Commercial

A Look at 2017 Market Trends that Could Inform 2018 and Beyond

By S.L. Fuller | December 25, 2017

Commercial Helicopter Photo

Photo from file

Good news: the rotorcraft market is trending in the right direction. 2017 actually saw some stabilization in that department, as well as the promise of recovering and emerging markets. These highlights and more are discussed in the newest R&WI January 2018 issue.

Rotorcraft shipments and billings are trending in the right direction. The General Aviation Manufacturers Association (GAMA) said rotorcraft shipments have increased by 7.7% year-to-date. And compared to last year, rotorcraft billings increased by 8.8% to $2.7 billion. General aviation fixed-wing aircraft shipments increased by 1.7% and billings decreased 2.8%.

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GAMA said that during the third quarter of 2017, there was an increase in piston helicopter shipments from 168 to 190 units in the first nine months of 2017 compared to last year. Turbine helicopter shipments, the association continued, increased by 5.6% to 471 units. As of the November report, Airbus Helicopters had moved the most helicopters in 2017. In the third quarter, the manufacturer shipped 67 aircraft for total billings of $369.5 million, according to GAMA’s report. Year-to-date, Airbus has shipped 242 units for more than $1.19 billion in total billings. With top numbers for the manufacturer, the H125/H125M has accounted for 85 of those units. That aircraft was also the top mover in the third quarter.

Toward the end of 2017, Waypoint Leasing published two reports that outlined some promising opportunities for helicopters in a couple offshore markets. The emerging class of “super-medium” helicopters — which includes the Airbus H175, Leonardo AW189 and the in-production Bell 525 — are probably worth investing in. Waypoint said that there is life in the oil and gas market as it has stabilized and is showing signs of upward trending growth. The emerging super-medium class could be a good fit for some mission profiles.

This super-medium trend is exemplified by an initiative CHC Helicopter launched in July. It announced it was introducing the AW189 and H175 to its global fleet in what the company called its “super medium aircraft program” for operations in the North Sea and Australia. In October, Safran Helicopter Engines unveiled a new, 2,500 to 3,000-plus shp engine family for super-medium and heavy helicopters. Its first application would be on the AW189. A super-medium efficiently closes the “gap in the payload range offering,” as well as the acquisition price gap, between mediums and heavies, according to the lessor’s study.

In Australia, Brazil, the Netherlands, Nigeria, Norway and the U.K., the vast majority of offshore beds — a proxy for number of passengers — are located between 125 and 150 nm from the nearest helicopter base, according to Waypoint. This means that most can be serviced by a super medium carrying a full, 16-passenger load and no need to drop weight to go further. This is especially true if the aircraft has an underbelly fuel tank, like the AW189 has, depending on payload. With only 14 passengers, the helicopters can go close to 200 nm. Waypoint also concluded that the super mediums available are less expensive to operate than new-build heavies, largely due to lower capital cost and lower maintenance costs, as well as some improved efficiencies.

The other emerging offshore industry is wind energy. Waypoint identified offshore wind farms as a market that could stimulate the helicopter market with demand. Although currently too small to create a significant impact, offshore wind farms are gaining popularity and with it, a need for transportation. Wind energy is not a new market. But Waypoint said many wind farms were originally developed in near-shore areas, readily accessible by boats. Now, as developments move further offshore, helicopters have started to act as the “more economical” transportation platform to and from the installations, Waypoint said. As wind farms grow and are located farther from the shore, helicopters become a more favorable tool. Light twin-engine and medium helicopters could fit the job description. Leonardo is marketing its AW169 and AW139 to wind energy companies.

“Helicopter support for wind power is still in a nascent stage – the first deliveries of aircraft specifically for wind power support were made in 2015, and its estimated that there are no more than 30 aircraft worldwide currently dedicated to providing wind power support,” said Waypoint. “The research noted here, however, makes us confident that there will be at least 100 aircraft servicing these types of installations by 2021.”

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