Thursday, December 18, 2014

What Will Cheap Oil Mean For Us In HEMS?

Image courtesy BBC News

The effects of America's flood of oil are rippling out across the world. OPEC decided to continue production at current levels, effectively assuring a collapse of prices. We probably won't again see oil selling for less than $12 a barrel - as it did in 1999 when my entire new-hire class of  Gulf of Mexico pilots got laid off from Air Logistics. But the drop in prices is going to be big.

Click here for a story about trouble in the oil and gas industry...

Every change to the status quo brings winners and losers - and fear of belonging to the latter group is why so many fear change.

So, should we in HEMS be afraid?

That depends on what you do here. If you are an operator, your fuel costs have gone down and are going to go down further. The airlines are in the news because they are enjoying reduced fuel costs, and "keeping the money." We are airlines too. HEMS stands to benefit from cheap oil. History however is full of unexpected adverse outcomes. Every silver lining has a cloud.

If you are a HEMS pilot, cheap oil - resulting in less offshore oil and gas production - will mean more competition for a finite number of  HEMS pilot seats. When the wells are idle, there is no need for a helicopter to move workers to and from platforms. Offshore pilots are going to be looking for work, and filling open HEMS positions at entry-level wages. This will decrease pressure on HEMS operators to raise pay, so we can expect stagnation in wage-growth in the immediate future.

Overtime - or "workover"  opportunities will diminish, and relief pilots (like me) will be less important  (oh well, it was fun while it lasted!) Companies will be in a position to pick and choose from the available-pilot pool, and experience-minimums will increase. On the downside, there will be more people with no HEMS experience making the same mistakes new HEMS pilots have always made, and we will suffer more crashes due to stupidity. On the plus side,  people with questionable histories will be passed over in favor of spotless candidates.

And yes, operators do compare notes about pilots...PRIA notwithstanding. There are few secrets in HEMS.

There will likewise be an increase in the size of the available mechanic pool, and the same downward pressure on wages. Companies might even be able to properly staff bases with two mechanics working week-on week-off which would improve the mechanic's lot in life. So - perhaps for you "wrenches," less pay and a better quality of life.

Cheap oil will mean more people traveling and crashing cars, More spendable cash will mean more risky behaviors - smoking, drinking, speeding, falling off golf carts and 4-wheelers. Flight volume should increase. This will keep more bases in operation, and should be good for clinicians who aren't facing a mass-reduction in other health-care production. When I started flying HEMS there were about 300 helicopters in HEMS service, now there are about 1500. So lots of nurses, medics, and RTs get to scratch the flying itch.

So, is cheap oil good or bad for HEMS?

I guess it depends on your position and perspective...

Tell us what YOU think...

safe flights.

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