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Sunday, April 1, 2007

Editor’s Notebook: Cautionary Tales

James T. McKenna

THINGS ARE REALLY COOKING FOR a good portion of the world’s helicopter industry.

Of course, if you are among the fortunate, you may already know this. But then, maybe you’ve been too busy working to realize it.

Institutionally, Rotor & Wing has covered the world’s helicopter industry a long time. This is our 40th year. I’m a comparative babe at it, with just four years on the job. (But you know, with the rising number of gray hairs and birthdays, I’ll take "babe.") We knew things have been very good; we’ve said it enough in these pages during the past year to establish that. And that’s not just the editorial we, as in the editors, but our publisher, Randy Jones, a veteran of the industry with his finger on the pulse of things. Not until we got to the Helicopter Assn. International’s annual Heli-Expo gathering in Orlando this year, however, did we appreciate just how good things are for some.

So, demand for helicopters and the services that support them is really high and looks to stay that way for awhile.

I, Managing Editor Marcia Hillary Kay, and Contributing Editor Ernie Stephens spent the show dashing from press conferences in meeting rooms outside the exhibit hall to sitdowns at booths in it and back. Randy spent the 3.5 days of the show meeting with marketing executives and program managers throughout the industry. He was gauging how R&W’s strength as both a print and electronic advertising medium might better help them reach their desired markets and hit key business goals.

At the show’s end, as our staff broke down our booth, he dropped into a chair, amazed that "this industry is doing a lot better than I thought."

(Note above that I said "print and electronic." In addition to our Web site, rotorandwing.com, we published daily electronic newsletters on each of the five working days leading up to the show. You can view them on our Web site. But if you didn’t get them in advance of the show, let me know and we’ll add your e-mail address to our list. We plan to publish e-letters in advance of the Army Aviation Assn. of America annual gathering in May, the Paris Air Show in June, the Airborne Law Enforcement Assn. convention in July, and the Air Medical Transport Conference in September. They’re an excellent way to hone in on the latest news in those market segments and the hottest happenings at the shows.)

Not until the last day of the show did I have a chance to take in the exhibits; I got to nearly all of them.

I’ve said before that essentially I’m a reporter. I observe things. I ask questions about them. I note and collect the answers. So I wouldn’t presume to think I should be surprised about the intensity of the business today. But I know Randy was in good company. No less an industry icon than Frank Robinson admitted he, too, has been surprised by the pace of the business.

"I expected at least a leveling off, and probably a slowdown, as we moved into 2007," he told us for our pre-Heli-Expo e-letter. His company had already started reducing payroll through attrition. Now, "I’m kind of reversing all of my projections and planning... As far as we can tell, 2007 is going to be a very similar year to 2006. And we’re increasing our manpower."

I can tell you that nearly everyone with whom I spoke at Heli-Expo, like Randy and Frank, expressed surprise. One high-ranking fellow with Sikorsky said he goes to shows to pack in meetings with key players, and he couldn’t fit everyone in this year. A Eurocopter wag said a customer or two walked into their exhibit, opened a checkbook, and said, "I want that aircraft."

So demand for helicopters and the services that support them is really high and looks to stay that way for awhile. That good news brings with it some cautionary tales.

Some examples? Bell Helicopter canceled its 417 program (launched at Heli-Expo a year earlier), stretched the vaunted, Modular Affordable Product Line (MAPL)-based 429 program, and said it would subject all efforts to rigorous engineering and marketing critiques. New Eurocopter chief Lutz Bertling made his Heli-Expo debut by counseling that "feeling comfortable is the first step to losing." Schweizer reported it has "never really been in a stronger position than we are today in the helicopter business." It delivered 61 helicopters last year. But its goal was 78.

Another such tale begins on page 30. The demand for new aircraft is so high and the market for used ones so tight that military surplus helicopters are making their way from abroad to civil aircraft registries in North America and Western Europe. Some don’t belong there. Unsuspecting buyers are getting burned as a result.

Let us all please keep in mind, too, that while business may be great, many a helicopter aviator and his or her crews are putting themselves in harm’s way, and many more troops are doing so on the ground. We are locked in a world war against terrorism as well as ongoing combat in Iraq. None of us in good conscience should glow at our current successes without remembering those fighting to preserve our ability to pursue that liberty, as well as what’s really at stake.

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