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Signs of Recovery: Editor’s Notebook

By By Andrew Parker [aparker@accessintel.com] | April 1, 2011



After talking with numerous OEMs, operators, pilots and other helicopter support companies during Heli-Expo, the consensus seemed near-unanimous—the helicopter industry is getting past the bottom of the economic trough and looking up, with sales and other market indicators expected to return to positive growth during the second half of 2011.

While it’s expected that the major OEMs will always shed a positive light on bookings, helicopter makers generally kept busy during the show.

Eurocopter reported sales of 68 helicopters, with Bell Helicopter tallying orders for 41 rotorcraft. Both manufacturers introduced new variants during the show—the Bell 407AH and 407GX, and the Eurocopter EC145T2—while AgustaWestland and Sikorsky displayed new flagship products at Heli-Expo for the first time.

While the AW169 was the headliner for AgustaWestland coming into the show, attention quickly turned to the BA609, as the company is seeking to purchase sole ownership of the tiltrotor from Bell. Right after returning from Orlando, Sikorsky’s X2 demonstrator was named the 2010 Collier Trophy winner.

Back to economics. Mathias Seles, commercial director for the new Marenco Swisshelicopter SKYe SH09, gave some interesting perspective from a relative newcomer to the market. He pointed out that most of the contracts at the show were signed weeks in advance, “so it’s a little bit virtual.” However, the helicopter industry is going to benefit from the development of new concepts that are cheaper to build, he added.

“In comparison to the fixed-wing industry, which has benefited from all the funding from you and I flying back and forth in the world, in the helicopter industry, the fact that we don’t fly a helicopter every day is now gaining a certain maturity,” Seles said.

“We’re talking about an industry which is now reaching around 65 years old and it’s basically what fixed-wing aviation has been living in since the 80s, until maybe after the Gulf War,” he added. “You see the developments in the industry and how the fixed-wing market booms with low cost, new concepts—not just for the making of the aircraft or the safety, but also new concepts for use, for costs, and I think this is what’s going to help our industry.”

MD Helicopters CEO Lynn Tilton also had a positive outlook for the days ahead. “After five years of trying to rebuild this company one aircraft at a time, one process at a time, we’ve been faced with major long-term contracts that we’re all very excited about,” she said, noting a “divine moment” in the company’s history. “For the first time, we are facing major contracts that can fill our backlog, or a lot of it, for the next four years.”

Robinson Helicopter CEO Kurt Robinson reported sales coming back during 2010, with continued increases this year—a sharp contrast to the same period a year before.

“When things are down the most, that’s when they start to pick up,” he observed. “So we’re starting to see a pickup in orders worldwide. It’s looking really good.”

Another CEO from a helicopter maker concurred with the idea that the market is at or past the bottom of the 2008/2009/early 2010 trough, ready to take major steps toward recovery in the second half of 2011.

“An early indicator of sales is customer activity. And when I compare the level of sales we have today versus the level of activity a year ago, it’s a night-and-day difference,” he said, adding that market-wide optimism is beyond an opinion.

“The fact is, we do have substantially greater levels of activity, and so with the assumption of sales, we’re at the beginning of an upturn here.”

Others joined the choir, as several operators mirrored comments from the OEMs. One example is UTair Chairman & CEO Andrey Martirosov, who noted that the Russian-based company plans to double current operations within the next five years. UTair placed an order for 15 EC175s during the show.

Figures from a pair of engine makers appeared to add more evidence—both Honeywell and Rolls-Royce forecasted an uptick in helicopter engine sales. Honeywell’s outlook for turbine-powered helicopters foresees a five percent increase of deliveries from 2011-2015, when compared to the previous half-decade. The engine maker surveyed upwards of 1,000 chief pilots and flight department managers operating more than 2,150 helicopters. Rolls-Royce is projecting demand for 10,900 civil and 6,070 military turbine helicopters over the next 10 years, at a value of over $140 billion, including more than $12 billion in turbine engines.

All of these “good vibes” coming out of Heli-Expo 2011 add up to an optimistic outlook for the helicopter industry as a whole. The annual event continues to serve as an important snapshot for wider industry trends. While there were certainly some operators and market sectors who feel that the downturn will continue and that the helicopter market will never get back to pre-2008 levels, let’s hope that the overall positive mood can catch fire throughout the industry and serve as a sign of things to come. After all, perception is sometimes reality.

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