Winding Up New Offshore Opportunities

By S.L. Fuller | February 27, 2018

With optimism ahead for the oil and gas market, there may be some promise for helicopter operators.

The oil and gas market is showing signs of rebounding. Waypoint Leasing noted that positive trend in a study it conducted on the emerging “super-medium” class of helicopters. But there’s another offshore business emerging that the helicopter industry will probably want to keep an eye on: wind farms.

Waypoint has identified offshore wind farms as a market that could stimulate the helicopter market with demand. Although currently a small market, offshore wind farms are gaining popularity and, with them, a need for transportation to them.


“Wind power is one of the fastest growing forms of energy production, and offshore wind farms are increasingly being supported by helicopters,” Waypoint said. “According to the Westwood Global Energy Group, global offshore wind farm capacity is expected to increase 330% over the next decade, and with it helicopter expenditures for offshore wind farms are projected to grow three times … Westwood has noted that within the offshore wind market, ‘future growth prospects are very positive’ for helicopters.”

Wind energy is not a new concept. Waypoint said many wind farms were originally developed in near-shore areas, readily accessible by boats. Now, as developments move further off shore, helicopters have started to act as the “more economical” transportation platform to and from the installations, Waypoint said. As wind farms grow farther from the shore, helicopters become a more favorable tool.

One way in which helicopters are favorable to boats is the ability to operate in different types of weather. Waypoint gave an example using the calculated probability of a successful mission to an offshore wind installation in the North Sea, comparing the two modes of transportation. According to the lessor, helicopters are estimated to have an 87% probability of access, while vessels only have a 51% probability of access. This difference, according to Waypoint, is “almost exclusively” weather-related. In the summer months, both boats and helicopters find high success rates due to the relatively calm weather conditions. But in the winter, success rates for boats fall due to sea conditions.

European manufacturers Airbus Helicopters and Leonardo have already started capitalizing on wind energy opportunities. According to Waypoint, Germany is set to be a leading contributor to the projected increase in helicopter usage.
Waypoint told R&WI that the U.K. and Sweden, along with Germany, are also the top players in the offshore wind industry. It’s also worth keeping track of activities in Denmark, the Netherlands and Taiwan. China is the world’s largest generator of wind power, Waypoint said, although most of its operations are on shore.

The perfect fit to this type of operation could be found in light twin-engine and medium helicopters. Waypoint said Airbus products are currently the most common in the market — EC135/H135 and EC145/H145 (and the H160, which is still in development). Leonardo is marketing its AW169 and AW139 to wind energy companies. However, Waypoint said regulatory requirements are currently evolving. This means aircraft requirements are subject to change.

Light twins, according to Waypoint, are used for hoist operations, lowering crews onto the turbine from the air. These operations are used for fast troubleshooting and scheduled servicing. Medium helicopters would typically be used to transport crews to service vessels with helipads and to offshore platforms or substations.

Onshore wind operations don’t really require the use of helicopters, and it is unknown how a helicopter might augment the safety and efficiency of onshore wind turbine installations.

“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 it’s 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.”

Is it Worth Investing in Super Mediums?

The main players in this class of aircraft are the Leonardo AW189 and the Airbus Helicopters H175 as they are currently in production and being delivered to customers — they were the focus of a study conducted by Waypoint. When the Bell Helicopter 525 enters the market (supposedly in 2019), Waypoint projects it to be a serious competitor. The emerging super-medium class could be a good fit for some mission profiles in the optimistic offshore oil and gas market.

This super-medium trend is exemplified by an initiative CHC Helicopter launched in July. It introduced 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. The operator worked with lessor Milestone Aviation to deliver aircraft for “energy transport missions.”

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.

According to Waypoint’s study, a super-medium efficiently closes the “gap in the payload range offering,” as well as the acquisition price gap, between mediums and heavies. Waypoint said all of its technical data came directly from the OEMs. The lessor asked for payload/range charts based on a specific set of parameters. Cost data was also provided by OEMs, and Waypoint used its own fleet acquisition and operating cost data. The rest of the data came from Conklin & de Decker.

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.

Bell has given numbers that Waypoint said the manufacturer believes are conservative in light of data collected during recent test flights of its 525. The firm also mentioned that maximum takeoff weight increases as the platform matures. As of the time of the study, the 525 could bring 16 passengers to the 150-nm mark and 10 passengers almost 250 nm. With auxiliary tanks, the 525 could bring about seven passengers nearly 300 nm. These numbers would be marginally better than the current capabilities of both AW189 and H175, depending on range.

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. To demonstrate this last point, Waypoint drew comparisons to Sikorsky’s S-92. (Comparisons also could have been made with the Airbus H225. But since it has not been flying as much due to its accident and subsequent grounding, much H225 work has been taken over by S-92s, and debate around capital cost would skew the cost analysis.)

Waypoint showed in its study that total cost per passenger seat mile is about $0.50 to $1 more in a new-build S-92 with a 140-nm rig range, compared with an H175 and an AW189 with extended range. This, the firm said, is driven in large part by the higher capital cost of the new-build heavy. However, used S-92s presented a different dynamic in Waypoint’s study. Using a capital cost range of $16 million to $20 million (whether they are purchased or leased) for the used S-92s with all other data constant, they performed about equal to or better than the super mediums on a cost-per-passenger seat mile basis.

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