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Sunday, February 1, 2009

Latin America Notebook

Claudio Agostini

Wings of Change

With the financial uncertainty, it’s difficult to make market predictions about the near future, but Latin American countries were affected by the crisis in different degrees. In Brazil, we may continue to see a market consolidation and good growth on both civilian and military markets.

Key elements are helping the largest Latin American economy and one of the BRIC’s emerging countries (Brazil, Russia, India and China) to endure the crisis and allowing what can be a faster recovery: foreign reserves; stable and under control inflation rates; and strong internal market sectors, supported by government’s relatively fast and precise measures to drive the economy to 2009 GDP’s growth from 3% to 4%, compared with 5.4% registered in 2008.

Some facts from 2008 may lead this year as a landmark date for the helicopter market in Brazil, from ABRAPHE (Assn. of Brazilian Helicopter Pilots) strengthening its relationship with international associations like IHST and HAI to the agreement between government and Eurocopter/Helibras for local production of the multipurpose EC-725.

The largest association of helicopter pilots in Latin America still has a room to grow and for flight safety works to do if we take their current number of members — around 400 compared with country’s last number of registered civilian helicopters 1,155 and still good forecasts for the next five years. The association also has safety deals, links and some members from civilian services and armed forces. ABRAPHE decided that from 2008 onwards their Flight Safety International Seminar will be held every year in order to attend market dynamics and safety requirements.

The government’s decision to keep the investments for development of the pre-salt offshore reserves, where larger and more equipped helicopters are a fundamental tool. Forecasts for this market remain about 10-15 new helicopters per year during the next 10 years.

This market currently is still dominated by Sikorsky’s S-76 versions (the first S-92 is about to arrive), followed by Bell, Eurocopter and the newcomer AgustaWestland. Already homogenized for local offshore operations, the Russian’s Baikal 171 is still looking for a chance to enter in this attractive market. The current fleet operating for the oil and gas industry is about 100 units, most of them on offshore operations. Additionally, on onshore "heavy-weight" operations for the first time, one Sikorsky S64E (US — Evergreen Helicopters) and a Kamov32A (Can — VIH — Vancouver Island Helicopter) were operating at the Amazon region, and might proceed in 2009.

The national recognition of the helicopter as a key tool for search and rescue came from a local mini Katrina-like disaster at the state of Santa Catarina where the largest national aerial SAR and first supplies operation took place in November 2008. During two weeks, 24 helicopters (Helibras, Bell, Sikorsky and others) and 100 pilots flew more than 700 missions, flew more than 550 hours and rescued nearly 1,900 victims.

The Eurocopter/Helibras agreement with national government for local production of the EC-725 as part of the new National Defense Strategy plan released in December 2008. The production line will be in an expanded area of Helibras’ current Esquilo assembly/production plant at Itajubá city in Minas Gerais state. Also under discussions are the possibilities of some avionics OEM and other equipment start operations in Brazil, in most of the cases in association with local companies.

Following the U.S. Navy doctrine for anti-submarine operations, the Brazilian Navy purchased four S-70 SeaHawk helicopters, with option for two more units and total forecast for 12 units.

In a different approach, a commercial trade balance operation with any offset, the Brazilian Air Force purchased 12 Russian Mi-35(M) attack helicopters, an updated-night operations version of the Mi-24/35, and probably similar to those recently purchased by Venezuela. Also under discussions are the "tropicalization"/local development of some avionics equipment.

This new National Defense Strategy plan foresees the increase of defense investments from actual 1.5% from country’s GDP up to 2.5% and gives emphasis at the reorganization of local defense industry to support armed forces needs and requirements, particularly to protect the Amazon region and south Atlantic offshore reserves.

Sao Jose dos Campos, 120 km from Helibras’ Itajubá plant and 40 km from Taubaté city where Army Aviation Command and main training and maintenance are located, also attracted in 2008 to it’s local airport and CTA (General Command of Aerospace Technology) premises, the 11-year-old indigenous Expo Aero Brasil, long time dedicated to general aviation and light sport aircraft airshows. Due to the city’s industrial/aeronautical environment, the event is changing its profile aimed to a more trade, products, services and technology event. As a result, the airshow will present a special sector for the helicopter industry this year.

The industry in Brazil has an unexplored huge market, and following BRIC’s definition, maybe we should start considering Brazil, Russia, Australia, India and China as emerging helicopter countries.

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