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Sunday, January 1, 2012

2012 Annual Reports

What's New for 2012: Rotorcraft Outlook Panel

Welcome to the 2012 Annual Reports issue and the inaugural launch of the Rotorcraft Outlook Panel. This issue is very different than every other issue we produce during the year. This is the one issue each year where we open up our pages and provide a forum for the vendors who regularly provide you the products and services that are essential to your operations, and allow them to address you directly and let you know how their company is doing, and what new or interesting things you might expect from them in 2012.

I’m not going to lie to you—this sort of format is a bit disturbing to our editorial staff. As professional journalists, they are trained to take the information they receive from vendors, edit it for accuracy and clarity, and then provide you the filtered version with their own additional insight.

But then again, it is always equally disturbing to most editors when they discover that advertising in business publications such as our own ALWAYS ranks higher than editorial content whenever readers are asked to rate their most valued sources of new product and service information. So, if you get the opportunity and feel so inclined, please let these vendors know that you appreciate their efforts to provide you even more information about their plans for the year within these pages.

We also decided to do something a bit different this year. We decided that, as long as we already had their attention as part of the Annual Reports issue, we would try to dig a bit deeper into the minds and plans of the top executives across the helicopter industry. So instead of asking everyone to answer a single, very broad question about what they see on the horizon for the coming year, we instead approached this in much the same manner that we might approach any CEO interview during the year—with just a bit of a twist.

As we embark on another new year filled with promise and uncertainty, we decided to ask three questions:
• “What are the most interesting projects that your company is working on for next year?”
• “What are the new and emerging opportunities for rotorcraft operations in 2012?”
• “What issue or issues concern you most about the immediate and long-term future of the rotorcraft industry?

We sent three different questions to our participants and asked them each to answer at least two. But the “twist” is that we instructed our participants to keep their answers in total to under 500 words. We then handed those answers over to our editorial staff and asked them to review the answers, provide additional context or insight if necessary, and present them mixed together in an interview format, rather than in the format we have used in this issue in recent years, which we referred to as the Executive Outlook section. And thus, the 2012 Rotorcraft Outlook Panel is born.

By expanding the format to include additional questions and topics this year, I believe we are able to provide a great deal more insight into what we might all expect to see in the coming months. And of course the comparison and contrast of the answers provided by CEOs and managing directors of very large multi-national corporations, juxtaposed with the answers from the top management and owners of somewhat smaller companies, all taken within the context of the wide range of organizations represented, provides very interesting forecast fodder, when taken as a whole.

We will continue to tweak and evolve this format in coming years based on the feedback you provide us, and I’m very excited and pleased to provide this new forum, and to see where it goes from here!  — Randy Jones, Publisher, Rotor & Wing

 

Annual Reports

 

Rotorcraft Outlook Panel: 2012

Predicting the future is kind of like throwing a game of darts. Every once in a while you hit the bull’s eye (for the majority of the non-professionals among us), but most of the time it’s just blind luck whether you're accurate, get somewhere near the intended target, or miss altogether. Successful strikes go up dramatically with professionals, as with almost any field of work. With that in mind, think of the 14 executives that participated in our 2012 Rotorcraft Outlook Panel (starting on page 25) as the experts—with a significantly higher chance of predicting what the future of the industry holds.

“Right now the global economy as a whole is unstable and, like every other industry, lack of direction in the stabilization is our concern,” observes Jim Sensale, president of Aviation Instrument Services.

“Many segments of the rotorcraft industry will feel significant financial pressures in 2012, which will impact the purchase of new helicopters as well as fleet retrofits,” says David Ashton, vice president of Cobham Commercial Systems. “Global military spending is likely to remain flat or decline."

Mark Tattershall of Kaman Helicopters notes that beyond unmanned opportunities, “we see demand growing for small ship maritime helicopters that provide nations with a cost-effective capability. This is driven primarily by territorial disputes, anti-piracy operations, submarine concerns and drug and other smuggling operations.”

Presagis is seeing “a significant increase in demand from the defense side and from commercial applications related to offshore and remote area operations,” according to President Guillaume Hervé.

“On the defense side, the drive is for highly accurate and effective training and mission rehearsal solutions in single and multi-domain environments. On the commercial side, the demand is for easily deployable and accessible solutions that will help the industry reduce the current excessive levels of accidents and incidents,” he adds.

Curtis Reusser, president of Goodrich’s Electronic Systems segment, notes that “mission readiness, improving performance and reducing operational costs” are among the chief concerns for the company heading into 2012. “Current budgetary limitations have surfaced at a time when we see an unprecedented combination of an increasing need for helicopter operations and services, global cost-saving initiatives, and ongoing political instability.”

Precision Aviation Group “continues to believe that energy exploration and support will remain a growth area for helicopter operations,” notes President & CEO David Mast. “The Australasia market has continued to be an area of expansion for our companies in the rotary wing market. Our support of government programs presents an increasing opportunity for growth,” he adds.

George Ferito, director of Rotorcraft Business Development for FlightSafety International, points out that a “succession of industry and government-sponsored task forces have, in recent years, offered a number of proposals to improve helicopter operational safety. While these have been wide-ranging and, in some cases, far-reaching, they share a common denominator: they all recommend increased training as a fundamental and essential step.”

Aviall CEO Dan Komnenovich explains that the company is preparing for “emerging opportunities this year in the BRIC countries (Brazil, Russia, India, China), the Gulf of Mexico, and operations around the globe.” He adds that other issues facing rotorcraft operators include aging fleets and the growth of the practice of “just-in-time” inventory deployment.

“The economy and the existing instability in the U.S. and across Europe remains a major concern for all of us,” notes Markus Schmitz, CEO of Becker Avionics. “We believe that 2012 will stay flat for most of the year but hopefully we will see improved economic conditions thereafter that will allow for stronger demand of goods and services. In any case, it will be a slow recovery to pre-recession levels.”

Aero Dynamix General Manager Dennis Trout sees airworthiness certification, specifically FAA N8900.152, as a major issue heading into 2012. “Many of these provisions were in effect previously, but enforcement has been sporadic and uneven across the country. The robust inspection and enforcement of these new standards will severely challenge many of the NVIS product suppliers and integrators.”

Mike Scimone, president of Donaldson St. Louis, notes that “recent history has shown the rotorcraft industry has been secure. The unique ability of rotorcraft to meet many needs, especially with the military, has allowed us to weather some rough times. But the reality of reduced spending on both the commercial and military side will have its effects.”

Aspen Avionics President & CEO John Uczekaj points to standardizing the approvals process as an obstacle ahead. “The rotorcraft industry needs to address how to gain federal acceptance of standardized processes in certification and implementation of new technologies in a timely fashion,” he says. “Without it, game-changing ideas will not be available to this market.”

Cost containment “is a major challenge as we look to the future of the rotorcraft industry,” notes Dave Marone, a vice president with BLR Aerospace.

“Despite the efforts of industry groups and government regulators, significant improvement in safety seems elusive, and the result is an ever-increasing cost to insure rotorcraft assets and operations. … All factors combined, if left unchecked, will result in a greater number of helicopter missions that are no longer economically viable.” — Compiled by Rotor & Wing staff

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