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Tuesday, March 10, 2015

Airbus Helicopters Endures Challenging Year of Change and Integration

By Andrew Drwiega

Guillaume Faury, president and CEO, Airbus Helicopters acknowledged that his company had been through a challenging year of change in 2014. During his first full year in charge, he had to contend with the fallout and reputation management from the North Sea accidents, as well as a corporate change and realignment with the Airbus brand away from the runaway brand that had been Eurocopter. The organization has had to pause after the last couple of decades of breathless advances, and even perhaps rein back ambitions while it reorganized and consolidated.

The continual decline in budgets among its key European military customers has led to a downward backlog adjustment of 33 NH-90s from the order book, and the plummeting oil price has put pressure on a sector from which the company has been actively shaping up to achieve sustained growth.

During the annual start-of-year briefing and review to European aviation media in Paris, the impression was that Airbus Helicopters, while enjoying and lauding three firsts last year, also needed to contend with major setbacks to its strategic plan. And the future is not as certain as Faury would like.

The strongest message from 2014 was that Airbus Helicopters had certified and introduced three aircraft: the EC175, the medium EC145 T2 and the EC135 T3/P3. However, Faury admitted to disappointment at the relatively low confirmed sales of the EC175 (only eight on top of the five in 2013), but underlined that ramping up sales was a main target for 2015. Its good initial availability rate of 85 percent from the first two helicopters operated by Noordzee Helikopters Vlaanderen (NHV) in the North Sea should help its cause.

“We need to win two or three of the big campaigns this year,” said Faury, adding that his company wanted to “book more than we deliver.” That didn’t happen in 2014. The figures showed that Airbus Helicopters delivered 471 rotorcraft in 2014 and booked a further 402 orders (with a total backlog of 900). Its major success was in the heavy helicopter sector where, for the first time, the company completed the unprecedented delivery of 101 of its heavy helicopters (48 of its EC225/725 and 53 NH-90s) – the first time that it had delivered more than 100 helicopters in this category over the course of one year. Deliveries were nearly equally divided between military (48 percent) and civil (52 percent). Faury said that he expected this ration to remain stable.

 
Left: Airbus Helicopters EC135 T3. Right: Airbus Helicopters EC175. Photos courtesy of Airbus Helicopters

Airbus Helicopters’ share of the worldwide market is estimated at 11 percent in terms of military helicopters (due to the dominance of U.S. OEMs in supplying the U.S. forces and Russian Helicopters supplying their own forces), while Airbus claims a leading position in the global civil market of 44 percent, with Bell Helicopter in second place with 21 percent.

Faury said that the effect of the Airbus integration had led to “us putting in place moving lines and deploying visual management everywhere. We are taking best practices from across the group to industrialize and solve problems. In 2014 we delivered 98 percent of the planned order of spares on time. Rush orders and aircraft on ground (AOG), we moved from 83 to 90 percent.”

In regards to technology, Helionix, the first digital aviation suite developed and integrated by a helicopter OEM, also had its debut on both the EC175 and EC145 T2.

Global Perspective

Guillaume Faury addresses the audience. Photo by Andrew Drwiega
“It has been a year of fast change, and the drop of the oil price has had an effect,” said Faury, noting that the company has 15 percent of its business anchored in the oil and gas sector. Out of 2,300 helicopters worldwide servicing the oil & gas industry, he stated that 25 percent were Airbus helicopters.

While some operators within the oil & gas industry were revising or had stopped new projects, Faury saw opportunities to assist with cost savings through the introduction of new types, particularly the EC175 and EC225e (a derivative of the EC225 for extended range missions). “We see this as an opportunity to replace old generation helicopters with new, although short term this is a negative trend.”

In terms of parapublic customers, he said that the recent events in Paris had shown that the need for increased security would continue to widen this market. Balancing this, however, he believed that the uncertainty of the economic situation would continue to put pressure on civil general aviation sales.

The Chinese market continued to offer huge potential even though the growth continued to be slower than expected. “We delivered 29 helicopters in China last year,” he said. Currently, Airbus Helicopters has 450 civil helicopters flying in China, against 10,000 in Europe and 12,000 in the U.S. “In 2014 we delivered the first EMS helicopter to China – an EC135,” stated Faury. To illustrate the potential of EMS growth, he recalled that there are two EMS helicopters per million in Europe and three EMS helicopters per million in the U.S.

But the Russian side of this business is currently at a standstill. “It is a rather small market and we see a drop in activity. The first EC175 has been delivered to UTAir while the others have been suspended waiting for further clarity on what will happen,” said Faury. Launch customer UTAir signed up for 15 EC175s to service the oil & gas sector.

Military Market

EC145 T2. Photo courtesy Airbus Helicopters
While there was a lower level of military orders in 2014, Faury expects to convert potential orders this year. The Polish military utility helicopter contract for 70 aircraft is, admitted Faury, his main military target for 2015. Earlier in the year the company opened a new design office in Poland. Faury said that he wanted to add Poland to his home nations list of France, Germany, Spain and Brazil. He said that the company would also be pressing the AS665 Tiger for the Polish Kruk (Raven) attack helicopter requirement, of which around 32 helicopters will be needed to replace the old Mi-24 Hinds.

“This will be a year of bookings and major campaigns,” he stated, referring also to Qatar’s intent to buy 22 NH-90s (12 TTH and 10 NFH variants) at a cost of around $2.8 billion (€2 billion), and 22 EC725 Caracal’s for the Kuwait armed forces. There are still more than 250 NH-90s to be delivered to existing customers. Returning to the Spanish order, he said that it had now been agreed to reduce the number of NH-90s from 45 to 22 but with support and service activities.

The first three Tiger AS665 HADs Block 2s were delivered to the French Army in 2014 and the first two HAD/E versions to the Spanish.

In Korea, Faury said that the success of the cooperation with Korean Aerospace Industries (KAI) over the development and fielding of the Surion helicopter for the armed forces would hopefully lead to his organization into a further partnership with KAI, the company selected by the Defense Acquisition Program Administration (DAPA) to develop by 2020 a Light Civil Helicopter (LCH) for maritime surveillance and transportation alongside a military version, the Light Armed Helicopter (LAH), which would enter service in 2022. The numbers have been set at 69 civil and 250 military helicopters with no restriction on global sales.

Exclusive Comments

Speaking directly with Rotor & Wing during the event, we asked Faury for his opinion on the U.S. Army’s progression towards its Future Vertical Lift (FVL) requirement, through the Joint Multi-Role (JMR) fly-off in 2017. He said that he believed that while the chances for a European OEM to be eventually selected for FVL were small, advances now being made in research and development as a result of what Airbus had learned through its own X3 technical demonstrator were being taken forward and would be applied across the Airbus Helicopter fleet where appropriate in future aircraft. He did not rule out the possibility of competing in FVL but added that while range was a requirement for all helicopters, the addition of speed was more appropriate (though not exclusive) to military customers rather than civil.

Rotor & Wing also spoke with Chief Technical Officer Jean-Brice Dumont about progress being made since the company had revealed its unmanned flight capabilities during a demonstration of an optionally piloted vehicle (OPV) EC145 at Istres Air Base on April 25, 2013. Dumont said that investment had continued, although there would be no further announcements in the short term. He added that while customers (likely to be military at first) were discussing what requirements they might have in this field, there were no firm plans to produce a dedicated aircraft. “There are still many regulatory issues to be overcome and we are working with EASA,” he said. “We are still expanding our understanding of what the capability can offer our customers.”

Dumont added that while Airbus’ other company involved in unmanned research and development, Cassadian, was not directly linked to the Airbus Helicopter OPV program, the two divisions had regular contact and shared expertise. Cassadian has developed the TANAN tactical UAS that can carry a payload of up to 50kg over an eight-hour mission. The relationship, said Dumont, is akin to a system specialist talking to a platform manufacturer – “we both bring our own specialties.”

Related: Airframe News

 

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