New Zealand's largest helicopter company is planning to move offshore, a change that would hollow out operations in this country and shift executives and management from Nelson to Australia and the UK.
Nelson-based PHI International (previously Helicopters New Zealand) runs helicopter transport operations across Africa, Europe, the Middle-East and the Asia Pacific, primarily providing transport and logistics support for the offshore oil and gas sector.
The company is proposing to close its Nelson head office of some 60 staff as part of a reorganisation to bring the firm closer to its customers. The majority of the work would move to the firm's Perth office, which would become the new headquarters for Asia Pacific operations, while some roles would move to a London office.
"It was a difficult day…an emotional day," Keith Mullett, managing director of parent division PHI Aviation said on Tuesday, after a conference call with employees.
Keith is Nelson-based but in recent years has divided his time between Nelson and the US offices of PHI Aviation, owned by Louisiana-based PHI Inc. He is now consulting employees and canvassing their views on the planned changes and expects to confirm a decision in mid-April.
Under New Zealand law, employers who disestablish jobs have a duty to consult employees about their plans before final decisions are made. The company retains decision-making power.
Keith said the company is pursuing the changes in order to put its key decision-makers close to current operations and places where the firm will pursue growth.
He said Australia is an example of that.
"Five years ago we had no oil and gas business in Australia, later this year we will have a dozen helicopters and approaching 200 people, so there's been a lot of growth for us in that market, so part of this business unit restructure is to really get closer to where those opportunities are."
In contrast, he described New Zealand as a small and stable market. The company plans to keep its regional office in New Plymouth; it currently comprises two helicopters and 29 staff who primarily serve offshore oil and gas production customers including OMV and Beach Energy.
PHI is the only helicopter operator accredited to serve New Zealand's offshore oil and gas sector, where growth is hampered because of a 2018 ban on new offshore exploration permits.
It is anticipated a "handful" of the Nelson jobs will move to the New Plymouth office.
Keith said the Covid-19 pandemic has also shaped the company's thinking (he completed five rounds of stringent isolation, four in MIQ and an additional period of strict self-isolation under a pilot plan in late 2021).
"The New Zealand Government policies or the Australian government policies are not the reason why [we're restructuring] but [they] did highlight for us the importance of having people close to the action…having people positioned closer to our customers and closer to our business operations is really important because when they weren't, and this is true all over the world, when they weren't we suffered…you know they were trapped somewhere inside a closed border and we couldn't get them to where we needed them to be."
Conversely, Keith said, there were times when the company was forced to send staff abroad without knowing when they would be able to return home.
"People that left New Zealand or other places in the world to go and tour, which is part of our business model, you know normally they'd be gone for a month, sometimes [during Covid] they'd be gone for six or seven months, it was that sort of thing."
Now borders and markets are opening back up, he said the time was right for a restructure that positioned the company for new growth. He expected that growth to come from the company's traditional energy customers, and also from sectors including mining, government services and relatively new industries like offshore wind energy.
In 2019 PHI and its main US businesses filed for bankruptcy protection and reorganised amid a painful downturn in the oil and gas business. After the restructuring in the US, Keith described a reorganisation of international operations as a logical next step.
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Helicopters New Zealand was established in 1955. Ownership moved offshore in 2011 when the company was sold by the receivers of South Canterbury Finance to TSX-traded Canadian Helicopters, but non-North American operations remained headquartered from Nelson, a structure that endured when Canadian Helicopters was sold to PHI in 2017.
John Carnegie, chief executive of oil and gas industry group Energy Resources Aotearoa, said the news was "very sad for Nelson" but that there may be a "silver lining" in the release of "good people" in a very tight job market.
By Kate MacNamara / NZ Herald.
