In a shocking move that was weeks in the making, Silver State Helicopters shut its more than 40 facilities last month and sought a court-supervised liquidation.
The North Las Vegas, Nev.-based company said it shut down all operations at 1733 PST Feb. 3 due to a "rapid, unprecedented downturn in the U.S. credit markets, which severely curtailed the availability of student loans." Silver State blamed that downturn for a subsequent drop in student enrollment as a factor in the privately owned company’s demise.
It added it would seek liquidation of its assets and settlement of debts under Chapter 7 of the U.S. Bankruptcy Code.
Silver State executives had been scrambling in the preceding weeks to strike deals with investors and lenders that might save the company. Its fate reportedly was sealed when key lenders told Silver State just days before the shutdown that they would no longer underwrite loans for its students.
For the past two years, the industry watched in amazement as Silver State enrolled more than 2,800 students at 34 newly established training locations across the United States. Some onlookers saw that expansion as a bold move that would solidly position Silver State as the premier helicopter training institution in the world. Others viewed the company as a house of cards that would collapse when it got too big.
In a company profile, Silver State said it ran commercial flight and training out of 44 locations in 18 states with more than 850 employees. It said that by 2006 its three-year, 2,785 percent growth rate made it the fastest growing helicopter company in the world. Its fleet included Bell Helicopter and MD Helicopters aircraft (four Bell 222s, one 230s, two 407s, five 206Ls, and one UH-1H and two MD-500s). The bulk of its fleet, however, consisted of 160 Robinson Helicopter R22s and 40 R44s.
Rumors of the shutdown swept the Internet like a tidal wave after employees received a lengthy e-mail from Silver State’s founder and president, Jerry Airola, sharing that news just hours before entrances were padlocked and guards posted at company sites. Flight instructors began passing on the grim news to their students. The company didn’t publicly confirm the shutdown for almost 24 hr.
A former police officer in Los Banos, Calif., Airola opened Silver State in 1999 and began providing contract police helicopter services to jurisdictions that otherwise would not have the money to own and operate airborne law enforcement assets. Silver State expanded into other services, making it one of the most successful privately owned companies in the country.
By last year, Silver State was pushing hard into the training business. With the goal of opening at least one flight training center in every state, it began an aggressive advertising campaign that included TV commercials showing helicopters engaged in a variety of missions. The voice-over invited viewers to begin "an exciting career" as a helicopter pilot, and explained how Silver State’s training could make that dream come true.
In November 2007, Silver State told Rotor & Wing about 2,900 students were enrolled its flight academy. But numerous students questioned where their $70,000 tuitions went, saying there were so few Silver State aircraft and simulators they rarely got a chance to practice in flight what they were taught in the classroom.
Silver State’s abrupt closure has left its students furious over paying tens of thousands of dollars and not having the licenses they were promised. Even the prospect of getting a refund is bleak, now that Silver State has sought liquidation under Chapter 7 of the bankruptcy laws.
Silver State’s other commercial operations, such as airborne law enforcement leases and tour operations, are also closed, leaving their employees looking for work and their customers without those services. — Ernie Stephens