The price is right for taking flight

Navigating geopolitical impacts
Outside of standard costs that are expected and intrinsic to most flights, there are external variables that will also have an impact on the price, such as geopolitical events and public health crises. Chris Carnicelli, CEO of Generali Global Assistance, said that in addition to inflating costs, geopolitical events can render assistance impossible. “You’re going to be dealing with higher prices in affected areas, if service is even available. For instance, because of the war, our ability to provide assistance in Ukraine is severely limited.”

ITIJ also spoke with Gary Ormesher, Head of Network and Development at Specialist Rescue Group, who highlighted that such events can also lead to expensive detours. “Planning and logistics teams have to focus on ‘safe passages’ when flying due to geopolitical tensions leading to airspace restrictions and closures, limiting the routes available for air medical flights. This itself can lead to longer flight distances, or detours,” he asserted.

Piddington agreed that this is the case and also underlined a correlating increase in insurance. “Generally, a geopolitical event will lead to both complexities and cost increases for air ambulance missions, not least in relation to fuel. An air ambulance may, for instance, need to take a less direct route to avoid certain air zones. It may not be able to land to refuel within a normal or more cost-effective refuelling stop, or to get permits as easily as it could do previously. In addition, the cost of insurance can rise if an air ambulance is flying to or near high-risk areas,” she said.

Ormesher also mentioned the relationship between political events and insurance: “It’s not just headline-making events that can affect the costs of medical flights; political relations with provider country and incident country can have a direct correlation with the insurances the provider needs to operate safely and with the appropriate coverage,” he said. “For example, when carrying out a medevac from a country of high risk, often the bespoke insurance required adds to the cost of the mission, followed by any security screening processes, clearances, and physical security mitigation measures needed when in-country.”

Ozan Alemdaroğlu, Deputy General Manager at Redstar Aviation, confirmed this: “Besides the regular crew costs, maintenance, and insurance costs of the fleet in general, in case of performing missions to conflict zones, additional insurance coverage is required.”

Increasing cost/decreasing availability
Covid-19 has led to increases in air ambulance costs, as well as having ramifications for availability, Piddington confirmed: “Since the pandemic, air ambulance costs in general have risen, with both wage and fuel inflation. There is also a reduced availability of pilots, medics and operational staff, leading to (for example) less opportunity for utilising heavy crews,” she said. “As a result, air ambulance providers have needed to utilise their larger aircraft more often and/or arrange more wing-to-wing ‘wing tip’ transfers to optimise their operation, utilise their aircraft and crews more efficiently and complete missions more quickly.”

Brandon Bates, Senior Director for Global Strategy and Partner Relations at AirMed International (AMI), explained the reasons behind some unavoidable price hikes: “Like most industries, ours has seen price increases in many different areas of operation. Wages have increased by five to 15 per cent due to the worldwide workforce shortage. Along with wage increases, the air ambulance industry has seen an uptick in pricing in crucial areas, such as clinical care – which has increased by nearly 10 per cent – maintenance costs and ground transportation costs, which continue to increase drastically in a post-pandemic market,” he said. “We have also experienced a swift and large fluctuation in fuel prices. Although they have levelled off in the last six months, the price of fuel remains higher than what we have experienced in recent years. These factors, as well as the ongoing supply chain crisis, play a key role in the pricing and availability of air ambulance transportation.”

The complexities of calculating costs
There is no doubt that, when it comes to calculating the costs of air medical flights, there are myriad factors at play, and billing is a complicated procedure that requires extensive expertise. “Calculating and managing the cost of an air ambulance mission can be a complex process that calls for meticulous and highly skilled oversight,” said Piddington. “For instance, a sea-level cabin may necessitate a suboptimal flight path with an increase in air resistance, a longer flight and higher fuel burn. Overnight and aircraft parking costs vary from airport to airport and may need to be considered, as will the cost of a heavy or pre-positioned crew. Or the cost of extending landing hours at one airport against landing at another more expensive airport that is open 24 hours may need to be weighed up.”

Alemdaroğlu said that an open and honest approach is key and patient care is consistently front and centre: “We have a very transparent and skilful billing procedure. We always offer the best care to our patients, keeping our commitment to high quality standards – all whilst taking into consideration cost-effective solutions on the financial side.”

Alemdaroğlu provided an insight into how a quote is compiled: “The quotation offered to our clients consists of overflight permit costs, landing fees, ground handling fees in the pickup and arrival airports, and fuel expenses, which mainly depend on the range of the flight destination.”

He highlighted that Redstar is well equipped to support patients, with additional requirements potentially incurring extra cost, as is to be expected: “Besides our aircraft being equipped with state-of-the-art medical equipment and a highly experienced in-house medical team, if the patient’s medical condition requires additional specific support and equipment, such as in extracorporeal membrane oxygenation (ECMO) cases, we are skilled at supporting our patients with the cooperation of our suppliers. This might sometimes require an additional fee.”

As well as keeping the industry competitive, driving insurers to use the best value for service providers, an agreed pricing matrix allows insurers to query with conviction if the actual cost of service falls outside of the matrix’s prediction

Alemdaroğlu also pointed out that weather conditions can impact operations and, as a result, cost. “De-icing proceedings can be required for a safe flight operation under bad weather conditions, which would be added to the primarily offered budget, depending on the season,” he said. “If an overnight or pre-positioning of the aircraft is required to conduct the mission, crew accommodation and commercial airline tickets for the deployment of fresh crew would be necessary.”

The value of strong partnerships
The principal component of cost containment is a strong, open and honest partnership between the assistance company and the air ambulance company. “By working with a reputable assistance company, insurers can help to contain air ambulance costs at the earliest opportunity,” said Piddington. “An effective assistance partner will be able to draw on a global network of air ambulance providers and to communicate with local authorities and information sources to stay abreast of changing situations in real time. From anticipating visa difficulties to overcoming landing hurdles, they should be able to pre-empt complexities that may lead to increased costs and to mitigate these wherever possible.”

Ormesher agreed: “By partnering with providers who are committed to transparency, insurers can rely on open and honest channels of communication, as the foundation of a good business relationship relies on trust.”

He said that insurers can ask for an up-to-date pricing matrix from their air ambulance partners showing price ranges to and from specific countries or general regions. “As well as keeping the industry competitive, driving insurers to use the best value for service providers, an agreed pricing matrix allows insurers to query with conviction if the actual cost of service falls outside of the matrix’s prediction,” he told ITIJ.

For Tarling, in addition to working with trusted suppliers, sourcing multiple quotes is crucial: “We only work with suppliers whom we have long working relationships with and for whom we have developed a healthy level of trust. As a procedure, we must always have three quotations before proceeding so we have the chance to have, to a reasonable extent, certainty that we are getting a good price.”

Carnicelli also said that this is an important part of the process. “When we need to order an air ambulance, our network bids on the transport and we take each bid into account before determining the best path forward,” he explained. “In addition to being cost-conscious, it’s also important that we work with reputable providers that meet our service standards. Before a provider is included in our network and in our bidding process, we ensure that the company is strictly an air ambulance company, that they use appropriate aircraft, and that they have the right licences, insurance, and accreditations.”

High quality a high priority
Alemdaroğlu agreed that recognised and respected accreditation is absolutely fundamental and should be the main factor influencing an assistance company’s decision: “Patients’ wellbeing and operations’ safety are the top priority in air ambulance missions,” he said. “Sustainability of high quality standards and accreditation by international organisations such as the prestigious European Aero-Medical Institute (EURAMI) should be the main criteria in the selection of air ambulance companies by the assistance companies, as this provides a globally recognised benchmark when it comes to choosing the provider network.”

The use of accredited providers can be combined with other opportunities to reap cost savings, said Alemdaroğlu: “Empty legs of the aircraft positioned in different regions, which we are mainly able to offer by virtue of our fleet operating globally, are often also considered cost-effective solutions by the assistance companies, and booked frequently, if logistically possible,” he said.

“Multi-patient transport is also an excellent way to save costs; however, this largely depends on the medical clearance from the medical team as only selected diagnoses can be combined on a flight. If possible, though, co-transportation of patients offers a highly sustainable and cost-saving alternative for the assistance companies.”

Ultimately, assistance companies and air ambulance companies are on a shared journey of ensuring patient safety, and transparency and communication between these stakeholders can expedite the goal of efficient and effective patient care, while educating external stakeholders can ensure fair and competitive prices.

“AirMed International is dedicated to providing the highest level of care and bedside-to-bedside medical transportation to our partners and patients,” concluded Bates. “AMI remains a major advocate to travellers about insuring their journeys and works to educate consumers on the costs associated with an air medical transport.”