Erickson Air-Crane Takes Advantage of its Unique Vertical Integration Experience to Capture New Markets in MRO, Manufacturing, and Engineering

Central Point, Oregon, USA — Erickson Air-Crane Incorporated, holding the Type Certificate, Production Certificate, Repair Station Certificate, and being the world's largest operator of S-64 Aircrane helicopters, enjoys the distinction of being the only aerospace company in the world to both manufacture and operate aircraft. This mutually beneficial, yet challenging arrangement has given the Company an unprecedented ability to perfect a worldwide Supply Chain Management capability based on 35 years of first-hand experience conquering operator-OEM logistics challenges. "No question about it, over the years of being a manufacturer and operator, we have become intimately aware of the cause and effect relationship within the entire Supply Chain." Says Rick Fraenkel, Vice President of Plant Operations for Erickson Air-Crane. He adds: "We own and operate a fleet of helicopters around the world with an additional fleet owned by customers that depend on our ability to complete projects, produce parts, and deliver resources and personnel when needed. By utilizing our advanced project management, replenishment, and planning technology, we meet business and financial goals for our company and customers."

In business since 1971, Erickson purchased the Type Certificate for the S-64 in 1992. Already a certificated repair station, Erickson's extensive aircraft and component overhaul and repair facilities quickly led to the company obtaining a United States Federal Aviation Administration (FAA) Production Certificate. Erickson's manufacturing endeavor started with the complete conversion of a CH54-B to the world's first Standard Category S-64F, which rolled off the assembly line in 1993. Since then, the Company has converted fifteen CH54-A models to S-64E's and eight CH54-B models to S-64F Aircranes for its own operating fleet. Since 2001, over half of the aircraft produced in Erickson facilities have been purchased by foreign governments

Erickson's experience, diversified beyond the S-64, encompasses work with several major product lines including S-61, SH-3, Kamax, Bell 204, 205, 206, and the MD 500. The processes included complete teardown and strip, inspection, significant airframe sheet metal alterations, and modifications to the aircraft.

Erickson Air-Crane's facilities, with specialized equipment and skilled personnel, are available to accomplish structural and components manufacture, maintenance, repair, and overhaul. Aircraft manufacturers and operators can take advantage of the state-of-the-art technologies and practices of a Part 145 Certificated Class III and IV Repair Station complete with a staff of resident Designated Engineering Representatives (DERS) to assist in repair, modifications, and approval. Erickson Air-Crane's comprehensive in-house Engineering Departmentsis also available for design, structural analysis, and certification projects.

***Notes to Editors***

Critical Chain Project Management

Critical Chain Project Management (CCPM) is a breakthrough for streamlining the flow of work through multi-project pipelines in an environment with a high degree of uncertainty. Thus, it greatly facilitates the management of projects.

We are challenging policies, not behaviors. It is a myth that you need to change how people behave (procrastination, multitasking, unnecessary polishing of already finished work, etc.) in order to improve project performance. The reality is that the following policy changes have given us much better results:

Replacing measurements that require individual tasks to finish on time with the ones that drive low work-in-process (WIP). Mandating a minimum amount of protective time in each project, typically 50% of the sum of the tasks, to assure uninterrupted flow of work. Making project due-dates sacrosanct, to be changed only by senior management.

Behaviors have changed gradually in response to these changes in policy. Since upper-management supports these new policies, the changes are sustainable.

In the execution of CCPM, we have been able to reduce overtime, increase quality and deliver projects on or ahead of schedule. CCPM execution also allows us to know if a project is at risk, very early in the project, thereby enabling management to shift resources or allocate overtime earlier in a project in targeted areas, which will bring the project back on schedule.

Product & process improvement examples

Compressor

Process improvements:

Cycle time reduction for overhauls: 65 to 20 working days

30% increase of time before removal from aircraft

Product improvement examples:

Implemented the Sermatel Coating of parts which eliminates corrosion and reduces erosion.

Implemented a shotpeen program for welds which has improved reliability.

Fuel control

Process improvements:

Cycle time reduction for overhauls: 60 to 30 working days

330% increase of time before removal from aircraft

Product improvement examples:

Redesigned N2 flyweights for increased reliability

Developed Hyson repair for CBA housing assembly which reduces wear and leaking.

Main gear box

Process improvements:

Cycle time reduction for overhauls: 64 to 20 working days

242% increase of time before removal from aircraft

Product improvement examples:

Redesigned planetary thrustwashers which eliminated wear

Redesigned the primary bevel gear oil shield which eliminates oil churning and subsequent main gear box overtemps

Erickson Air-Crane Boosts Product Support in Partnership With M7 Aerospace

Central Point, Oregon — Erickson Air-Crane ("Erickson") will be sending an S-64F Aircrane center fuselage section, repaired by M7 Aerospace ("M7") to Italy that will significantly shorten the heavy maintenance schedule and put one of Erickson's eighteen fleet Aircranes back into operation months ahead of schedule.

Erickson's receipt of the fully (Return to Service) approved center section represents the most recent hallmark within an already successful partnership between Erickson and M7 Aerospace spanning Parts Supply, Manufacturing, and MRO. "Our relationship started more than 18 months ago with M7 emerging as a key airframe parts supplier for Erickson." Says Kerry Jarandson, Director of Manufacturing for Erickson Air-Crane. He adds: "They also went a step further and obtained an S-64 rating for their existing repair station which has allowed us to achieve extensive repair of our center sections ahead of schedule while devoting our own facility manpower to more critical aircraft sales obligations."

"We were very confident M7 could not only repair and modify the section with new electrical wire harnesses, hydraulic and fuel plumbing, sheet metal structure, and machined parts, but could also fabricate the needed parts in-house with little reliance on outside sources." Said Robert Dutton, Director of AeroStructures Manufacturing for M7 Aerospace. He adds: "We're excited about the teamwork that has developed between Erickson and M7 towards expansion of Erickson's Product Support capabilities and our own Repair Station services as well."

A substantial tooling fixture was designed and built by M7's Tooling Team to hold the large S-64 Aircrane center section structure during the repair and ensure that its critical locations and structure were returned to their original engineered and built position.

After nine months, the Center Fuselage Section was finished and is currently in transit to Italy where it will replace the Center Fuselage Section on one of the Aircranes in Erickson's Italian operating fleet.

Notes to Editors:

M7 Aerospace began operations in April 1, 2003 with approximately 170 employees, including 116 in San Antonio. The company now employs nearly 550 people worldwide and more than 300 in San Antonio. M7 Aerospace has six business units offering aviation services including: AeroStructures Manufacturing, Maintenance Repair & Overhaul, Aeronautical Engineering Services, Visual Intelligence, Government Logistics Support, and Aircraft Parts Sales & Product Support. M7 Aerospace maintains its headquarters on the international airport in San Antonio, Texas. The company occupies a 426,000 sq. ft. complex that includes offices, factory facilities, and aircraft hangars. To learn more about M7 Aerospace and M7 Visual Intelligence, please visit the company's web site at www.m7aerospace.com

In business since 1971, Erickson Air-Crane (www.ericksonaircrane.com) currently owns and operates a fleet of eighteen S-64 Aircrane helicopters worldwide. With a lift capacity of up to 25,000 pounds (11,340 kg), the Aircrane is unsurpassed in performance of Firefighting, Civil Protection, Hydro seeding, Timber Harvesting, and Power line Construction. As the manufacturer and largest operator of the S-64 Aircrane helicopter, Erickson Air-Crane is a Federal Aviation Administration (FAA) and Joint Aviation Authority (JAA) certified Repair and Overhaul Depot with a comprehensive manufacturing, maintenance, and repair capability. Our S-64 Aircranes are supported and maintained around the world from the administrative and manufacturing headquarters located in Central Point, Oregon, USA. European Air-Crane, an Erickson subsidiary and hub of support for the European operating theatre, is the only EASA certified and authorized S-64 Aircrane operator in Europe. With over 900 employees worldwide, Erickson Air-Crane has flown nearly 250,000 hours over 35 years. Currently, the Erickson family of companies operates six Aircranes in North America, two Aircranes in Southeast Asia, three Aircranes in Australia, and seven Aircranes in Europe. The company has harvested timber in 5 countries, battled fires in 11 countries, placed over 40,000 air units on skyscrapers across the United States, and built over 8,000 miles (13,040km) of power line in North America.

Erickson Air Crane Lifts Off With Critical Chain Project Management

Central Point , Oregon — Surging demand for heavy-lift and heavy fire suppression capable aircraft has created a necessity for change at Erickson Air-Crane, Inc. Erickson, who manufactures and operates the world's largest fleet of Transport Category S-64 Aircrane helicopters, has experienced an enormous response from its recent offer of helicopters for sale.

Erickson's helicopter sales history began with the purchase of a single S‑64 Aircrane by the Korea Forest Service in 2001. The recent announcement of a $95 million order from the State Forestry Corps of Italy for 4 helicopters, with an option for two additional aircraft, however, has signaled the huge potential for Aircrane sales in the fire suppression/disaster relief role throughout the world.

This surge in sales puts pressure on Erickson's primary overhaul/repair and manufacturing facilities in Central Point , OR to meet the demand challenge. These facilities must meet the critical timing requirements contained in the sales agreements while at the same time support the Erickson operating fleet of 18 S-64 aircraft.

What it boils down to, according to Rick Fraenkel , Director of Manufacturing and Maintenance, is the need for a disciplined project management solution. "Erickson Air-Crane needs to increase project throughput utilizing a robust solution to remove resource and task dependence contention within individual projects and across multiple projects," says Fraenkel.

In the face of this challenge, Erickson, the Type Certificate holder for the S-64 and sole manufacturer of the helicopter, has announced plans to employ a new system of project management, called Critical Chain Project Management (CCPM), in the Central Point facilities. Erickson expects enormous improvements from CCPM. According to Fraenkel, the adoption of CCPM principles means that, "Erickson Air-Crane will accelerate our strategic plan with fewer resources leaving more capital for accelerated growth."

Critical Chain Project Management is the brain child of Dr. Eli Goldratt, an Israeli physicist best known for his best-selling book, The Goal , and for his development of a management methodology called the Theory of Constraints.

"Critical Chain represents the first real breakthrough in project management since the development of Critical Path Management," says Chad Smith , Managing Partner of Constraints Management Group (CMG), an international consulting firm specializing in the Theory of Constraints and Critical Chain Project Management. Michael Pitcher , a Partner at CMG and its CCPM Practice Leader agrees. "Over and over again, CCPM, when installed properly, has proven itself in a wide array of industries. The results are, quite literally, unbelievable." CMG is currently helping Erickson with the installation of its CCPM system.

Erickson Air-Crane is Ranked 17th in the United States For Aviation Maintenance Training.

April 26,2001 - Central Point, OR — Erickson Air-Crane was recently honored with the prestigious Diamond Award for extraordinary participation in the nationally recognized Aviation Maintenance Technician Awards Program. The program is sponsored by the Federal Aviation Administration and administered through local Flight Standards District Offices throughout the United States. The AMT awards are meant as the highest level of recognition for all certified and non-certified mechanics and technicians that service aircraft and aircraft related components. The AMT Awards Program also honors aircraft operators and repair stations for significant commitment towards the continued training and evaluation of employee performance.

The Erickson Air-Crane Repair Station JYDR439F garnered the Diamond Award, the highest honor available, for over 65% employee participation in the AMT program. The criteria for receiving a diamond award for any repair station is 25% employee participation.

Among the Erickson employees receiving AMT awards, two were honored with Diamond awards signifying successful completion of 100 hours of training. Rob Kincaid, fuel cell specialist and Sheet metal mechanic brought over 120 hours to the program. Airframe and Power Plant certified, Rob is working towards receiving his Inspection and Authorization Certification. The other Diamond Award Winner, Rob Hebble, works in Erickson's hydraulic Shop and has been attending Rogue Community College in Southern Oregon full time with several of his classes translating directly into Aviation Maintenance. The required training for receipt of a Diamond Award is comprised of at least two hours of training in FAA regulations and policy, completion of a 10-day course in aviation maintenance, and completion of a college level 3-credit hour course in Mathematics, Science, or Management. Several other employees received the Ruby Award, which is the next highest Aviation Maintenance Technician award requiring at least 60 hours of training in similar areas.

Larry Bird, Flight Standards District Manager for the Northwest Mountain Region, gave the awards personally at a ceremony which took place at the Erickson Air-Crane facility.

"It is a great honor to give so many AMT awards in my district. It's inspiring to see such a commitment to safety by Erickson Air-Crane technicians", said Larry.

"As employees and also as dedicated aviation technicians, we are proud of our safety and maintenance training record." said Chris Erickson, Aircraft Maintenance Director for Erickson Air-Crane. "We also know that we must continue to be vigilant about maintaining the highest training standards, that's why the company will continue to facilitate even more training opportunities in the years to come. We have strong aspirations for remaining in our position as the leader in heavylift helicopters."