Vancouver Sun

Drones, oil market among Bell Helicopter challenges

- KRISTINE OWRAM

It’s not an easy time to be a commercial helicopter manufactur­er.

Persistent weakness in the oil and gas market has eroded demand for the rotorcraft, with global shipments down 16.1 per cent in the first half of 2016 and global billings plunging 32.5 per cent, according to the General Aviation Manufactur­ers Associatio­n.

But Bell Helicopter, which currently manufactur­es all of its commercial aircraft in Mirabel, Que., sees opportunit­ies in the slump.

The company, a division of Textron Inc., announced in May that it would relocate production of its new five-passenger Bell 505 Jet Ranger X to Mirabel from Louisiana, creating 100 jobs.

The 505 is expected to receive certificat­ion from Transport Canada later this year and has booked more than 380 tentative orders.

“We really wanted to optimize our manufactur­ing footprint across the several sites that we have and better position ourselves for the current downturn in the market,” Cynthia Garneau, president of Bell Helicopter Textron Canada Ltd., said in an interview.

“The decision was made to build the aircraft here ... to maximize our engineerin­g, our manufactur­ing capabiliti­es, and also it was a reassuranc­e and commitment to our Canadian workforce.”

The move was an important one for the Mirabel plant, which has seen its workforce shrink along with global demand for commercial helicopter­s. Last year, Bell said it would lay off about 300 Mirabel workers despite winning two contracts worth a total of $328 million to build helicopter­s for the Canadian Coast Guard.

“Because we live in a very cyclical industry, for us it’s something we’ve seen in the past and we just need to continuous­ly adjust our manufactur­ing rates to adjust to that,” Garneau said.

The main culprit is the energy sector, which uses helicopter­s to survey its sites and transport workers. Textron CEO Scott Donnelly said recently the market is “very challengin­g,” but he’s hoping demand will pick up in the back half of the year.

“I certainly hope it’s a bottom. It’s pretty tough out there,” Donnelly said on the company’s secondquar­ter conference call in July.

The decision was made to build the aircraft here ... to maximize our engineerin­g, our manufactur­ing capabiliti­es.

“Oil and gas obviously remains very difficult, right? Some of these guys are in bankruptcy. You’ve got a lot of their fleet that’s sitting on the ground. They’re just not being utilized.”

Bell delivered 54 commercial helicopter­s in the first half of the year, down from 74 in the same period of 2015.

Helicopter manufactur­ers are also losing market share to drones, which can be cheaper to operate. Garneau said Bell sees this new competitio­n as an opportunit­y rather than a threat, and is working with Northrop Grumman Corp. to build unmanned aircraft using Bell’s 407 airframe.

“We’re also looking at designing aircraft that are able to support both unmanned and manned missions,” she said, adding that some of the research for that is being done in Canada.

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