1
State Sponsored Repatriation…. Sound Business Model?
In 2001 I was charged with invigorating a strategic alliance between MedAire and Norwegian Air Ambulance (NLA). I knew little of the Scandinavian repatriation market but was eager to learn. Colleagues were quick to point out that Europe represents an amalgamation of 25 different countries (i.e. EU Members) with different cultures, sometimes monetary systems, local regulations etc. Our strategic alliance had little to do with air ambulance logistic but by virtue of office co-habitation I learned a lot about the different European air ambulance operators.
Quick Disclaimer: The following is strictly a personal impression/opinion based on my interaction with many European air ambulance operators and probably not shared by my friends at NLA:
National Providers:
There are a number of air ambulance operators that may receive direct or indirect funding for a portion of their operating expenses via their Government, e.g. REGA, NLA, TAA or others. Direct or indirect simply means they receive grants, have an element of state ownership or have exclusive contracts with their government for repatriating nationals. Clearly, every government has different policies and considerations for repatriating citizens that are ill or injured abroad, e.g. Travel insurance, the financial means to pay etc. The intricacies of this model are too many and i’m not qualified to provide a substantive/meaningful overview. If you manage to secure a contract like this, the indirect benefits certainly give you an edge on your competitors, i.e. as a means of reducing fixed costs like owned/leased aircraft.
Developing Countries:
It would seem to me that there is a significant opportunity for operating dedicated air ambulance and/or a blend of charter and air ambulance in developing countries. With the burgeoning economies in India and China their populations are certain to travel thereby, requiring repatriations. The Middle East, although relatively small by comparison to India and China on a country by country per capita basis, does represents a tremendous opportunity citizen and expatriate repatriations.
I was surprised when the United Arab Emirates introduced their first air ambulance, Royal Jet (aka Royal Med), and we didn’t see this model employed. I discussed it with Tim Gabriel, their first CEO, but certainly did not get a feel as to why it wasn’t selected. They were on a buying spree with BBJ’s a Challenger and Gulfstream. Not your typical air ambulance fleet! Charter was the clear focus for the business so the air ambulance suffered. (A classic conflict with operators who run both charter and air ambulance.) I know traditional economic rationale now drives their business and as a result, these services are outsourced. From the national perspective, the local (ie Emiratee) population is too small for this to get a lot of attention. The population majority is made of expatriates and the local is economy booming. Subsidizing a national operator for the benefit of an expatriate population is not likely to be considered. In fact, the costs of supporting the expatriate population was a big driver in the new national insurance legislation.
‘State Sponsored Repatriation’ can be discussed in many different contexts. Within the business context, it appears that the only benchmark for successful operations are from countries that have a long standing tradition of social benefits/medicine. From a capitalist perspective the social influence on business does skew the lines of ‘pure’ competition but i’m confident that the social influx of money requires extra layers of management and personnell to account for the spending etc. Could that make it a level playing field? Not sure………
I’m facinated by the competitive dynamics and confident there are a lot of people within the repatriation industry who can shed more light on this. I’d be grateful your thoughts/comments.
My best,
Aaron
In my opinion it depends on the size of the subsidy from social benefits type of countries versus the capitalistic perspective. In general, I think social influence generates costly buracracy and that may level the playing field for free enterprise companies to compete. However, if a social subsidy(ie government supplied cash) is large, then the government often imposes certain trade restrictions that reduce or eliminate foreign competition based on free enterprise. The result is, natural market forces can not interplay to produce quality service at competitve prices. In the end, the buyer pays more and may receive less.
I too, am intterested in the market dynamics of the repatriation industry and would like to hear from the experts.