Wednesday, December 1, 2010
Year in Review
The year is closing. Overall, 2010 was not such a bad year—it could have been worse. The helicopter industry saw some milestones and continued to take orders throughout the year, though not at the pace some would like. The civil helicopter market remains depressed as a result of budget cuts and the recession. The military market remains solid but the future is unclear. What impact will the drawdown in Iraq and Afghanistan have on future helicopter orders?
Helicopter financing was a continued challenge this year. As we reported in our February issue (“Helicopter Financing Tight but Not Terminal”), there is a credit crunch with banks ratcheting up lending standards, higher interest rates and increased scrutiny of borrowers. There is nothing wrong with that but when honest, decent, proven businesses cannot get the loans they need to purchase helicopters, then it is a problem. This problem persists. But once the funds open up again, there should be a pent-up demand that needs to be filled. This probably won’t be a rush like the glory days, which were a bit unrealistic with speculators buying delivery positions. But, there are businesses that need additional assets and are ready to buy, who are simply waiting until the banks come to understand, once again, how financing a helicopter can and will make them money. Part of the problem lies with the mergers of numerous banks and the loss of helicopter-savvy loan officers. With education, due diligence and clean paperwork, hopefully, progress on financing will be made in the coming year.
A continued focus on safety pervaded the industry with numerous programs to reiterate the need for caution, judgment and training to help prevent accidents. NTSB Chairman Deborah Hersman spoke to Rotor & Wing early in the year (March 2010 issue) to discuss the NTSB’s advocacy of “raising the bar.” Hersman stressed that just meeting the minimums was not enough and that OEMs and operators should stretch to improve safety, including adding equipment, even if it is not regulated. She also stressed assuming personal responsibility, saying, “We’ve seen a lot of voluntary measures taking place absent FAA requirements.”
The FAA did finally propose stricter rules for helicopter operations in an October notice of proposed rulemaking, and is seeking comments to those proposed rules. The NPRM proposes changes for air ambulance operators, all commercial helicopter operators and all Part 135 aircraft (both helicopter and fixed-wing). Among the proposed rules for HEMS are the use of HTAWS, employing lightweight aircraft recording systems, mandating flights be conducted under Part 135 and amending the VFR weather minimums and IFR ops at airports/heliports without weather reporting. The complete list of proposed rules can be found at: www.faa.gov/regulations_policies/rulemaking/recently_published. The comment period is open through Jan. 10, 2011.
During Heli-Expo, OEMs touted their successes. AgustaWestland CEO Guiseppe Orsi unveiled the GrandNew, an updated version of the Grand with a new avionics package, etc. Bell CEO John Garrison acknowledged the company had a “challenging” year and also called the 429 an “amazing helicopter” and the first designed through the Maintenance Steering Group 3 process. Eurocopter President and CEO Lutz Bertling highlighted the Bluecopter program, which aims to lower noise and reduce CO2 and NOx emissions. Sikorsky President Jeffrey Pino said Sikorsky Innovations was working with the U.S. Defense Advanced Research Projects Agency (DARPA) to develop active rotor technology. MD Helicopters CEO Lynn Tilton introduced the company’s new president, Robert Molsbergen. Frank Robinson of Robinson Helicopters announced the pricing for the new R66 was set at $770,000 with a $75,000 deposit, but cautioned the price could go up soon.
Late in the summer, Robinson Helicopter announced that legend Frank Robinson would retire and son Kurt Robinson would assume leadership of the company. The younger Robinson assured devotees of the company that “the rest of the company’s management has been in place for two decades” and that there wouldn’t be much in the way of changes. “We’ve all been taught in the ways of Frank, and we understand this company and how it runs,” he said.
Also in the summer, Sikorsky’s X2 reached 225 KTAS on its way to 250 KTAS. Just a few weeks later, on September 15, the X2 unofficially set a new world speed record for a helicopter, achieving 250 KTAS during level flight at the Sikorsky Development Flight Center in West Palm Beach, Fla. An impressive milestone. Now we will see what product Sikorsky can delivery based on this technology (See Rotorcraft Report, page 12).
Kudos to Sikorsky for taking the reins and pushing forward instead of doing things the way they have always been done. Which brings us to the government procurement process. This is an issue that has been a challenge. Do we need newer, more efficient ways to get the military what they need as quickly as possible? Commercial-off-the-shelf (COTS) products such as the UH-72A Lakota are meeting the needs of the Army and saving the taxpayers money. Don’t get me wrong. There is a need for procurement security and fairness. But when it comes at the expense of the warfighters, the success of their missions and innovation, then we need to review “how we’ve always done things.” Here’s to 2011!