Air Methods’ Chapter 11 deal appears to doom Spright drone unit

It would appear that medical drone delivery company Spright has become a victim of owner Air Methods’ recent financial crisis, which evidently resulted in the Denver-based aviation services firm closing its fledging UAV unit under terms of its Chapter 11 rebound agreement.

Air Methods filed for bankruptcy in October with creditors demanding some $1.3 billion in payments – only about 15% of which the airplane and helicopter medical transport firm could cover. Under terms of its Chapter 11 accord, the company agreed to cut its debt from $2.24 billion to $553 million, and reduce operational outlays. Some of those savings are apparently coming from the jettisoning of investments and activities in Spright’s planned healthcare drone delivery services in the US and abroad.

In announcing its successful completion of the Chapter 11 process Thursday, Air Methods made no mention of Spright or its drone business. Over the past two years, the unit had been among the company’s most highly-touted activities. Yesterday, by contrast, the firm said it would continue providing specialized transport services with its “fleet of 365 medical helicopters and fixed-wing aircraft, operating from 275 bases and serving 47 states.” 

The omission of Spright in thecommuniqué would suggest the formerly high profile drone medical transport unit has paid the price of the wider firm’s bankruptcy survival. At least one observer has gone so far to state its disappearance as fact.

Drone sector site sUAS News published Air Methods’ press release with the headline “Air Methods completes financial restructuring (Shutters SpriteUAS).” The publication then added a note at the end of its post saying the drone unit’s employees “are looking for jobs on LinkedIn saying that the company was shuttered yesterday.”

If confirmed, the closing of Spright would represent a significant casualty in the sector – especially in the swiftly-growing category of specialized drone transport of medicines, patient lab specimens, and supplies. Up until now, Spright figured to play a large role in that later activity – and perhaps others.

Last May Spright announced its partnership with surging Swiss startup RegiTech, aiming to build a global network of drone medical service providers. Earlier this year, as part of a diversification effort, Air Methods celebrated Spright obtaining what was hailed as a “first of its kind” beyond visual line of sight waiver for infrastructure inspections from the Federal Aviation Administration. 

But those ambitions now appear to have been permanently grounded as part of Air Methods’ Chapter 11 agreement with creditors and banks, which take over ownership of the remaining business.

Founded in 1980 to provide air transport for patients and urgent supplies, Air Methods’ troubles began after its 2018 acquisition by private equity firm American Securities. Its finances were first sapped by having to increase salaries to attract and keep skilled employees. Meanwhile, under enactment of last year’s “No Surprises Act” preventing patients from being hit with unexpected bills for out-of-network medical care, the company encountered serious difficulties collecting payment for services rendered. 

Doubtless, efforts to build and expand Spright’s medical drone fleet, prepare its launch, and diversify its work in other UAV service areas required spending that served to make Air Methods’ heavy debt ultimately untenable – and, in the end, its UAV plans impossible.