport rather than enduring long airport lines. And the ride takes only eight minutes.

"One of the biggest problems a business person on a business trip has is how long it takes to get to the airport and how that can limit their time and work," said Murphy, US Helicopter's president and CEO. "If you can provide a one-stop check in and get them to the airport quickly, you've removed a big variable."

Travelers leaving Manhattan pay an introductory fee of $139 for a one-way ticket. The price will climb to $159 in May. Taxi service from Manhattan ranges from $50 to $60, and hired cars typically cost around $80 to $100.

Setting Up Partnerships, Thinking Expansion

US Helicopter customers are screened by TSA security at the heliport, and those departing JFK on American Airlines flights can check their baggage through to a final destination at the heliport. It's part of a partnership between US Helicopter and American, and the company hopes to set up similar arrangements with other major carriers. Passengers flying other airlines must leave the security area of the American terminal and go through security a second time to get to their gates.

There are plans to expand service to LaGuardia and Newark airports by the end of the year. Currently, the company has three helicopters in service, with one making the round-trip flight every hour and another on standby. Two more 'copters will be in service by May, and a total of eight by the end of the year, the company says.

If all goes well in New York, Murphy suggested that similar services could work across the country.

"We feel like there are the same type of customer infrastructure and same business opportunities in place in up to 10 more U.S. cities," he said. "The research has been done, but right now the focus is on New York and getting the operation up and running."

One airline analyst cautioned that the company might have a hard time finding a steady stream of customers.

"U.S. airlines service a wide mix of leisure and travel customers, business customers and some luxury customers. A helicopter company like this is really carrying only high-end business customers and high-end luxury customers," said Jim Corridore, airline analyst with Standard & Poor's. "I know they've found a price point, but not everyone will be able to afford that."

Murphy said the company consulted corporations, travelers and travel agents while formulating its business plan and found that most would be willing to pay up to $250 to $300 for the helicopter service. It hopes to carry 150,000 passengers in its first year.

Millions In and Out of Manhattan

Early sales in the weeks after the launch were positive, averaging about 75 customers a day, according to the Murphy. But it may take a while to establish a consistent customer base. US Helicopter estimates that 30 million people fly in to the three local airports every year, with Manhattan as a final destination. He believes that capturing just a portion of those customers would be enough to make the airline profitable.

"We see our customers being midlevel management people who take eight to 12 trips every year. The key measure for those people is if they are someone who could sit in an office for an extra half hour and close a $10 million deal," he said.

Corridore wondered whether most businesses would see it that way.

"You have to wonder how big a market there is," said Corridore. "It's got to be a hard business to operate, particularly with fuel costs as high as they are."

Curiosity Over Convenience

If a recent flight out of Manhattan was any indication, some of the company's early fliers have signed up more out of curiosity than convenience.

Ruwan Weerasooriya, an Australian tech entrepreneur, spent 10 days in New York networking with American companies and mining them for ideas. Before his trip, he searched the Web for interesting things to do in New York and ran across US Helicopter on a Web site called CoolHunting.com.

"I figured I wouldn't have to sit in traffic, and I can check my bags in all the way to Paris," he said. "For me, it's just for fun, but you can see how it could be useful. It's not that expensive, and if you're in town for work you can save time and get in an extra meeting before you leave."

The first customer to travel on a scheduled US Helicopter flight said he flew mostly for the sense of adventure. Bobby Weiss, a Manhattan-based real estate investor and helicopter buff, booked a round-trip flight on the very first day of operation.

"I love helicopters, but even if I didn't this is the type of service I'd use. For someone in business, what's a couple hundred bucks? You could blink and spend that much, and you're saving enough time that you can make that money back," he said.

More Than a Novelty Act?

US Helicopter went public last fall as part of the process of getting its funding in place. It started reporting financials in September 2005 and has been listed on the Nasdaq since March.

The company's profitability will depend on the willingness of customers to pay a bit more for the convenience and cachet of an eight-minute commute and the knowledge that Trump's television show, "The Apprentice," has used US Helicopter. If aggressive, nationwide expansion is really in US Helicopter's future, it will have to become more than just a novelty.

For now, passengers who have flown seem happy with the service, and dropping delicately from the sky in front of the panoramic downtown Manhattan skyline is a pretty decent perk.

"I think they'll be very successful with this," said Edward Fellson, a photographer from Los Angeles on Tuesday afternoon's flight. "Traffic stinks, and this is really fun. The only real problem is that it's only eight minutes. I wouldn't mind if it was more like 15 so you could enjoy it longer."