By James T. McKenna | March 7, 2017
Chris Emerson was named in June 2015 president and chief executive of Airbus Helicopters Inc. and head of Airbus Helicopters North America region, which includes oversight of both the U.S. subsidiary and Airbus Helicopters Canada. He succeeded Marc Paganini as head of Airbus Helicopters Inc., the Grand Prairie, Texas-based subsidiary of Airbus Group. Before Heli-Expo, R&WI discussed with Emerson the state of the North American market and his company's successes and challenges in 2016.
You may remember that last year I outlined that I really want to use 2016 as the time to improve. This was the time to make ourselves better. We spent a lot of effort trying to understand the customer, put ourselves in their shoes. Out of that, we derived a roadmap of what we need to do to position ourselves better within the marketplace and improving the perception of Airbus Helicopters.
There were things like spares availability. What do we need to do? We were traditionally delivering spares to the customers on time 83% of the time. In June 2016, we hit 96% and then we pretty much went from 96 to 99%. We ended the year about 96% average for the year getting spare parts to the customer on time. That was a record for us. We've never done that before. That really entailed a lot of effort looking into our spares, making sure we have the right investments. That resonated with the customers.
We improved our technical support. We applied and received the European Aviation Safety Agency Design Org. Approval delegation on the type certificate (TC) of our French and German products. Before last year, we didn't have it. We have our own FAA Org. Designation Authorization, so we can do supplemental type certificates. We can do repair work here, but to issue repairs that that required the TC validation, prior to last year we had to go to Europe for validation. We received the French delegation in March of last year and we were already well underway on all the French products, the A-Stars, the H130s, the U.S. Coast Guard HH-65s. Then we received the German delegation at the end of the year. So we will be seeing that benefit coming in now this year.
Also, we've beefed up our training facility. We started to train on the weekends and we have started offering ab initio training. We really put ourselves in the shoes of our customers to figure out what it is that that they need from us and how can we make them more successful. One thing that they said was, “You know, Chris, you always want us to fit your schedule. We have a schedule, too.” So now seven days a week, we keep the warehouse open and we've got shifts going. We're training on the weekends now and we’re doing ab initio training.
All of that, I think, was well received by the customers.
As everyone knows, the market was in decline last year, down 50%. We ended the year with a 73% market share in North America when you exclude the Robinson R66, with 63% market share including the R66. That enabled us to actually be consistent year over year, even though the market halved itself. We listened to the market, but we also acted.
We booked 64 helicopters, out of 100 total in the North American market, and 20 customers were new to Airbus Helicopters last year. Five of the 20 didn't even know they wanted a helicopter. They were they were Gulfstream owners and we got them to think about a helicopter for getting around the city.
So we really were beating the bushes. It was competitive. We had hired a segment manager who came from NetJets and Flight Options, from the fixed-wing side, and we started to ping in this market segment. We spent time at NBAA and, for example, at Jet Aviation's La Bella Macchina, which promotes business aviation but also features a display of rare and classic Ferraris.
We're promoting this whole idea of increased congestion in cities. We identified a market segment for high-net-worth individuals whose hourly rates are such that sitting in a car for two hours a day isn't worth their time. It is worth it for them to make that trip in a helicopter, but they haven't thought about a helicopter. It's great to have a jet, but how is it going to help you get from Arlington, Texas, to your training facility in Frisco, Texas, as was the case for the Dallas Cowboys. As you know, we just sold an H145 to the Cowboys, and I believe they will be flying to the convention center today.
So where else can that work? We start looking around. There is a case in San Francisco, not in the city, which has no heliports, but in the surrounding areas. Some high-net-worth guys avoid the drive by flying their jets to Oakland and then driving into San Francisco.
We really started to appeal to this segment. Where we were different was we offered a turnkey solution: you buy a helicopter from us and we'll train you, we'll train your spouse in the ab initio program. I think we made it easier for those 20 customers to decide to buy an Airbus.
You know it's always tough to look in the mirror and see where you've fallen short on different topics. We've struggled. We struggled in the organization. I think we moved really fast and it was hard for a lot of people in my own team to keep up. And so there was a lot of a lot of pain. I guess I summed it like this at the end of 2016. I said, “Guys, we did awesome. We had a great year. I just feel like we didn't have as much fun as we should have had. So, in 2017, let's have an even a better year, but let's make sure we have more fun.
Also, at year end, I was really hoping on and committing myself on probably another six aircraft that I was needing to book. I did not see the accelerated tax depreciation effects kick in last year. I don't think we sold one helicopter on a depreciation model last year, which was tough.