Tuesday, October 1, 2013
Brazil’s Emerging Developed Market
Despite the global economy’s ups and downs, lowered economic growth projections by the World Bank – part of this seeming to be slowly getting back to their tracks – plus internal domestic challenges, no response for the helicopter industry seems to be as dynamic as Brazil’s.
The diversity in applications, possibilities and current fleet distribution poses challenges and opportunities for helicopter makers, distributors and support services in a single hugely segmented geographic region. This situation may not be quite different than what possibly occurred in the U.S. market about 40 years ago.
Beyond private VIP applications, particularly sensitive to finance market instabilities, manufacturers have also experienced a growing demand for oil and gas operations, law enforcement support, emergency medical services, newsgathering and a variety of other potential applications, such as the agriculture market, firefighting, lines maintenance – not to mention defense.
Among the top five civilian helicopter fleets in the world, the country has closed 2012 with roughly 2,000 registered units, 1,893 being general aviation (GA) units. Currently at mid-2013, the GA number is around 2,020 units, and remains with favorable projections to keep growing over the world’s average. The 1,893 registered units represents 14 percent of the entire country’s GA fleet.
From this total, São Paulo state alone concentrates 690 units with more than 400 units in greater São Paulo city. Such developed market requires a considerable infrastructure providing services as maintenance, parking, as five large helicenters, more than 200 helipoints and a dedicated control tower from Congonhas Airport managing a number of air routes in a controlled area throughout the city.
Emerging markets showed growing taxes in 2012 equal or bigger than developed markets: Centralwest (+14 percent), North (+16 percent), North East (+17 percent) against developed Southeast (+14 percent) and South (+16 percent) markets.
Some manufacturers are focusing on Brazil for its large and more immediate potential. Helibras, the subsidiary of Eurocopter in Brazil, was the first to establish a new local plant for heavy helicopters, (EC-725/EC-225) besides its light Squirrel assembly line in Itajubá city at Minas Gerais state. But the facility probably will not be alone within the next five years. Other companies like AgustaWestland (with a defined project), Sikorsky and Russian Helicopters are also planning to locally establish their companies. A panoramic view of part of this market scenario could be seen at the annual Latin America Business Aviation Conference & Exhibition (LABACE), held from August 14-16 at Congonhas Airport in São Paulo, reflecting the industry and services business agendas for the market.
Considered one of the largest executive aviation trade shows in the world, LABACE, organized by ABAG – the Brazilian Association of General Aviation – is now in its 10th edition, with a consolidated presence of the helicopter industry. It is also becoming the most significant helicopter exhibition in Latin America. This year the event totaled 14,000 attendees and 180 exhibitors, a number of them related to the helicopter market, along with 68 aircraft, 13 of them being helicopters.
The usual low profile of the helicopter industry in mixed aviation events, contrasted with their congested and flamboyant static exhibition, for the second year, right at LABACE entrance. Part due to the lack of space caused by larger booths in a restricted area at Congonhas Airport and part due to the fact that helicopter sales in Latin America – as recently mentioned by Helicopter Association International (HAI) president Matt Zuccaro – now represent about 7 percent of the world market share, and sales in Brazil alone represent half of that share.
An international events organizer with offices in Brazil is including in its helicopter services and equipment in its oil and gas portfolio, logistics section. They are scheduled to have a dedicated area for two exhibitions: Santos Offshore Oil & Gas Expo 2014, to be held in Santos City, aimed mainly to cover Santos Basin operations, followed by Brazil Offshore 2015, to be held in Macaé City, Rio de Janeiro, aimed mainly to cover Campos and Espirito Santo basin operations.
These actions may also be considered as a strong signal that before too long, the country may have again a successful 100 percent helicopter event covering all helicopter segments, services and equipment.
So, it seems that is not hard to guess where global helicopter makers and show organizers will find a continuous market growth in Latin America for their business in the coming decades.