With financial uncertainty continuing worldwide, it still remains difficult to make market predictions about the near future. But based on various backgrounds and evaluating the current situation, it’s clear to see that Latin American countries were affected by the crisis in different degrees. In terms of sectors, the helicopter regional market is also being affected, but particularly in Brazil there may continue to be market consolidation and firm growth in both civilian and military markets.
The current scenario in Brazil creates plausible alternative views about how it will potentially develop for over the next 10 to 15 years. Today, forecasts cannot be based solely on trends, but the dynamics that are driving and speeding up the market expansion by looking at figures and segments.
On the country’s macro economic view, a few key elements are helping the largest Latin American economy and one of the BRIC’s emerging countries to endure the crisis and lead to a faster recovery: foreign reserves; stable inflation rates; and strong internal market sectors, supported by the government’s relatively fast and precise measures to drive the economy from 2009 GDP’s growth of three to four percent, to a steady growth rate of 7.5 percent in 2010.
On the energy front, with the government’s decision to keep the investments for development of the pre-salt offshore reserves (200/250 km from the coast), the state oil Co. Petrobras 2010-2014 business plan foresees investments around US$135 billion, where 53 percent is for E&P (extraction and production). In this context it expects to have a total of 26 rigs by 2014 and 53 by 2020.
So, conservative forecasts for this market remain about 10 to 15 new helicopters per year during the next decade. This market is currently still dominated by Sikorsky’s S-76 versions (some S-92s are already arriving), followed by Bell, Eurocopter and relative newcomer AgustaWestland’s AW139. Already configured for local offshore operations, the Russian Helicopters Mi-171 is prepared for an opportunity to enter in this attractive market. The current fleet operating for the oil and gas industry is about 120 units, most of them offshore. Additionally, in onshore “heavy-weight” operations, a Sikorsky S-64E and a Kamov Ka-32 were active in the Amazon region.
With the local market requiring a more specialized level of pilots, companies like Era in Rio de Janeiro are opening flight training schools, with the latest simulators and systems. MRO companies are also improving capabilities to support market expansion.
With a total civilian fleet reaching 1,450 units, the largest fleet in Latin America and among the world’s top five, Brazil’s market for executive/corporate aircraft is also increasing due to the local economic expansion, large distances and increasing traffic problems.
Regarding the public services sector, the national recognition of the helicopter as a key tool for SAR came after a local mini-Hurricane Katrina like disaster in the state of Santa Catarina, where the largest national aerial SAR took place in November 2008. Over two weeks, 24 helicopters (Helibras, Bell, Sikorsky Black Hawk, and others) and around 100 pilots performed more than 700 missions, flying more than 550 hours and rescuing about 1,900 victims.
The defense scenario is also expanding in numbers and suppliers. The local assembly and gradual production of Eurocopter’s multipurpose EC725 (50 units total)—part of the National Defense Strategy plan for the three Armies, released in December 2008—is giving local companies the opportunity to firmly enter in the manufacturing side of this market. The production line will be in an expanded area of Helibras current Esquilo assembly/production plant at Itajuba City in Minas Gerais state.
In a different approach, a commercial trade balance operation with any offset, the Brazilian Air Force (FAB) purchased 12 Russian Mi-35 attack helicopters for US$250 million. The contract has recently been suspended due to new budget restrictions, after the delivery of six units and some delays. Otherwise, civilian helicopter pre-sales negotiations are under development in many areas.
On the other hand, the largest association of helicopter pilots in Latin America, ABRAPHE (Brazilian Association of Helicopter Pilots), is fully engaged with flight safety procedures and pilot training. The association still has a room to grow and work to do with this market expansion regarding pilot formation, culture and safety procedures. In such a large and heterogeneous country, this is a hard task to do. Paradoxly, with such market predicates and perspectives, Brazil does not have a 100 percent helicopter annual event with different content that could be accommodated among an outdoor and indoor format every year.