Neptune Aviation: An Air-Tanker Giant That Keeps Reinventing Itself

But Neptune Aviation wasn’t going out of business. They were simply reinventing themselves.

1. A Visit With The COO
2. EU vs CWN
3. A Look At The Future

In 2011, Neptune had become the first contractor to land a Next Generation contract from the USFS for Tanker 40, a British Aerospace 146 (BAe 146). Over the next six years, they started replacing their fleet of P-2V’s with the BAe 146s until, in October 2017, their last P-2V, Tanker 05, was finally retired. Many of their 7 P-2Vs found homes in museums, as the new BAe 146s took their places on the flight line. Currently, they operate a fleet of nine BAe 146s.

A Visit With The COO

Dan Snyder, who has served variously as Neptune’s Senior Vice President, President, and, currently, their Chief of Operations, took a little time to discuss the past, the present, and what might lay ahead in the future of aerial firefighting.

“We’re getting ready for another fire season,” said Snyder.

“We’ve settled into the 146. We’ve learned all its little secrets. We work with it well. We’ve fully integrated the aircraft into the firefighting role with ICAW (Instructions for Continued Air-Worthiness). We’ve developed our own program based on BAe data. We’ve found no structural issues with the airplanes. They’re extremely robust airplanes. The British definitely overbuild their products,” he added with a smile.

“It’s hard to believe it’s been ten years since we got our first 146 and it’s proved to be everything we had hoped it would be. It’s been robust, the airframe is strong and it has fit its intended infrastructure. We didn’t want to have to limit ourselves into what USFS tanker base infrastructure we could fit, which has been a good thing.”

As with everything new, there were some initial setbacks.

“We had our teething pains with the tank, but we’ve gotten really good reviews with the current system, and good coverage with the active response system that we have now,” he said proudly.

“The P-2Vs were a great airplane. It’s good to see them gone, but you miss them. It was their time to go. They got the industry to where it is today. The B-17s did the same thing in the years before that.”

EU Vs CWN

What about the USFS air-tanker contracts, which were up in the air last year?

“They’re still up in the air today,” Snyder said.

“As it sits, the USFS has two Exclusive Use (EU) contracts, which we refer to as the Next Gen 1 and the Next Gen 2 contracts. They were able to get their Call When Needed (CWN) contract, which is basically just an ordering agreement, in place for the vendors. So the USFS has access to tankers, but for the first time, we’re seeing over half the fleet not under EU contracts. From a government standpoint that’s good. They’re able to control a little more of their short-term costs, though it’s obviously going to drive long-term costs up. Last year’s fire season played perfectly into that strategy, since it was a below-average fire season, and this year looks like it may be heading for a repeat of last year.”

Supply-side economics definitely apply to aerial firefighting.

“There’s a lot of supply out there. We’re back to having about 40 air-tankers, like we had in the 1990s, that are a bit bigger, and the USFS has a lot higher expectations, and not as much demand.”

But at the end of the day, it’s still a business.

“When you’re trying to run relatively expensive aircraft with the overhead and the complexities needed to run that operation safely, contracts become very important,” Snyder explained.

“That’s why we’ve seen the consternation over contracts the last few years. A lot of people talk about response time in CWN vs EU contracts, with EU contracts ensuring that the government has aircraft there in a specific time. What I’ve seen them do is that they are pretty proactive about bringing CWN aircraft on when they begin to see the potential forecast, but you can’t really plan a business around CWN contracts. If you invest in the maintenance, you invest in the crews, you invest in growing the business, you invest in future products, those answers begin to become harder when you see more and more of your business being driven to CWN.”

Nevertheless, air-tanker contractors have to be ready for a call. “Right now I would say that every vendor is doing the maintenance, doing the training with the expectation that we’re all going to get called out at some point in time and be able to cover those costs. However, when you start to see one, two, three years back-to-back with quiet seasons and some vendors not called out at all and some vendors called out for very little, that begins to ask some very serious questions about how long we can sustain that.”

So what happens when an aircraft is on a CWN contract? “The USFS will pick up the phone on CWN contracts and ask a vendor ‘What do you have available and when can you get it to us?’”, Snyder said. “If we have the crew and have completed all the maintenance, I respond ‘We can have it to you in 12 hours or less,’ and that normally works for the USFS.”

Snyder continued. “When an aircraft is under CWN, USFS expects the aircraft to be used just like an EU aircraft – you’re expected to get to the tanker base and remain there until released. All vendors are trying to be available. They want to be able to fly when that phone call comes in. So historically, the USFS is reaping the benefit of vendors hoping to be called. One vendor, Aero Flite, was called out and released, called out and released. They had four aircraft under EU contracts and one aircraft under CWN. The one under CWN came on and off. When you have nine aircraft, how long can you do that? So I think you have to look at the number of vendors who are not called out during a couple of fire seasons to see how that’s going to impact things.”

And the price of not being ready when the call comes? “USFS looks at the cost per hour per day to the government, the proximity of that asset to the location where they need it, and the response time. So it behooves the vendor to be available, not to say ‘We don’t have pilots here and it will take them three days to get here.’ The problem is that you’re paying those pilots to be available on the off chance that a phone call might come in. So there’s a huge disconnect from being under activation and not being under activation. Once you’re activated, USFS will use a CWN aircraft just like it was under an EU contract. The difference is having that asset available when the call comes. That means the vendor is taking all the risk on to having the aircraft available, paying the employees, when it’s uncertain whether that aircraft is going to be asked for.” An expensive proposition for the contractor, to be sure.

“Our operational philosophy is going to be greatly driven dependent upon the fire season and how USFS decides to use those assets,” said Snyder. 

"But we have less than half our fleet under EU contracts. We have a purpose-modified aircraft which the government says we want to be the absolute best that can carry the absolute most, so we have to modify the aircraft. If you’re a helicopter operator, today I’m going to go harvest Christmas trees, tomorrow I’m going to sling power lines and the next day, if USFS calls me, I’m going to put a Bambi Bucket underneath it for fires. The risk level is significantly different.”

A Look At The Future

Not content to rest on their laurels after decades of successful operation, Neptune Aviation is always looking to innovate. “We’re always looking into new areas we can get into,” Snyder asserted.

“Aerial firefighting, almost across the board, is saturated. Helicopter operators are starting to see a ton of people wanting to get into the business. The SEAT [Single-Engine Air-Tanker] business is growing. We’re seeing a large number of people wanting to get into this business. Competition is good for the customer [USFS], but not always good for the operators.”

Smaller aircraft have their niche in the aerial firefighting community – early initial attack.

“SEATs and helicopters are really good at catching wildfires when they’re small. If you look at the numbers, over 90% of the fires are caught at the small size. The majority of the federal budget is spent on the remaining fires which escape early containment. You have LATs as one tool in the toolbox. You might reach a point where you say you don’t need one, but if you run into a situation where you need it, you will have problems if you don’t have it.”

What about different air-tanker types?

“We’ve looked at larger aircraft, we’ve looked into stepping down to Type IIs, but we haven’t made any decisions at the moment,” said Snyder.

“When you look at what a typical RDS [Retardant Delivery System] weighs, the load-carrying capacity, there are a lot of great airframes that are available. The problem comes when you start looking at price. Brand new C-130s are great, but the government is not going to pay for $60 million aircraft. The Be-200 is a purpose-built airplane that is a $55-$60 million airframe. Airbus products, 737s, there are a lot of different airframes available, but you’ve got to marry the load-carrying capability, the ability to operate in the FTA [Fire Traffic Area], the ability to operate out of the USFS infrastructure, and the price, which are all constantly-moving targets.”

With worsening wildfire seasons, should Neptune be thinking about purchasing more aircraft?

“That’s a hard question. Do you build more assets for an industry that appears to be saturated with platforms? Last year we dropped back to below the 10-year fire average. The number of acres burned has stayed fairly consistent for the last five years, but the intensities have increased significantly and the severity of those fires has changed. And more and more people want to live in the WUI [Wildland-Urban Interface]. My sister and her family live in Paradise, California, which was completely wiped out, but it was threatened by wildfires a number of times before. Look at Lake Tahoe. There are plenty of other places that could have a similar incident."

Snyder had a bit of chuckle when he said, “People ask me to predict the fire season and I tell them it depends on how wet the spring is, how wet the winter was, and how the summer is, and I tell them ‘I’ll let you know at the end of the season.’”

What about the latest trend in aerial firefighting: night flying?

“It’s definitely something we’re looking at and how we can get into that operation. In USFS, there’s going to have to be some education and some philosophy change because they are definitely not on board with it. Australia has been experimenting with it. CAL FIRE is looking into it from a rotor-wing standpoint.” But it may still be a while before this more dangerous form of aerial firefighting is accepted by the contractors or their customers.

“Firefighting’s our business and that’s what we’re going to be in. We’re going to keep up on technology, we’re going to bring new technology into the game as we see it, we’re always going to try to innovate. We were the first to launch this ‘Next Gen’ thing and we’re going to keep looking for what we can do to launch the next revolution of firefighting. What that is, I don’t know at the moment, but we’re going to keep looking for it.”

Neptune Aviation has been a leader in innovation for many years, a trend which doesn’t look to be stalling any time soon. So expect to see this air-tanker giant reinvent itself once again in the not-too-distant future.