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Helicopter Market Outlook 2010

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                                                                                                                     MARCH 2010




Helicopter
Market Outlook 2010
     by Rod Simpson

It is no secret that the business aviation market has suffered badly during the world
recession and that the forecast for the next few years shows only a slow recovery.
So, it would be easy to assume that the helicopter market shares the same dismal
picture. In reality, prospects for the sales of new helicopters over the next decade
                                                                                                                         Enstrom 480
are rather more optimistic.


It is true that 2009 was hardly an          orders for the UH-72A Lakota for the        Police and Emergency Market Resilient
outstanding year for civil market           US military forces. At Sikorsky, 75%        In the civil and public service (CPS)
sales, but the military demands of the      of the 2009 sales volume was military.      sector, Eurocopter, whose results largely
Middle East conflict and paramilitary       This has allowed manufacturers to           reflect the current state of the industry,
requirements for homeland security          continue key commercial research and        continues to be the largest manufacturer
have meant respectable revenues for         development projects such as Sikorsky’s     with a worldwide market share of over
many helicopter manufacturers. For          new generation S-76D.                       50%. However, 2009 was challenging.
example, Eurocopter has booked 173                                                      While military orders stimulated a rise
                                                                                        in revenues from $6.4 to $7.8 billion, this
                                                                                        disguised a collapse in the sales of small
                                                                                        civil helicopters. Overall, Eurocopter’s
                                                                                        net CPS orders dropped to less than
                                                                                        half the 2008 level - from 715 units down
                                                                                        to 344 - with the smaller EC120 and
                                                                                        Ecureuil (Squirrel) being hard hit. This
                                                                                        is hardly surprising because sales of
                                                                                        personal and corporate helicopters have
                                                                                        suffered the same fate as business jets.
                                                                                        Demand for new aircraft has collapsed
                                                                                        and there is a large inventory of good
                                                                                        used helicopters in the 6/7 seat class
                                                                                        (such as the Bell 407, EC120 and Squirrel)
                                                                                        at bargain prices.

                                                                             Bell 407
                                                                                                            MARCH 2010




Bell’s results were a little brighter, with   Long-term Outlook Brighter
153 new deliveries last year (compared        The well-respected forecasters at Rolls-
with 167 in 2008), including the first of     Royce predict that the helicopter market      ADVERTISEMENT
their Model 429s. It is in the medium-        will be worth $38 billion over the next
capacity utility helicopter market, which     decade, equivalent to sales of 10,300
also includes the Eurocopter EC145 and        new civil rotor aircraft and 6,100 military
the AgustaWestland AW139, that things         units. Rolls-Royce forecasts that output
were more promising. While sales in           will start rising in 2011 from present
2009 were still affected by the recession,    levels, to reach a peak of just under
important customer orders came from           1,200 civil sales annually and will level
police and medical emergency services         off at this volume through to 2019.
which seemed to be quite resilient.
                                              Honeywell, which also provides solid
Offshore Replacements                         forecasts of industry activity, is slightly
The offshore oil and gas sector is also       less optimistic, seeing a similar delivery
a very important market with existing         pattern to the last five years with
operators replacing older equipment.          shipments of 4,250 rotor units in the
AgustaWestland has a strong reputation        2010 to 2014 period. While Honeywell
with AW139 purchasers such as Bristows        notes that there has been an increase
and the Qatar-based Petroleum Air             in the utilisation of turbine helicopters
Service. Eurocopter’s Dauphin still sells     in the closing months of 2009, they still
to this sector, with a fresh seven-aircraft   feel tight credit and depressed economic
order recently announced for Pawan            conditions will mean only a gradual
Hans in India, but the new EC175 will also    return to higher volumes. Consequently,
appeal to such customers. The offshore        industry expectations are that total
segment has also provided a market for        delivery numbers in 2010 will be similar
Eurocopter’s larger Super Puma family         to the 2009 volume of around 1,450 units.
which scored 81 unit sales compared
with 35 in 2008 and for Sikorsky, whose       Light Rotor Revolution
S-92 is taking over from its predecessor,     Innovation is the key to the helicopter
the S-61N.                                    industry’s future health and all the
                                              manufacturers are spending significant
Finally, one should not forget the Russian-   amounts of money on refreshing their
designed Mil Mi-8/Mi-17 in the 13-tonne       product lines. The smaller manufacturers
class, which has been extensively             need this more than the others and
upgraded by Kazan Helicopters and the         Robinson Helicopter is hoping that its new
Ulan Ude Aviation Plant and is a favourite    R66 will save its fortunes. 2009 was a bad
with the United Nations and other public      year for Robinson with deliveries halved
support bodies. The resilience of the         (to 433 units) because of the shortage of
larger models provides strong revenues        bank finance for its large body of private
even if overall unit volumes may have         clients and order cancellations resulting
suffered at the smaller end.                  in a stockpile of undelivered R-44s at the
                                              Torrance factory.
                                                                                                                            MARCH 2010




However, the R66, powered by a                 consumption of over 30% compared              on a backlog of over 300 orders for the
Rolls-Royce R300 turbine, and very             with the existing Turboméca Arrius            Model 429 and Sikorsky has revitalised
competitively priced at $770,000, could        turboshaft. Eurocopter is also working        its long-established S-76 with the new
spark a revolution in the light helicopter     on several new technologies including its     “D” model. At AgustaWestland, work
market. Externally similar to the R44, it is   Blue Edge and Blue Blade rotor systems        continues on the new AW XX9 light twin
a five-seater with a respectable baggage       which embody new shaping and trailing         and two more prototypes are due to join
compartment and turbine performance.           edge flaps, and are intended to reduce        the BA609 programme – although planned
It will certainly provide stiff competition    vibration and external noise levels.          certification of this revolutionary tilt rotor
for the Enstrom 480B, although Enstrom         Expect, also, two new models from             machine has now been extended to 2013.
has gained some useful orders recently,        Eurocopter later this year. They are being
including one for 16 of its 480B training      reticent on the details but the Eurocopter    Overall, there is uncertainty about the pace
helicopters for the Royal Thai Army and        X4 replacement for the venerable              of worldwide economic recovery among
follow-on contracts from Peru for its          Dauphin is certainly on the cards.            helicopter industry manufacturers – but
piston engine F28F.                                                                          sufficient long-term confidence for them
                                               What is not a secret is the new EC175,        to press forward with their key projects.
New Technologies                               which made its first flight in December
At Eurocopter, the EC120, whose 2009           and is being developed under a Chinese
order intake slumped from 85 to just 8         joint venture. Orders are in hand for 114
sales, is expected to be re-engined with       EC175s for 14 customers. Bell is sitting
a diesel engine which will provide lower
emissions and an improvement in fuel




Sikorsky S-76D




                                                                                             Landings: Buenos Aires
                                                                         www.



                                                                                        Business aviation facilities and services
                                                                                        in and around Buenos Aires.

				
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