MAR­KETS WITH SOAR­ING PO­TEN­TIAL

Var­i­ous sur­veys have given dif­fer­ent es­ti­mates on com­mer­cial heli­copter de­liv­er­ies, but they all re­main pos­i­tive about the Asia-Pa­cific re­gion which has many ar­eas that are poorly con­nected by air trans­porta­tion

SP's Airbuz - - Table Of Contents - BY R. CHAN­DRAKANTH

Var­i­ous sur­veys have given dif­fer­ent es­ti­mates on com­mer­cial heli­copter de­liv­er­ies, but they all re­main pos­i­tive about the Asia-Pa­cific re­gion which has many ar­eas that are poorly con­nected by air trans­porta­tion.

TIME IS OF ESSENCE. With that be­ing the norm of the present gen­er­a­tion for both busi­ness and leisure pur­poses, the mode of trans­porta­tion be­comes cru­cial and there is no doubt, what­so­ever, avi­a­tion scores over ev­ery­thing else. And, if one has to reach in­hos­pitable lo­ca­tions, the un­con­nected re­gions and places where reg­u­lar modes of trans­porta­tion have their own set of chal­lenges, then he­li­copters come into play.

In Asia, the need to con­nect vast ar­eas of un­con­nected re­gions is more than on any other con­ti­nent. With this grow­ing need, the re­gion is be­com­ing an attractive mar­ket for man­u­fac­tur­ers of he­li­copters and the many sur­veys by dif­fer­ent in­sti­tu­tions have one thing in com­mon — high­light­ing how the heli­copter mar­ket is grow­ing at a fast pace and have a dis­tinct edge over other car­ri­ers. ASIA-PA­CIFIC MAR­KET EX­PANDS. Var­i­ous sur­veys have given dif­fer­ent es­ti­mates on com­mer­cial heli­copter de­liv­er­ies, but they all re­main pos­i­tive about the Asia-Pa­cific re­gion, which has many ar­eas that are poorly con­nected or not con­nected at all by any kind of air trans­porta­tion. As­cend Con­sul­tancy, part of Flight­global, has pre­dicted that Asia-Pa­cific’s share of com­mer­cial heli­copter de­liv­er­ies will rise to 37 per cent in 2025 from 26 per cent in 2015. The sur­vey pointed out that he­li­copters for busi­ness/ pri­vate use would dom­i­nate with 33 per cent of de­liv­er­ies, fol­lowed by util­ity/multi-role he­li­copters at 22 per cent and off­shore sup­port with 13 per cent. In the Asia-Pa­cific, util­ity he­li­copters ac­counted for 26 per cent share, closely fol­lowed by busi­ness/pri­vate use at 25 per cent. The other seg­ments such as Mede­vac, law en­force­ment and VIP move­ment were all in sin­gle dig­its.

Shar­ing the sur­vey de­tails was Chris Sey­mour, Head of Mar­ket Anal­y­sis at As­cend, re­cently ahead of the event Rotorcraft Asia, a civil­ian heli­copter trade show be­ing held from April 18 to 20 this year in Sin­ga­pore.

THE ‘BIG FOUR’ OEMS — AIR­BUS, BELL, SIKO­RSKY AND LEONARDO — COL­LEC­TIVELY MAKE UP NEARLY 90 PER CENT OF THE MAR­KET

AUS­TRALIA LEAD­ING THE PACK. In Asia-Pa­cific, Aus­tralia has about 2,000 he­li­copters, while neigh­bour­ing New Zealand has some 800. China and Ja­pan also have about 800 he­li­copters each with the for­mer grow­ing ex­po­nen­tially, thanks to the rapid sales of civil­ian/para­pub­lic heli­copter fleet. In­dia has a heli­copter fleet of 300, which is ex­pected to go up to 800 in the next decade. State-owned Pawan Hans has the largest heli­copter fleet with 50 in In­dia.

Dennis Lau of As­cend Con­sul­tancy has said that Asia-Pa­cific’s com­mer­cial heli­copter fleet has grown 64 per cent since 2005 and there are over 6,000 he­li­copters in ser­vice by ei­ther civil­ian or govern­ment op­er­a­tors.

Mean­while, Hong Kong busi­ness avi­a­tion con­sult­ing firm Asian Sky Group (ASG) is re­leas­ing its highly-an­tic­i­pated year end 2016 Asia-Pa­cific Civil Heli­copter Fleet Re­port. This is the fourth con­sec­u­tive year ASG has pro­duced the re­port and it again fea­tures a de­tailed break­down of the Asia-Pa­cific he­li­cop- ter fleet (ex­clud­ing pis­tons) by fleet size, re­place­ment cost, mis­sion seg­ments, size cat­e­gories and orig­i­nal equip­ment man­u­fac­tur­ers (OEMs).

The 2016 Re­port also in­cludes a sec­tion on off­shore ac­tiv­ity, dis­cussing the con­tin­ued im­pact of the oil and gas down­turn on the civil heli­copter mar­ket and an in-depth sec­tion on the Asi­aPa­cific’s fastest-grow­ing civil heli­copter mar­ket, China. The new­est ad­di­tion to this year’s re­port is an­other first by ASG — a sec­tion on the heli­copter leas­ing mar­ket in the Asia-Pa­cific re­gion. This new sec­tion ex­am­ines the rea­sons for leas­ing, types of leases avail­able and pro­vides a break­down of leased he­li­copters by lessor and coun­try. The re­port spot­lights a num­ber of op­er­a­tors and OEMs in the re­gion. ASG has fea­tured op­er­a­tors HeliKorea, China South­ern Air­lines Gen­eral Avi­a­tion Lim­ited and the Leonardo Com­pany. Also spot­lighted are the Leonardo AW169 and AW189, all of which have been high­lighted for their multi-mis­sion con­fig­u­ra­tions and pop­u­lar­ity within the re­gion.

ASG said that the Asia-Pa­cific civil heli­copter fleet (ex­clud­ing pis­tons) num­bered 3,924 at the end of 2016, an in­crease of 4 per cent over year end 2015. This in­crease is no­tably smaller than in past years, with only half of the 34 coun­tries ex­pe­ri­enc­ing yearon-year growth. China re­mained the re­gion’s growth driver — as it has for the past few years – adding 85 he­li­copters in 2016, an in­crease of 21 per cent year-on-year. The Asia-Pa­cific re­gion’s fleet con­tin­ues to be largely po­si­tioned in four coun­tries. In unit terms, 61 per cent of the heli­copter fleet is based in Aus­tralia, Ja­pan, China and New Zealand. Aus­tralia rep­re­sents the largest mar­ket over­all and is the largest mar­ket for Bell, fol­lowed by Ja­pan, the largest mar­ket for Air­bus and Leonardo and China, the largest mar­ket for Siko­rsky. New Zealand fol­lows these three, with the largest mar­ket for MD. THE ‘BIG FOUR’. In terms of re­place­ment cost, the ‘ big four’ OEMs — Air­bus, Bell, Siko­rsky and Leonardo — col­lec­tively make up nearly 90 per cent of the mar­ket, with Air­bus at 43 per cent and the other three, mak­ing up 47 per cent. Presently, the Asi­aPa­cific fleet in­cludes a wider va­ri­ety of heli­copter mis­sion pro­files than ever be­fore, with 54 per cent of the fleet in multi-mis­sion use, fol­lowed by 12 per cent for cor­po­rate and pri­vate, 9 per cent for off­shore op­er­a­tions, 7 per cent for search and res­cue and 5 per cent for emer­gency med­i­cal ser­vices. In re­place­ment cost terms, off­shore has be­come the largest seg­ment, with 21 per cent of the fleet, fol­lowed by search and res­cue (SAR) at 11 per cent. A more re­cent shift in the Asia-Pa­cific fleet has been the us­age by lo­cal op­er­a­tors of air­craft dry-leased from ded­i­cated heli­copter leas­ing com­pa­nies. By the end of 2016, Asia-Pa­cific’s op­er­a­tors were us­ing over 170 he­li­copters dry-leased from third par­ties, with a re­place­ment cost value of ap­prox­i­mately $1.5 bil­lion. Aus­tralia had the largest num­ber of leased he­li­copters at 60, op­er­at­ing in a va­ri­ety of roles from off­shore, emer­gency med­i­cal ser­vices (EMS) and multi-mis­sion.

In­dia fol­lows with 28, used mainly in the off­shore seg­ment and In­done­sia is next with 25, with the ma­jor­ity used for multi-mis­sion

IN ASIA-PA­CIFIC, AUS­TRALIA HAS ABOUT 2,000 HE­LI­COPTERS, WHILE NEIGH­BOUR­ING NEW ZEALAND HAS SOME 800

op­er­a­tions. The largest lessors in the Asia-Pa­cific re­gion in­clude Mile­stone Avi­a­tion Group, Way­point Leas­ing, Aus­tralia & New Zealand Bank (ANZ), Air­work NZ, Lease Cor­po­ra­tion In­ter­na­tional (LCI) and Ea­gle Copters. “With each is­sue of the Asia-Pa­cific Civil Heli­copter Fleet Re­port, ASG bet­ter un­der­stands the data and in­for­ma­tion that read­ers and the in­dus­try need,” says ASG Manag­ing Direc­tor Jef­frey Lowe. “The re­port is con­stantly evolv­ing and the Heli­copter Leas­ing Mar­ket Over­view is an ex­am­ple of that. This a sec­tion the in­dus­try will find in­sight­ful, as this data is lim­ited and of­ten in­ac­ces­si­ble. Over­all, the re­port con­tin­ues to pro­vide rel­e­vant in­for­ma­tion and has be­come an in­dis­pens­able source on busi­ness avi­a­tion within the Asia-Pa­cific re­gion.” The Asia-Pa­cific Civil Heli­copter Fleet Re­port will be dis­trib­uted in the Asia-Pa­cific re­gion with a Chi­nese ver­sion made avail­able in China. For the full re­port, visit the ASG web­site www.asian­sky­media.com. HONEYWELL LOW­ERS ITS FORE­CAST. Sim­i­larly, Honeywell Aero­space in its 18th an­nual Tur­bine-Pow­ered Civil Heli­copter Pur­chase Out­look, Honeywell fore­casts 4,300 to 4,800 civil­ian use he­li­copters will be de­liv­ered from 2016 to 2020, roughly 400 he­li­copters lower than the 2015 five-year fore­cast. Its fore­cast is in the back­ground of a slower global eco­nomic growth en­vi­ron­ment and in­creased vo­latil­ity in oil and gas-re­lated mar­kets, the heli­copter in­dus­try is re­act­ing with a cau­tious out­look for neart­erm new pur­chases.

“The cur­rent global eco­nomic sit­u­a­tion is caus­ing fleet man­agers to eval­u­ate new heli­copter pur­chases closely, and that is why we are see­ing a more cau­tious five-year de­mand pro­jec­tion com­pared with pre­vi­ous years,” said Carey Smith, Pres­i­dent, De­fense and Space at Honeywell Aero­space. “Even in a slower growth en­vi­ron­ment, Honeywell is well-po­si­tioned to help op­er­a­tors keep cur­rent fleets lasting longer with af­ter­mar­ket up­grades and re­pairs.”

The Honeywell sur­vey showed new pur­chase-plan rates were sta­ble, but op­er­a­tors cited fewer to­tal new model pur­chases over the five-year pe­riod, lead­ing to a more cau­tious near-term out­look. When con­sid­er­ing a new pur­chase, op­er­a­tors’ re­sults mir­rored those from last year, with make and model choices for their new air­craft most strongly in­flu­enced by range, cabin size, per­for­mance, tech­nol­ogy up­grades and brand ex­pe­ri­ence. Heli­copter fleet util­i­sa­tion gen­er­ally de­clined when com­pared with that of the year gone by. Over the next 12 months, us­age rates are ex­pected to im­prove but at a re­duced rate.

It said that the de­mand for he­li­copters in Brazil, Rus­sia, In­dia and China (BRIC) con­tin­ues to ebb and flow, with stronger re­sults recorded for In­dia and Brazil in the 2016 sur­vey. In In­dia and Brazil, new heli­copter pur­chase plan rates ex­ceed the world av­er­age by a wide mar­gin. Planned Chi­nese pur­chase rates slipped, re­flect­ing near-term slower eco­nomic growth prospects. No­tably, no Chi­nese-built mod­els re­ceived spe­cific pur­chase in­ter­est men­tions in the sur­vey. How­ever, civil de­liv­er­ies are be­ing made and have been re­flected in the Honeywell out­look. IN­DIA, A COUN­TRY ON THE MOVE. In­dia’s civil avi­a­tion mar­ket is soar­ing and is among the fastest grow­ing in the world with over 20 per cent growth. It is ex­pected to reach the third spot in world avi­a­tion mar­kets in the next five years. How­ever, heli­copter us­age has not grown at the same pace as air­lines. It was in 1986 that he­li­copters got a boost in In­dia when the Heli­copter Cor­po­ra­tion of In­dia was set up. It was later rechris­tened as Pawan Hans He­li­copters Ltd. which has the high­est ro­tary-wing fleet in the coun­try. In­dia ac­counts for less than 1 per cent of the world heli­copter pop­u­la­tion with about 300 chop­pers. In­dia cur­rently has fewer civil he­li­copters than Switzer­land. Hope­fully, all this will change as the govern­ment led by the Prime Min­is­ter Naren­dra Modi that is work­ing to­wards trans­form­ing the skies through all modes of aerial trans­porta­tion. And a num­ber of OEMs have or are in the process of es­tab­lish­ing joint ven­tures to start lo­cal pro­duc­tion here, thus giv­ing them an edge as they com­pete to win or­ders here. The plan of the govern­ment to en­hance re­gional con­nec­tiv­ity is open­ing the avi­a­tion sec­tor for all cat­e­gories of air­craft — be it ro­tary- or fixed-wing.

Per­for­mance cri­te­ria of the heli­copter in terms of speed, range, safety and reli­a­bil­ity, hot/high ca­pa­bil­ity, cabin size and brand ex­pe­ri­ence are the rea­sons why op­er­a­tors look at cer­tain brands. Some of the sought af­ter chop­pers are Euro­copter’s EC 130/AS 350, Bell 407, Robin­son R-66 and Agus­taWest­land’s AW109, which are op­er­a­tional in In­dia. The next cat­e­gory is the in­ter­me­di­ate/medium twinengine he­li­copters and they in­clude AW139, AW169, Bell 412, EC 145 and Siko­rsky S-76. These types of he­li­copters are more in de­mand in the oil and gas arena and are cer­tainly more ex­pen­sive to op­er­ate whereas the heavy class of he­li­copters is mostly in use in de­fence.

With the govern­ment try­ing to ad­dress pol­icy is­sues and try­ing to ease reg­u­la­tory bot­tle­necks, it is hoped that the In­dian avi­a­tion mar­ket, ir­re­spec­tive of the air­craft, will get a boost. How­ever, the high cost of op­er­a­tions holds back the seg­ment. Avi­a­tion tur­bine fuel, cus­toms duty for im­port of he­li­copters/spares and ap­pli­ca­tion of fixed-wing air traf­fic rules to he­li­copters have stymied the growth of civil heli­copter in­dus­try to a large ex­tent. An­other ma­jor prob­lem is lack of in­fra­struc­ture. While the scope of op­er­a­tions and util­i­sa­tion for com­mer­cial he­li­copters is vast, the req­ui­site in­fra­struc­ture is al­most non-ex­is­tent both in the met­ros and re­mote ar­eas.

Pro­ject­ing that the num­ber of civil he­li­copters in In­dia will in­crease by nearly three­fold to 800 in next 10 to 20 years, the Cen­tre for Asia Pa­cific Avi­a­tion (CAPA) said that the govern­ment’s am­bi­tious ‘Make in In­dia’ pro­gramme cou­pled with strate­gic ini­tia­tives could make this growth hap­pen. Ac­cord­ing to CAPA, al­most half of this pro­jected re­quire­ment would be needed for pro­vid­ing re­gional con­nec­tiv­ity, which is one of the fo­cus ar­eas of the new Na­tional Civil Avi­a­tion Pol­icy. IT IS HAP­PEN­ING. One of the first signs is that In­dia fi­nally gets an ex­clu­sive heliport. In­au­gu­rated this year, the Rohini fa­cil­ity is In­dia’s first in­te­grated fa­cil­ity for ro­tary-wing air­craft in­clud­ing their land­ing and take-off. It has a ter­mi­nal build­ing that can cater to 150 pas­sen­gers per day be­sides sep­a­rate air traf­fic con­trol (ATC), fire and fu­elling ser­vices. In Fe­bru­ary 2016, Pawan Hans car­ried out trial sor­ties from the heliport and has planned to go for full-scale chop­per op­er­a­tions from May on­wards. This is ex­pected to re­duce con­ges­tion at the Delhi Air­port that cur­rently han­dles about 40 to 50 heli­copter ar­rivals and de­par­tures on an av­er­age per day be­sides the large-scale fixed-wing op­er­a­tions.

De­spite these reg­u­la­tory and in­fras­truc­tural is­sues, due to its vast area and var­ied ter­rain, In­dia is a heli­copter coun­try. And this throws open enor­mous op­por­tu­ni­ties to ex­pand eco­nomic ac­tiv­ity!

IN­DIA HAS A HELI­COPTER FLEET OF 300, WHICH IS EX­PECTED TO GO UP TO 800 IN THE NEXT DECADE

(Top) Pawan Hans AS365 N3+; (Above) Agus­taWest­land AW169

(Top) Bell 412 multi-tur­bine en­gine heli­copter; (Above) Siko­rsky S-92 heli­copter

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