Thursday, November 5, 2015
Era Looks at Cutting Aircraft Orders
Era Group has more helicopters than it can use to support offshore oil and gas production and exploration and is looking to trim new aircraft orders as it pares its existing fleet. The Houston-based operator said its third-quarter net income plunged 79% to $900,000 this year from $4.3 million in the same period for 2014. Year over year, operating revenues for the quarter dropped 23% to $69.7 million from $90.5 million. Era President and CEO Chris Bradshaw said the third quarter “proved to be a very challenging one as conditions further deteriorated in our key geographical markets," noting the price of benchmark West Texas Intermediate crude oil dropped from about $60 a barrel at the end of June to less than $40 in mid-August. That prompted Era last month to a new round of cost-control measures. The company said it has excess capacity in medium helicopters and expects the excess in its heavy-helicopter fleet “to increase beginning in the fourth quarter.” While it is bidding for medium- and heavy-helicopter contracts, Era might sell aircraft if it loses those bids. The company also said it may terminate $127 million in commitments for new aircraft and other capital. Those capital commitments include agreements to purchase nine AgustaWestland AW189s, five AW169s and three Sikorsky Aircraft S-92s, Era said, adding that it has options for 10 more AW189s and three more S-92s. The AW189s and S-92s on firm order are scheduled for delivery this year through 2018.