On February 21, 1997, approximately 1000 Pacific standard time, a Hughes 269C, N5160N, being flown by a commercial pilot, sustained substantial damage during an in-flight collision with terrain while maneuvering near the Hood River airport, Hood River, Oregon. The commercial pilot and passenger were uninjured. Visual meteorological conditions with calm winds prevailed, and no flight plan had been filed. The flight, which was a demonstration flight for the passenger, was to have been operated under 14CFR91, and originated from the Hood River airport. The operator reported that the pilot was demonstrating a "crop dusting turn" to the passenger, a prospective student. During the maneuver the pilot reportedly "ran out of collective" and the right rear skid impacted the terrain deforming both the skids and the cross tubes and attaching fuselage structure. The pilot, a flight instructor, reported that he had executed a "cyclic climb, leveled out, began a descending turn to the right" and "ran out of collective" during which the helicopter "struck the ground on the right side." The pilot stopped in a hover, assessed the damage and then landed the helicopter at the Hood River airport. The pilot reported that there was no mechanical malfunction with the rotorcraft at the time.