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Wednesday, February 26, 2014

Steady as She Goes; Slow Rise Seen in Honeywell Forecast

The 16th annual outlook projects a demand for 4,800 to 5,500 helicopters from 2014-2018, in the ballpark range of 1,000 per year.

By Andrew Parker, Editor-in-Chief

Because of the timing of this year’s Heli-Expo occurring at the end of February, the deadlines for the March print edition fell into “no man’s land” – that is, going to press right before the show started, and then coming out right after the show ends. Most of the news heading into the show was under embargo as we went to press, so a number of the stories that come from the show have to wait – in print version only – until the April edition.

Go to rotorandwing.com and our other outlets such as facebook.com/rotorandwing and twitter.com/rotorandwing for all the updates during the show. If you don’t want to wait a couple weeks for our summaries in the April print issue of the best stories to come out of Anaheim from the world’s biggest helicopter show, online is your best bet. Keep an eye out for our special Post-Show Wrap digital edition as well, due out the second week of March.

One of the stories that fell into before-the-show status, that I received some insight about under (a now expired) embargo, is the 2014 Honeywell Turbine-Powered Civil Helicopter Purchase Outlook. Honeywell Aerospace gave Rotor & Wing a phone briefing on the forecast a week before the show with Charles Park, director of market analysis.

The forecast, now in its 16th year – its origins trace back to the late 90s, although it feels like it’s been around longer than that – estimates a demand for 4,800 to 5,500 civil-use helicopters for the five-year period from 2014 through 2018. Honeywell describes demand as remaining “steady” when compared to the 2013 forecast, with orders from large fleet operators making up for a “moderate softening” in overall buy plans from all respondents.

 

Infographic from the 2014 Outlook. Courtesy of Honeywell

 

“2013 was an encouraging up year in terms of deliveries,” Park said. On average, the forecast predicts around 975-1,100 deliveries each year during 2014, 2015, 2016, 2017 and 2108. Park explained that the estimates are presented as a range. “It’s a forecast. People don’t always act on their intentions,” he pointed out. “We also leveraged the forecast from the survey with some additional work that we do assessing the needs of the large fleet operators.”

The demand is coming mostly from light single-engine operators, with medium twin-engines accounting for 33 percent and light twins for 26 percent of the operators surveyed. Purchase plans for heavy multi-use helicopters slightly declined over the past year, but demand is expected to increase going forward, including from the oil and gas industry.

Park explained that a number of large fleet operators were not part of the survey. The numbers “are based on survey responses, so those figures [from large operators] are not a part of that calculation. So this is based on the pool of people that responded to the survey. That’s why [offshore] is a lower percentage – if you factored that in, you’d see some shifts” in the overall makeup and percentages in the forecast, he explained. When factoring large fleet operators over the next five years, “you get a pretty stable market,” Park added, “and particularly stable in comparison to what we were projecting last year.”

In terms of a regional breakdown, Latin America tops the percentage of new purchase rates globally, with 32 percent of respondents reporting plans to buy a new helicopter or a replacement in the next five years. Demand from the U.S. and Canada is at 26 percent, with Europe coming in at 23 percent – down from 28 percent the 2013 survey – and Asia-Oceania at 19 percent, while the Africa and Middle East region clock in at eight percent.

In terms of purchase plans, Latin America comes in at 32 percent, with Middle East and Africa at 25 percent and Asia-Pacific at 24 percent, with Europe and North America at 19 and 11 percent, respectively.

What does this all mean? It sounds like “steady as she goes” could be a key phrase for 2014. Of course, “steady” was one of the buzzwords coming out of the Honeywell and Rolls-Royce forecasts in 2007, before everything fell apart (globally) in 2008/09.

Here’s to hoping that the rest of 2014 and beyond sees continued growth, steady or not – and that Heli-Expo 2014 is the start of something big.

Look for the Post-Show Wrap and summaries in the April print edition. Until next month, see you on the web.

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