Friday, March 1, 2013
Let the Good Times Roll
2009, the year when the bottom dropped out of the civil rotorcraft industry, seems a distant memory, as 2013 becomes the year of sustained recovery.
|The final Sikorsky S-76C++ entered service with Milestone
Aviation Group in 2012, as the manufacturer phases in the S-76D.
The old rock classic “Let the Good Times Roll” could serve as the theme song for Heli-Expo 2013, as rotorcraft manufacturers plan to announce several orders for new helicopters, indicating further that the recovery is finally here—or right around the corner—for most sectors.
“We’re coming off a good 2012 and 2013 is looking even better,” said Carey Bond, president of Sikorsky Global Helicopters, in what could be the understatement of the year.
Nothing says recovery better than a healthy order book. And at the show, Sikorsky plans on announcing several orders worth millions of dollars. Milestone Aviation Group will order 24 heavy lift S-92s and 10 S-76Ds. The order dwarfs previous orders. In October 2012, Sikorsky delivered the first two of 16 S-92s to the Bond Aviation Group. The S-92 is estimated to cost around $24 million per copy, according to Forecast International, a market researcher and aerospace consultancy.
In addition, Sikorsky will announce a contract with Bristow for 10 S-76Ds and 16 options. Asesa (Aeroservicios Especializados, S.A. de C.V.), a Mexican helicopter service provider, will order six S-76Ds, and four S-76Ds will go to the Chinese Ministry of Transportation. A couple of EMS-configured S-76Ds will go to the Arkansas Children’s Hospital. Sikorsky says there will be other revenue-building news at the show.
Kurt Robinson, CEO of Robinson Helicopter, put the recovery, which started in 2012 and is continuing in earnest this year, succinctly: “We went from [selling] 356 helicopters in 2011 to 517 in 2012. Of those, 191 were R66s.” He expects 2013’s sales will be even better.
Robinson Helicopter will announce additional orders in Las Vegas, and will update attendees on the company’s efforts to gain R66 certification in Russia, Europe and Canada. The OEM is moving ahead with plans to certify the float ship and cargo hook for the R66. The CEO said the company also is working closely with avionics suppliers Garmin and Aspen to get their equipment certified for installation in Robinson rotorcraft.
The Torrance, Calif.-based maker of piston and turbine-powered helicopters is sold out on five-seat R66s until Sept. 1, 2013, based on the current production rate of five copies per week. Robinson produces six 3-seat R44s per week and one 2-seat R22 per week.
Seventy percent of Robinson’s sales remain outside the U.S., but the company has no plans on developing satellite plants anywhere, as some OEMs have done. “We like having the location in one spot so the quality doesn’t suffer,” said Kurt Robinson. The company expanded manufacturing space at its Torrance facility in 2001 and there is “plenty of room” to grow further, he added.
|AgustaWestland AW189 prototype over Texas.|
Eurocopter, which continues to lead the light and mid-size commercial rotorcraft market in sales, took in orders for 469 commercial and military helicopters in 2012, representing a value of 5.4 billion euros (approximately $7.2 billion USD). Sales were particularly good for the Ecureuil/Fennec/EC130 family with 249 orders and the EC135/145 families with 144 bookings. Orders for the Super Puma remained strong in 2012 due to significant bookings from the oil and gas sector. Milestone Aviation Group has signed a contract to lease 16 EC225s. Starlite Aviation placed the first contract for the new AS332C1e.
Developments in 2013 will include the certification and delivery of the EC175 medium twin, according to Eurocopter President & CEO Lutz Bertling (see more in Rotorcraft Report on page 16).
Sources indicated that the manufacturer plans to announce several orders at Heli-Expo and provide additional details on the twin engine EC175 certification as well as first delivery to launch customer, Bristow Helicopters. Bristow is expected to use the EC175s in the Gulf of Mexico upon delivery, one company source indicated.
A possible prologue to Eurocopter’s plans for 2013 and beyond might have come from Bertling’s comments to reporters during Eurocopter’s 2012 earnings and orders review in late January 2013.
“Eurocopter took steps during 2012 as we transitioned from being a helicopter manufacturer to becoming a true vertical-lift mission solutions provider, supported by the modernization of our product line while also providing a more comprehensive services offer and growing the global footprint,” he said.
The Pratt & Whitney Canada PT6C-67E powered EC175 is being assembled at Eurocopter’s Marignane plant near Marseille, France.
On Day 1 of Heli-Expo, Eurocopter will celebrate the already announced order for a single EC135T3/P3 to Aiut Alpin, an Italian voluntary association of individual mountain rescue teams.
Eurocopter Canada also will announce the purchase of an EC135 by Northern Alberta as well as an MOU for the first EC145T2 from Phoenix Heli-Flight, also from Alberta.
On display will be Eurocopter’s Helionix avionics suite, which includes LED displays, an innovative crew alerting concept with an on-demand vehicle monitoring system, a four-axis, dual duplex automatic flight control system, and enhanced situational awareness.
Aircraft on display at the Eurocopter booth (C2922) will include: the EC175, EC145T2, EC135T3P3, EC225 and the AS350B3e, the latest helicopter in the AStar series.
American Eurocopter, which has more than 50 percent of the U.S. market in Eurocopter sales, is planning an EC175 demonstration tour before and after Heli-Expo for potential customers in the Gulf of Mexico market including Bristow, Petroleum Helicopters Inc. (PHI) of Lafayette, La. and Lake Charles, La-based Era Helicopters. A follow-up dog and pony show will be held March 14-15 on the EC175 for the oil and gas industry at the Sugarland Regional Airport near Houston, Texas.
“Our real emphasis will be on the EC175,” said Bob Cox, senior manager communications and media relations. “This helicopter is our entry into the deep waters of the Gulf of Mexico.”
The EC175, because of its combination of size and range, is also seen as a strong candidate for sales to the search and rescue (SAR) and corporate transport market segments.
Forecast International projects that rotorcraft manufacturers will ship 17,286 light commercial helicopters worth $58.6 billion between 2012-2021. This total includes producing more than 5,803 piston-powered and 11,483 turbine-powered light rotorcraft. Manufacturers are expected to ship 6,501 single-engine turbine helicopters and 4,982 twins, according to Forecast. Value of the single engine turbine market is projected to be $13.6 billion, while twin-engine aircraft value is to reach $42.9 billion.
Forecast defines the light commercial market as rotorcraft that are 15,000 pounds and less in maximum gross weight.
“Seventy-six percent of the value of production in the [light] turbine segment will come from production of twin-engine rotorcraft,” said Douglas Royce, author of the market reports for civil light and medium/heavy rotorcraft.
Honeywell’s most recent turbine-Powered Civil Helicopter Purchase Outlook, which Forecast referred to in its analysis, said order rates “are healthy” and near-term purchase plans by operators point to continued growth in the market between 2012-2016. Yet, Forecast notes in its analysis that it will take a few years before confidence in the light commercial market returns completely.
Forecast said improvement in the American and European economies “is critical” to the health of the light commercial rotorcraft market.
The corporate/VIP segment is one area that continues to suffer, unlike oil and gas, law enforcement, EMS, surveillance and air tourism, according to a few airframe manufacturers.
Medium/heavy rotorcraft production is forecast to total 1,965 from 2013 through 2022. Value of this production is forecast to reach $30.4 billion. The medium and heavy commercial market remains a “niche market,” said Forecast, because of the relatively few models offered.
|Bell Helicopter introduced its 525 Relentless during
Heli-Expo 2012. What will the manufacturer announce
during this year’s show in Las Vegas?
“The size, weight and complexity of these aircraft limit the potential size of the market, particularly for Western-made aircraft like the Sikorsky S-92 and Eurocopter AS332/EC225,” Royce said.
The AgustaWestland AW189 and Bell 525 will fill the gap between the top end of the light segment and heavier models, said Royce, with more orders expected in the near future.
[Editor’s note: The range in years are slightly different for the light and medium/heavy category because of later forecast publication date for the medium/heavy category, which prompted Forecast to begin the heavy range category in 2013.]
Forecast’s analysis said the full recovery of light commercial helicopter market is hindered somewhat by “tight lending conditions and sizable inventories of used aircraft, along with concern over fears of widespread recession in Europe.”
Markets for medium to heavy rotorcraft are not forecast to grow beyond 200 aircraft per year until 2017. “However, these rotorcraft have very high price tags, and the value of production of these aircraft to manufacturers is correspondingly high,” the analysis said.
Makers of large, multi-purpose rotorcraft capable of reaching oil and gas platforms far offshore are attracting a lot of attention of finance houses.
“The oil and gas market has been the most important in the last few years,” said Roberto Garavaglia, senior vice president marketing for AgustaWestland. Part of the reason is that this segment was more resilient to the downturn than other sectors and the oil business improved faster than other business sectors.
There’s a “growing number of financial companies, which are interested in purchasing and then leasing helicopters,” Garavaglia said, describing this as a growing, but not a new trend. “Financial investors are attracted to the asset value of these larger rotorcraft,” he added.
The residual value of the larger multi-role capable rotorcraft, such as the 15-seat medium-size AW139, is greater than that of an Airbus A320 airliner, Garavaglia claimed. One key is flexibility. “A helicopter can always have another life if it is versatile enough,” he said.
Historically, there has been less interest by aircraft lessors in rotorcraft, said the AgustaWestland executive. Which made it challenging for some buyers to raise the necessary capital to acquire a twin-engine turbine powered helicopter particularly. However, well heeled oil and gas companies, and their primary rotorcraft transportation providers, don’t have a problem finding capital typically, countered industry experts and one leading rotorcraft manufacturer. Still, the fact that lenders are more interested in providing capital to buy helicopters bodes well for the industry.
|Eurocopter EC175 and EC225 flying in
formation over France in late 2011.
As for AgustaWestland, the company showed “double-digit profitability” in 2012, and the order book has “grown steadily,” said Garavaglia. He said sales of the AW family of civil helicopters, which includes the AW139/169/189, were “very good” last year, with the order backlog worth about “three years of revenue.”
He deferred giving specific earnings figures and aircraft orders until March 31st, when parent company Finmeccanica releases its 2012 earnings.
Garavaglia did provide a teaser on what will be discussed at Heli-Expo. He reaffirmed that the 16-seat AW189 will be certified in 2013. The AW189, the civil version of the also-being-developed AW149 military version, is targeted primarily at the offshore rescue and oil and gas markets.
AgustaWestland is also “on schedule” for the development of the 8 to 10-seat AW169, a 10,000-pound helicopter in the light-to-medium class segment. The fourth prototype flew in early February 2013 for the first time, and certification is planned for sometime in 2014, Garavaglia said. The aircraft is targeted for the EMS and law enforcement markets.
Bell Helicopter, a Textron company, could not be reached for a pre-Heli-Expo interview, but the Fort Worth, Texas-based maker of civil and military rotorcraft is likely to update attendees on the medium-lift Bell 525 Relentless, which was one of the headliners at Heli-Expo 2012. The company plans to address the weight concerns and marketability of the Bell 429. The Relentless will be built at Bell’s Amarillo facility.
In mid-August, FAA denied a request from Bell to permit an increase in the maximum gross weight of the 429. Bell said 14 countries granted the requested exemption, including Canada and China. Bell had petitioned FAA to allow the Bell 429 light twin to operate at 7,500 lbs., instead of the FAR 27 limit of 7,000 lbs.
Bell delivered 65 commercial helicopters during the fourth quarter 2012, compared to three fewer commercial units in the year earlier quarter. Revenues increased $139 million for the fourth quarter. Bell’s backlog for commercial and military helicopters was $7.5 billion at the end of the fourth quarter, up $1.2 billion from the third quarter 2012.
MD Helicopters, a maker of military and law enforcement helicopters did not return calls to discuss its plans for Heli Expo 2013, but the company’s CEO Lynn Tilton will likely discuss the current state of the Mesa, Arizona-based company at the show. Tilton told reporters at Heli-Expo 2012 that MD Helicopters had a good 2011, but specific sales and revenue figures were not provided. Much of the company’s business comes from the U.S. military and foreign governments.
It is unknown if MD Helicopters will announce orders at Heli-Expo for any of its models, which include the MD 500E, MD530F or MD520N.
MDHI will likely display its NOTAR anti-torque system and new composite rotor blade at its booth. The NOTAR technology employs a fan-driven system that transfers low-pressure air through the tail boom for anti-torque and directional control, according to company materials.
MDHI could also display the advanced composite main rotor blade that will be offered as an upgrade for the MD530F.
Marenco Swisshelicopter will be on hand at Heli-Expo to discuss the progress of its SKYe SH09. The carbon-filled, seven-passenger SH09 prototype is currently being assembled and is projected to have a 140-knot cruise speed with a 430 nautical mile range.
Marenco is not expected to announce orders for the SH09 at Heli-Expo, but will announce the appointment of one distributor and representative for the Asia-Pacific region, said Mathias Senes, commercial and strategy director.
The company also will reveal the latest modifications to the Sagem instrument panel in Las Vegas, which will include reducing the cockpit displays from 10 inches to 8 inches. Marenco is not expected to announce a hard date for certification of the Honeywell HTS-900-2 powered SH09, but the company is “fully engaged” with EASA in the type certification process.
To date, Marenco has penned orders for over 35 SH09s for deliveries from 2015 to 2017.
While the VIP/corporate rotorcraft market has yet to rebound, it is safe to say that the commercial rotorcraft business overall has recovered. The industry hasn’t bounced back to the peak 2008 levels, but suffice to say that the recovery is here. And that will be reflected by the announcements of several rotorcraft orders to come from Heli-Expo.
Related: Commercial Helicopter News