Revenues Up, Earnings Down at Air Methods

Air Methods, the largest helicopter air ambulance provider in the U.S., last year posted an 8 percent increase in revenues, to $1.17 billion, but reduced earnings against a backdrop of slashed capital expenditures, higher maintenance costs, base closures and the significant underperformance of a recent major acquisition. During an investor call meeting yesterday, Air Methods said that fourth-quarter revenues increased to $297.5 million from $272.4 million a year before, but that earnings per share dipped by 5.3 percent.

Patient transports increased 11.1 percent, same-base transports increased by 1.5 percent, and net revenue per patient transport increased by nearly $400, to $12,875, from a year ago. Additionally, air medical aircraft maintenance expenses increased by 13 percent per flight hour last year, while fuel expenses dropped by 13 percent. However, the company noted it expects fuel expenses to increase by 20 percent this year.

Company CEO Aaron Todd cited as contributors to the subpar performance: “an industry-wide decline in demand” and the failure of Air Methods’ $222 million acquisition of Tri-State Care Flight last year to meet early expectations. In response to overall lower demand, the company closed or consolidated 24 bases in 2016 and cut capital spending by $92 million. Going forward, Todd said, the company will focus on better utilization of its aircraft and expanding the footprint of air medical operations.