Silver State Helicopters

The company was founded in 1999 at Henderson Executive Airport with one Robinson R22 helicopter.[4] In 2007, Silver State Helicopters expanded into the agriculture field with the purchase of Central Washington Helicopter. Silver State's intent was to give their students a chance to gain experience while allowing current pilots opportunities to advance their careers.[5]

The company expanded into flight training in 2003, with a model based on the United States Army’s Fort Rucker based helicopter training program and an aim of establishing a helicopter school in every US state. Silver State Helicopters expanded at an unprecedented rate for a helicopter company, especially one that specialized in flight training. Its corporate headquarters was 500 East Cheyenne Avenue in North Las Vegas, Nevada and had flight academies located in 34 cities around the United States. By 2006, the company was 12th on Inc. magazine's list of the top 500 privately held companies in the United States. Airola sold the company to New York investment house EOS Partners in 2007, creating Silver State Services Corp. He moved from being President and CEO and became the General Manager instead. The plan was to give Silver State the opportunity to grow at an accelerated pace in the areas of flight training and other commercial operations.[1][6]

Silver State initially attracted students by running television advertising in major urban centres, inviting interested people to come to a recruiting seminar and promising an "exciting career flying helicopters". The recruiting seminars featured a "carnival-like atmosphere" of helicopter rides with the charismatic Airola describing their future flying helicopters. The first recruiting seminar was expected to attract 100 people, but over 1,000 attended, convincing Airola that the plan had great potential. As a result he expanded his recruitment efforts throughout the country.[1]

Airola's pitch told seminar attendees that for an "investment" of just US$69,900 a Silver State Helicopter Academy location would take them from ab initio to a commercial helicopter license, certified instructor with an instrument rating in just 18 months. The program was carried out by a combination of classroom instruction, unlimited use of flight simulators at each location and 10 hours a week of helicopter flight time.[1]

The factor that convinced many students to enroll was Airola's promise that most graduates would be hired by Silver State itself. The company provided access to student loan writers and distributed loan applications. Once students had their letter of acceptance they were required to provide a loan application fee of US$500. Students were required to sign a contract and code of conduct with classes starting within three weeks of recruitment. The terms of the student loans included that repayment was to commence at the conclusion of instruction, or after 18 months, whichever came first, at a rate of US$1000 per month. The loan agreements included a clause that the company would be paid one third of the full amount at the conclusion of 30, 60 and 90 days from the start of training, provided that the student was still receiving training at those points. This meant that the company had been fully paid for 18 months of training after only three months.[1]

Silver State was initially interested in pursuing status as a United States Department of Veterans Affairs-approved flight school so that training could be provided to military veterans. The administration has much more stringent requirements for refunds than the company was willing to meet and so the company abandoned these plans, rather than change their loan programs. The company Vice President of training operations, Randy Rowles, explained that management informed him that "We only want about 20 percent of these people to finish." In an interview with Rotor & Wing' magazine Rowles explained that the company intended from the start that the majority of students would voluntarily cease training after the first three months, leaving them with the full debt for the loan and the company without the expense of training them. Many students did abandon the training because the school locations were understaffed, overcrowded with students and lacked sufficient aircraft. When the students did not complete their training in the 18-month period they had to start paying back their loans, but without having completed their licenses and without employment, forcing many to quit training to try to find jobs. Rowles told management that they must stop recruiting until the backlogs could be cleared, but he was overruled and recruiting was stepped up.[1]

The company's contract, charter and tourism fleet of turbine aircraft were being used predominantly on non-revenue flights between recruiting venues to bolster local school locations and make it appear that they had more aircraft. This also meant that the company did not have jobs available for its graduates. Throughout 2007 the company started selling off aircraft from its training fleet to raise capital to increase recruiting, which further slowed down training. Orders for simulators were cancelled and aircraft ready for delivery from Robinson Helicopter were not picked up.[1]

Randy Rowles summed up the company philosophy: "Silver State didn’t care about providing the service. Silver State cared about getting paid for the service."[1]

Silver State had expanded their business into training potential Air Traffic Control candidates through their Air Traffic Control Academy in New Braunfels, Texas. Silver State claimed 13 of their 15 graduates from their inaugural class were offered employment with the Federal Aviation Administration.[7][8]

Silver State had planned to open another helicopter flight training academy location at Stewart International Airport, about 50 nautical miles (93 km) north of New York City, including establishing a shuttle service from Stewart to Manhattan by the end of 2007.[9]

On 23 May 2008 US Senator Bill Nelson (D-Fla) called for a Federal Trade Commission investigation of Silver State, indicating that he believes that it was a Ponzi scheme. Senator Nelson said:[15][16][17]

"What Silver State was doing was taking the $70,000 up front and then it was using it immediately and they were trying to go out and recruit more students to get more $70,000 per student and therefore pay expenses as they went along with the money they were collecting from the students. Now if that's what this investigation ends up being, what that is a ponzi scheme."[17]

Writing in Rotor and Wing magazine in March 2009, Ernie Stephens concluded:

It’s been a little more than a year since Silver State Helicopters (SSH) abruptly shut its doors on Feb. 3, 2008 and went out of business. That day also marked the last time that approx. 2,000 of its flight academy students saw any hope of getting the training they had paid nearly $70,000 for in advance. The perceived – and very probably factual - scam has been the talk of the helicopter industry ever since. In fact, it has become a verb in some places: "If I sign up for lessons, you’d better not do a Silver State on me!"[1]

Silver State Helicopters fleet at time of bankruptcy:[23]

Helicopters:

• 139 - Robinson R22
• 38 - Robinson R44
• 1 - Bell B206B-3
• 6 - Bell B206L-1 / L-4
• 2 - Bell 407
• 5 - Bell B222/B230
• 1 - Bell UH-1H
• 1 - Eurocopter SA315
• 2 - Hughes 500D

Fixed wing

• 3 - Cessna 172
• 1 - Cessna 414

This article incorporates text from this source, which is in the public domain: the NTSB Aviation Accident Database

On March 27, 2007 in Ponte Vedra Beach, Florida, a R-44 Raven II from Silver State at Craig Municipal Airport suffered a mechanical failure which led to loss of directional control.[24] The loss of control led to a fatal crash of the aircraft which took the lives of the instructor Tamara Williams and student pilot Juston Wyatt Duncan, 24. The fatal flight was the first flight after a 100/300 hour maintenance inspection was completed which included a 30-minute test flight before returning the aircraft back into service. Tamara's sister Shannon filed a wrongful death lawsuit against Silver State Helicopters in August 2007.[25]

On February 6, 2006 in Helena, Montana, a Silver State R-44 N7085U was intentionally crashed by its commercial helicopter instructor pilot in a successful attempt to commit suicide. The National Transportation Safety Board determines the probable cause(s) of this accident as follows: The pilot's intentional suicide. The unauthorized use of a helicopter and impairment by alcohol were factors.[26]

On September 20, 2005 in Baker, California, a Silver State R-22 Beta N957SH crashed during a positioning flight of new helicopters to their respective destinations. The flight originated at the factory when Silver State took delivery of 12 new helicopters. The accident pilot was assigned to fly his helicopter to North Las Vegas following 3 other Robinson helicopters. The aircraft were spaced about 15 minutes apart. The accident pilot departed Torrance Airport (Zamperini Field) at about 2:25 pm local time and was attempting to arrive in North Las Vegas by 4:00 pm. The normal flight time for this route in this type of aircraft is 2.5 to 3 hours. The accident pilot flew into adverse weather conditions which included rain, low clouds, lightning and moderate turbulence. A California Highway Patrol pilot had warned the accident pilot earlier of the rain and lightning to the northeast of the accident pilot's route. The next morning the Silver State office determined the accident pilot did not reach his destination and initiated a search. The pilot was killed in the crash.[27]

• List of defunct airlines of the United States

• Silver State Bankruptcy website
• Silver State Helicopters Closes its Doors (Out of Business!) Feb. 08 - Vertical Reference
• Silver State Helicopters Closes its Doors (Out of Business!) Feb. 08 - Just Helicopters
• Silver State Helicopters at airliners.net