Business & GA, Military

2016 Rotorcraft Delivery Outlook Down Slightly, Sets Up Strong Aftermarket

By Woodrow Bellamy III | February 29, 2016
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[Avionics Today 02-29-2016] Civilian helicopter deliveries are expected to reach between 4,300 and 4,800 over the next five years, according to the 2016 global rotorcraft forecast Honeywell Aerospace released ahead of Helicopter Association International’s (HAI) Heli-Expo conference in Louisville, Ky. Operators surveyed were most interested in light, single-engine and twin-engine helicopters, which account for more than 70 percent of expected purchases reported in the 2016 outlook.

Airbus Helicopters 225M. Photo: Airbus Helicopters.


The five-year forecast for expected purchases declined by about 400 helicopters from the 2015 outlook. The drop reflects a range of global economic factors, including currency rates, the decline in growth for China’s domestic economy, and lower oil prices. With more than 22,000 active civilian helicopters worldwide, the lowered outlook for new purchase plans in the 2016 forecast sets up a healthy demand for aftermarket avionics and components upgrades. 
“There are over 22,000 active turbine powered rotorcraft around the world, and that is a great aftermarket opportunity. We can look at fielding value-added upgrades that help people with safety and situational awareness, or improving the overall performance of the aircraft. That could be anything from radars and [Traffic Alert and Collision Avoidance System] TCAS to [Health and Usage Monitoring System] HUMS, aircraft connectivity, communications and engines. The list is extremely broad,” Charles Park, director of market analysis at Honeywell Aerospace, told Avionics Magazine. 
Demand for aftermarket upgrades on in-service helicopters should be especially strong in the United States, which has the world’s largest civilian helicopter fleet. The FAA is requiring Emergency Medical Service (EMS) to equip their rotorcraft with Helicopter Terrain Awareness and Warning Systems (HTAWS) and flight data monitoring systems by April 2017. Part 135 helicopter operators are also required to equip with HTAWS and multifunction displays that feature radio altimeters as well as 406 MHz Emergency Locator Transmitters (ELTs) by the same date. 

Regional Demand

Latin American operators reported the strongest fleet replacement purchasing plans among the regions surveyed, with an increase in purchase plans of 8 percent compared to the 2015 survey. Park said the reported purchasing plans from Latin American operators are largely driven by Brazil, which has the second-largest active civilian helicopter fleet outside of the United States. 
“Latin America was up … from a 28 percent replacement and growth rate, to a 36 percent rate. What is driving that in large measure is Brazil, which is a surprising result to us because Brazil is currently involved in a recession. We feel like a lot of the helicopters that were going to be acquired to support the Olympic games are probably already bought, and so it’s somewhat intriguing that the new purchase plans from Brazilian operators are so strong this year,” said Park, noting that the purchasing plans reported out of Brazil should be received with an element of caution. 
Up to 30 percent of respondent fleets based in the Middle East and Africa region are slated for turnover, according to the survey. That is the second highest rate for new purchase plans among all regions surveyed, although Park said the results from some regions should be viewed cautiously as mega fleet operators, such as Saudi Aramco, are not directly surveyed because the timing required to go through every aircraft that they operate is not feasible.
Purchase rates reported by operators based in China declined slightly in 2016 compared to last year, reflecting the country’s volatile economic situation. 
“If you turn to Asia, you have the much talked about Chinese economic slowdown. Yes, it has slowed down from 8 to 6 percent growth, a change that anyone would love to have in a western economy. But for China this is an important reduction in growth as there is a lot of transition from an investment-driven economy — which would require a lot of helicopter activity — to a more consumption-driven economy. The implications are also aggregated to some extent by the usage regulation for private and commercial rotorcraft. We would expect to see continued demand for [Search and Rescue] SAR, medical and police helicopters out of China, but for corporate and general utilities it is a tougher operating environment,” said Park.
Europe accounted for 25 percent of overall projected deliveries and fleet-purchasing plans reported in the survey. Park said operators in Russia continue to refuse surveys on helicopter use, which has a large impact on the numbers coming out of the region. 
“An interesting mixed bag of results this year around the world, a number of factors, that are causing us to treat this with a little more caution and conservatism in our forecast outlook this year,” said Park.

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