Buying a Helicopter Tourism Business?! Here's What We Think
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It certainly has a reputation, the tourist helicopter business, of being a little bit dangerous. You could do all the due diligence you want and still end up with a huge surprise when it comes to this later. I think the right buyer for this would be somebody who already is in the tourism industry in these markets. Making $1.7 million a year and it's been stable, you know, that tells you this business model is working. Oh, another episode of Acquisition

We don't have 100% beard anymore. Thumbs down on just the plus in Victoria. Welcome back, everybody, to another episode of Acquisitions Anonymous. You have all four co-hosts today. We talk about a deal that came across my email and it perked my interest. It's a helicopter tourism business somewhere in the Southeast. Eight and a half million dollar purchase price. 1.7 million dollars in adjusted EBITDA, we find out.

and there's some quirky things about this they drop a couple hints about potential sba eligibility for part of it that we talk about with heather there is this really interesting nuanced thing about winning some uh winning a legal victory with their local airport to protect their helipad

We talk about, you know, kind of the spectrum of low cost helicopter tourism all the way up to areas that Heather and Bill have done like Las Vegas and Hawaii. Cover a lot of different things. Talk about what type of person would buy this business, the nuances of financing it. Great episode. Hope you enjoy. Stick around after a quick word from our sponsor.

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I just looked down and looked back up and we're recording. Thanks, Michael. Oh, great. If you guys are going to start the podcast, I'll click and record. That's how this goes. If you guys start the podcast, we're recording. I'm clicking the buttons. There was ever any doubt this is live. Sometimes we don't even know we're being recorded. Like this would be cool. Let's talk about this, this and this, but make sure we avoid this. And I look down, it's like, oh, this is on record. Yeah.

Who has the teaser? What do we, is this a helicopter airplane one? Oh, sorry. I thought you guys could see my screen. There we go. Oh, it's big. I like this one. Yeah. Who brought this one? Am I reading this one? Yeah, you read it. All right. So this is a Southeast based tourism aviation business and it is, the asking price is $8.5 million. So it's kind of a big boy.

Revenue is $4.6 million. Income is $1.7 million, and it's selling for a 4.9 multiple. So, Bill, I'm sorry. This is not your opportunity to do the math today. They did it for us. They did it for me.

Asking price, $8.50, so a little less than two times revenue, and income is $1.70, and the multiple is $4.90. So, for sale is a highly profitable aviation tourism business consisting of two entities operating from two prime locations in the southeast. With over 15 years of operating history, the company has built a strong reputation for safety, service, and customer experience, establishing a near monopoly—

A near monopoly in a high-traffic tourist destination. A recent legal victory against local government authorities has secured long-term operational rights at the airport and its grandfathered helipad, protecting the business from new competitors and significantly enhancing its strategic value. Holy cow. If that doesn't scare you, then you haven't looked at enough deals. And now they want to sell immediately. Yeah. So, I agree.

so where i go cycle in san antonio has a business like this nearby and in fact there's two of them and they compete and they offer helicopter tours of san antonio and every day i ride back and the prices keep getting lower and lower they're like 20 minute helicopter ride 19 i'm like i am not going up in a 19 helicopter you are there's you're lowering the price is not increasing demand anyway sorry that was my helicopter story uh

The company operates a fleet of four to five leased helicopters during peak season, generating over $14,000 per helicopter per day in gross revenue. The business achieves impressive margins thanks to lean operations, fixed cost optimization, and ancillary revenue streams.

Staff retention is excellent and the core management team is seasoned and largely self-sufficient, allowing the owner to operate the business passively. All helicopters are leased under a separate entity, allowing the buyer to avoid high capex and maintenance risks while benefiting from an efficient cost structure. With highly defensible market positioning, a scalable operating model, and outstanding unit economics, the business offers an exceptional opportunity for investors seeking a lifestyle business, platform acquisition, or high margin tourism asset. They give us a bit of historical financials here.

And Heather, it looks like they've been pretty steady. So 1.1 million in adjusted EBITDA per year. And 2024 was a great year. And revenue was in the high threes and then bumped up in 2024 to 4.6 million. Yeah, it looks pretty good there. Pretty consistent. All right, let's see if they have anything more here. No, there's a form to fill out. And that's about it. So Mills, what do these guys do? I think this has to be Florida. Don't you guys think? Yeah. What does the business do? What does the business do?

They are really good at marketing. They have banners outside their location and the helicopters are probably branded. You're a tourist in Fort Lauderdale and you really want to see the beach and the city and you...

you pay, I mean, $14,000 per helicopter per day in revenue is staggering. I think they say two helipads, right? Probably a couple trips per day though, right? No, no, no, definitely. I mean, these are probably an hour long tour, but if you're operating, you know, two helicopters, $7,000 per helicopter per day, it's an hour long tour. You're still talking probably 850 bucks or something. I mean, this seems like,

if it's an hour long trip, this is, this is kind of interesting. I don't know if I'm missing something on the math, but you're a tourist, you want to see the sites. And the thing, the elephant in the room with this is there has been a recent helicopter crash in Manhattan. Um, that was a high profile person with their family. I don't know if it was a helicopter tour or if they were using it as just a means of transfer. Okay.

So this I don't know, this scares me for a lot of different reasons. But yeah, it's a it's a tourism play. So it makes me think it's in a big enough city in the southeast, probably a beach town. I mean, I don't I don't think like this works in Atlanta or Charlotte, definitely not in Columbia.

Yeah, I don't think so. Have any of you all been on a tourist helicopter before? I have. Yeah. I have too. I have too. Where did you go? Hawaii, which is, I mean, it's worth it there. But I have seen them in Las Vegas and more city areas. And I don't know that I'd really be that interested in just flying over the beaches of Hawaii.

You know, without mountains or whatever waterfalls to look at. So I guess these are everywhere. But they are dangerous. And every place that operates them, if you look into it, there's been a crash. You know, at least a few years ago or whatever. They're very dangerous businesses. You know, I think it has to do with the pilots not being really...

highly experienced, you know, maybe they don't have as many hours as you might have in other types of commercial helicopters. And it's probably gets down to the maintenance, you know, trying to make make money in a tourist business. It could lead to cutting corners on maintenance anyway. And I'm not saying this business is that way, but it certainly has a reputation, the tourist helicopter business of being a little bit dangerous.

So I did it in Vegas, Heather. And it was very cool. We flew out to the Hoover Dam and through the Grand Canyon and then we flew down the strip. It was neat. And Mills, to your point, I think we paid like 800 bucks a person or something. San Antonio, the 1999 special is the outlier, Michael. Oh, my God.

Which kind of makes sense, right? All that fuel plus the maintenance on the helicopter and everything. But it was very cool. I was actually talking to the pilot while we did it, and she was ex-military. And she said she made great money doing it and that it was a great gig for her. She loved flying helicopters, but she didn't love being shot at.

obviously, and it was great and she was making good money. But as I understand it, finding the pilots is the hardest part of this business is making sure you can staff it with people who are qualified and excellent. And to your point, Heather, if you compromise on that, you get really stuck. You're like, well, I got a whole bunch of bookings. I got a whole bunch of fixed costs and I need to book revenue. And you might be tempted to compromise on the experience of your pilots, which doesn't bite you until it does.

And I think like Bill and Heather, when y'all did it, it's not just a silent tour, right? You kind of have to have a person who is not only a skilled pilot, but also has some salesmanship and the ability to present and say, hey, the history of this thing that we're flying over, like they can't just be a jerk. So you're getting like a narrower, narrower subset of people who are potential quality hires.

And I will add one thing there. They they want a tip, you know, so the the the the pilot is getting a tip at the end. And so they want to make sure you are amazed by what you've seen, which can lead also to risky things like going too close to the waterfall or what, you know, it could to make sure that you're having a great time and you're seeing something really cool. You know, they are motivated to get a really good tip in, you know, at the end of the the flight.

So I have a friend that went on the $20 helicopter ride here in San Antonio down at the Janke Airport. He's not my smartest friend. Anyway, went on the thing. And he said they got on it and once they got off the ground, the pilot turned around and started trying to upsell them on a bunch of stuff. Like, oh, would you like a bottle of champagne? Would you like a photo? Like all this stuff. Like they're in the air and the pilot's like trying to shill them on these upsells. He's like, yeah, we ended up spending 250 bucks on

I'm like, yeah, you feel a lot of pressure. You feel like if you're not going to pay, you might not make it back. They break out the menu. Would you like a safe landing? That'll be an extra $100. Yeah.

So, I mean, this business is regulated, right? I just can't. And they talk about this a little bit. I can't just decide, you know what, I'm going to buy a helicopter. I'm going to lease a helicopter like they do. I'm going to find a pilot and, you know, just start this overnight. It's just like, you know, other rides and attractions, they get inspected. The state authority regulates them.

What do you think about this recent legal victory over local government? It sounds like it's not related to their ability. Like, hey, we think we're qualified to fly and you say we aren't, but we just proved we are. It seems like it's related to the airport and a helipad. I think it's access to the helipad. Uh-huh.

It could also be noise abatement. You know, like in Kauai, I know they've had legal fights about the helicopters just being too loud around certain neighborhoods and areas. And so I think it could be both. It could be access, like they want to use the helipad for something else at the airport, or it also could be the neighborhoods around, you know, where they fly, you know, feeling like it's a nuisance. They are loud. Yeah.

Well, I think it's both. If you read the sentence, it says a recent legal victory against local government has secured long term operational rights at the airport and its grandfathered helipad. And I think that means that this helipad is probably too close and it's too loud.

Right. And now there's a noise ordinance or you couldn't build another helipad like this in their area. And I think they have probably recently sued and won long term access to this helipad. And then the sentence finishes protecting the business from new competitors, which means that I imagine this helipad is fully booked. Right. So if you want to compete with them, you can't.

Right. Like they're the only ones that can fly from this helipad. And it's probably in a place where you really want the helipad to be. And they really people don't like the noise, but it's grandfathered. So obviously you want to look into it. But this actually could be a really nice moat. Yeah, it makes me want to buy the helipad and get rid of all the helicopters. Like I'm just going to be in the helipad rental business and I have the only helipad for 30 miles. That's a good idea. Mills, is that where you were going?

No, I was just thinking, you know, it's never a positive connotation when somebody says a recent legal victory like like, oh, OK, so it could still be appealed. It could be upturned. There could be ongoing litigation. You could have backlash from this. I mean, they're spinning it as a positive thing.

I just I would have a lot more questions. And this is one of those things that you could read, you know, the legal complaint. If there was a lawsuit, you could debrief it some with the attorney. You could do all the due diligence you want and still end up with a huge surprise when it comes to this later. I mean, obviously, you're diligencing this legally, right? You're hiring a lawyer and you're digging into this. But I

I'm not like panicked by this. Like I'm going to diligence this. And if this holds up and is not going to get overturned and seems like a solid win, it is a great moat. Is there are there any specific geographies that you guys would say, you know, OK, I liked it if it was in these cities, but I don't like it in this city? Or is the revenue proof enough that like the geography works?

I mean, I think I'd care a little bit about like growth in the geography, but yeah, the revenue to some degree and profit. I mean, it's making $1.7 million a year and it's been stable. You know, that tells you this business model is working. Now, if this is some city that, I don't know, I think I'm very sour on the prospects over the next 20 years, I don't love that, but probably it's fine. Yeah, because my mind goes to what are they spending $3 million a year on?

Helicopter leases, pilots, marketing, customer acquisition. Helicopter access, landing fees for sure. Fuel. Hey, everybody. If you've listened to the show, you've probably heard us talk about franchises. While franchises can be a great path to business ownership for the right person, there's a lot of pitfalls. And it's important to be really careful as there are certainly good franchises to be in and bad franchises that you don't want to be in.

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I mean, I believe that there's real cost in this. Oh, absolutely. The maintenance, the fuel, the helipad access, the labor, you know, all that stuff. Insurance, as we mentioned earlier, is not going to be a small expense. And to be honest, I'm kind of impressed by the margins anyway. Yeah, I thought so too. I thought that actually the expenses were kind of low in my mind. I'm not sure about the, you know, they've got another entity and they're saying there's no CapEx. But I mean, if you're owning the business and you're

ultimately owning the aircraft in another entity, you still have CapEx. It's just maybe they've optimized it for taxes. But you do have to replace things. You do have to do a lot of maintenance. So I'm sure that's part of the expense as well. It's built into the lease here, I guess. Yeah. If you just look at this net income,

this net margin profile, it's 37.3%. If you take that down to the $14,000 per helicopter per day in gross revenue, they're making each helicopters making like $5,200 a day net. That just seems staggering when you think about it on that level. I wonder, you know,

How sustainable it is, especially if there's some kind of quirky thing with the leasing structure and maybe, you know, maybe we're not seeing all the way through to the true net dollars net of kind of, you know, ownership costs. This might just be net of leasing costs or something like that. But you would definitely want to understand. And this is pretty common, I will say, for asset intensive businesses like this fleet based businesses where there is a separate company that, you know, is a leasing company that

For tax advantage reasons. But the expense is still there. It's just tax optimized. Absolutely. It's just not in this one entity's income statement and balance sheet. It's in a sister company's. So there could be deferred. Go ahead. Oh, just one thing worth noting. They list income at $1.7 million and then down below they say that's adjusted EBITDA.

So it's a 4.9 multiple of adjusted EBITDA, not actual net income. So anyway, over to you, Heather. Yeah. So there is depreciation obviously added back in there. And that would be the question is how much. But there could be a deferred CapEx expense here, right? So you've got four good years they're showing us. But maybe next year or the year after, you have to buy a new helicopter. Yeah.

You know, you have to replace one. So you have to look at the fleet and how old it is and, you know, how many miles. And there comes a point where I imagine they have to replace these. Yeah. And you would want to start amortizing that to say, OK, if a helicopter costs, let's just say it's a million dollars and they last five years, then you need to factor two hundred thousand dollars a year.

in you know maintenance capex whether it's a year that you're actually purchasing one or not right and and speaking of not to bring up the the story of the uh the helicopter crash in new york but i believe it you know it appeared to be a mechanical failure uh mid-flight you know it appeared to be some kind of maintenance or you know some kind of mechanical failure i'm sure that the final report is gonna you know take a long time but it looked like it i was shocked to look up that the the

death rate fatal accident rate for helicopters is actually less than for private planes yeah it's 0.7 versus 1.1 it's actually like 40 percent lower is that per flight or how do they they do it per flight hour so they'll do like per 100 000 flight hours so and then you're 17 times more more dangerous to ride in a helicopter than you are to drive in a car

which is actually lower than I thought it would be as well. Like surprisingly safe. Who should buy this business? Bill? That's good.

I don't know anything about it. I rode an helicopter once in Vegas. You didn't know anything about pet creams. You killed it with that, so why not here? That's fair. This will be my next thing. I mean, I do like the words near monopoly. I like the words regulatory moat. At my helipad, these are all good things.

Stable demand. I mean, well, maybe stable. I mean, if you if you have a recession, like people probably not flying helicopters on their trips, they're probably walking down the beach instead. So maybe maybe that's another thing to think about also is how recession proof or not is this. How did this business do in COVID? Oh, zero, I'm sure. Yeah. Yeah.

Actually, they claim to be doing really well. Well, you don't see 2020. This goes back as far as 2021. But it's amazing, actually, that they did do, they were back as quickly as 2021. It's Florida. It's definitely Florida. Nothing was shut down. Mills, I think the right buyer for this would be somebody who already is in the tourism industry in these markets, who's printing money via something else, right? You may be

you maybe have like a scuba business or you have a bit and you're probably not printing money on scuba business, but you see what I'm saying? Like maybe you have,

one of the, a strip mall or something like that that's nearby and you could get some strategic advantage by sharing customers between those. Like that, that's where my head goes. Like I would want to see somebody already in the tourism business in, in Florida. Yeah, I think that's a great point. Like if you have, you know, a business that's somewhat related, you know, beachwear, you know, beach rentals, golf cart rentals, like you would already have the built-in distribution. So like with every golf cart rental, there's a flyer, you know, here's a 5% off coupon for helicopter rentals.

Do you know who buys this? I'll tell you who buys this. Some rich boomer trying to buy their kid a business. That's who's going to buy this. Oh, jeez. I don't want to ride in that helicopter. That's why I don't ride in these helicopters, but that's who's going to buy it.

Or ex-military, you know, helicopter pilot. I actually knew a searcher that looked at a helicopter. I just remembered at a helicopter tourism business in Hawaii while he was searching. He didn't end up buying it. He bought something else. But, you know, there's a lot of there's a lot of folks searching for businesses that are aviation nuts that I've seen, you know, that that's just really a passion of theirs. And it's something that they do or they've done professionally. And so it could be very appealing to somebody like that. I think it needs to be bought by somebody who

is very into aviation and has that experience because the maintenance, there's a whole lot to it. Recruiting the pilots. I think you want an industry insider of some kind buying this, but didn't this listing say something about an SBA loan somewhere, but I didn't see it on this page. I think it may have in the email that I got that was, you know, it said something about, you know, about that, but I don't, I don't remember exactly what it was now. Let me see if I can find the email. Yeah. Like it was like, it's,

They're not claiming it's fully SBA pre-qualified, but they said something about it. And, and,

You could get an SBA loan for something like this. Okay. The thing that I had, it's just a little footnote, SBA eligible, question mark, and it says minimal. An estimated $1.5 million might be eligible based on tax returns. That was what really jumped out at me when I read this, Heather. Okay. Now that's a clue. That made me think that they're receiving a bunch of cash. Yeah.

And it doesn't, not all their revenue shows up on their tax returns. That's what it sounds like. But, but you know, when you book a tourist helicopter, use credit cards, you don't usually come with wads of cash. So that is weird. Depends on which city you're in. I guess. Okay. Yeah.

That's what it sounds like. Yeah, tips also. But what does that mean, Heather? An estimated $1.5 million might be eligible. Are they saying $1.5 million of the $8.5 million purchase price might be eligible? I'm just wondering, like,

When I think about SBA eligibility, I think about prohibited businesses. Like you can't be in the lending business. You can't be in like, you know, vice businesses. You can't be in payday loans, like things like that. Are there...

I'm just, what does that mean? That might be eligible.

And it made it sound like they were referring to that's how much it could qualify for based on its tax return, which, of course, SBA lenders, they underwrite to the tax return adjusted EBITDA, if you will. And this would be, let's just say the income, the EBITDA of $1.7 million is on the tax return. You could certainly get an SBA loan for this. The purchase price of $8.5 million puts you

bit over the five million dollar maximum that SBA allows but you could still do an SBA loan that I think the problem you would have trying to do this as an SBA loan is not very many lenders want to take aircraft as collateral and

And it's totally a different process. You kind of need some special expertise and even valuing the aircraft and making sure that they're safe and all of that. Not not too many SBA lenders. This is not something they would do regularly. So a lot of them might just shy away from that whole process. But otherwise, I think it's eligible. So I'm not I'm curious what that really is supposed to mean.

Well, you could probably do an SBA plus a combination of like aircraft leasing, lease back. There's a bunch of aircraft leasers out there. They don't charge 7% interest. They charge 12%. I would suspect. Heather, you smiled. Did I say something stupid again?

No, no, you didn't. They do charge more. I get a lot of questions about alternative financing to the SBA program, and people are surprised that they all cost more, a lot more. Cool. Well, we are coming up on the witching hour. Do you guys want to rate this? Heather, where do you stand?

Uh, I, I, if I, if, if the buyer is into aviation and has that background, I think I'd want to see more. It's an interesting business. It could be, it could be a great one for the right person. Yeah. I like it. I like it. If you do have a monopoly on this helipad thing, that, uh, that's a good business. Otherwise I worry about somebody else buying a helicopter and charging $19 like the two guys down here in San Antonio. Yeah.

are doing. If I have a monopoly on this airport, I like it. But it's all to Mills' point, how durable is that monopoly? Mills, what do you think? Yeah, Michael, just one thing based on what you're saying. It makes me think of like if you had a spur line from a railroad or like if you had a special dock at a port or a special piece of equipment to load and unload at a port, like there's some kind of residual value there, whether or not it's being fully realized and whether or not this can continue. Yeah.

I, I, I'm curious about where this is. Like that is enough reason that I would sign the NDA just to go, is this like in Tallahassee? Is it in Miami? Is it like in rural Georgia? Like, I just want to know where, like, what's the story behind the location, you know, plot twist. It's in Alabama. Yeah.

sorry alabama i'll make fun of mississippi next time all right on that note thanks everybody for being here uh i hope you enjoyed this episode this is a really good find mills kudos to you thank you co-host of the day you win the award all right if you enjoyed this tell your friends and if you buy this helicopter deal tell us about it because it's fascinating we will come do a live episode on the helipad come pick us up in your helicopter let's go all right catch y'all later