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Tuesday, June 1, 2004

Latin America

Tempered Forecast

Expectations for new and used civil helicopter acquisitions are up in Latin America, but the region continues to have the lowest rates for fleet replacement and expansion in the world.

Those were among the findings in the latest survey of worldwide turbine-powered helicopter purchase plans by Honeywell. The engine maker asked 949 chief pilots and flight department managers of companies operating 3,047 helicopters around the world what aircraft they expect to buy, when they plan to do so and whether the acquisitions will increase their fleet size.

Generally, the outlook is good. Honeywell predicts worldwide sales through 2008 will be about 7 percent higher than they were for the five-year period that ended in 2003. In the next five years, the engine maker said, about 2,350 new turbine-powered civil helicopters should be delivered. (For the first time, this year's survey excludes expectations for military aircraft purchases.)

Purchase expectations in Latin America bounced back from the previous five-year forecast. The 2003 edition found "very low levels of demand for new helicopters," with many operators unable to afford new equipment. Expectations for purchasing used aircraft last year more than doubled from prior surveys, "indicating that underlying demand is still strong."

In that survey, Honeywell said that Latin American operators expressed deep concerns "over the changing political and economic environments they are facing." Those concerns linger. This year's survey found operators in the region most concerned about "poor economic conditions and taxes or threats of new aviation-targeted taxes."

"Latin American operators said that their flight department budgets are tight," the survey added, "which is affecting the use of their current aircraft and potential purchases."

Still, demand is growing. Honeywell expects Latin America to account for about 9 percent of new helicopter acquisitions over the next five years. The greatest source of demand remains the single-engine helicopter. Operators indicated that category will account for 82 percent of acquisitions, the engine maker said. Only 2.6 percent of acquisitions are expected to be light twins.

Overwhelmingly, the age of existing aircraft is driving replacement decisions, operators told Honeywell; 88.5 percent of them cited age as a determining factor. By contrast, only 10 percent said the availability of new or newer fresh-from-the-dealer birds was a factor.

Concerns about age won't abate any time soon if the projections for the rate of fleet replacements in Latin America are any indication. Honeywell foresees only 14 percent of the Latin American fleet being replaced with new aircraft in the next five years. That's the lowest rate for any region of the world. By comparison, 22 percent of the fleets in the Asia-Pacific region, Africa and the Middle East are expected to be replaced through 2008, with 18.7 percent replaced in Europe and 16.2 percent in North America in that time.

Three of every four helicopters acquired in Latin America in the next five years will be for corporate use, Honeywell said. Only two out of a 100 will go to utility work.

Honeywell noted that respondents to its survey reported using their turbine-powered helicopters between 400 and 600 hours in the preceding 12 months. Utilization was lowest in Latin America, although the vast majority of operators there expect flight hours to at least remain the same or increase in the next 12 months.

Mexican Operator Adds 10 412EPs

Aeroservicios Especializados S.A. de C.V. is using new Bell 412EPs (photo, above right) to support the offshore operations of PEMEX, Mexico's national oil company, under new, five-year contracts. ASESA already is operating the first of 10 new 412EPs recently ordered from Bell Helicopter Textron. It expects to take delivery of the last of those aircraft in August. The operator's CEO, Humberto Lobo De La Garza, said the aircraft order "turns ASESA in the largest offshore operator in Mexico."

The aircraft will fly over and around the Bay of Campeche in southeastern Mexico, which is the main base for PEMEX's oil exploration activities. ASESA will transport personnel and cargo from Ciudad del Carmen to offshore oil platforms.

Established in 1977, ASESA is part of PROTEXA, a large, well-established group of companies founded in 1945.

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