Honeywell released its ninth annual turbine-powered civil helicopter purchase outlook yesterday and, according to the 10-page report, the only direction for the helicopter industry is up.
Some 3,500 new deliveries of civil-use helicopters are expected in the five-year period from 2007 to 2011, “driven in part by strong demand for light single- and intermediate twin-engine models offering new technology,” according to the report’s authors.
Among those expecting to buy a new helicopter in the coming years, the purchase expectation survey showed little indication of trade-ups, with more than 80 percent of new purchases being made to replace older aircraft in the same size/capability and price class. Only about 12 percent of respondents planned to move up to more expensive and more capable equipment.
The combination of corporate, emergency medical services (EMS) and law enforcement helicopters is expected to account for more than 60 percent of all new civil rotorcraft sales during the forecast period.
Not surprisingly, the demand for new helicopters is being driven primarily by the age of current aircraft, which is usually reflected in an operator’s desire for improved technology, more range, more power and lower operating costs, said Vicki Panhuise, v-p of Honeywell’s commercial and military helicopters business. She further noted that OEM reports of strong sales activity over the past four years “support our view that helicopter demand has great long-range prospects in a growing global economy.”
A near-term increase in demand is supported by ongoing strong worldwide demand across the board for corporate, EMS, law enforcement and utility helicopters, as well as expanding economies in Africa and Asia and continued expansion in oil-producing regions.
Findings of the survey are based on input from nearly 1,000 flight departments in North America, Latin America, Europe, Asia, the Middle East and Africa.
About 70 percent of planned purchases are for single-engine models, according to the forecast. In Latin America, 57 percent of planned purchases are for single-engine helicopters. These percentages have remained relatively stable in recent years; however, operator preferences in Africa, Asia, the Middle East and Oceania strongly favor twin-engine models with a 65- to 75-percent share indicated in the survey.
Honeywell predicts deliveries of more than 8,000 new helicopters in the period 2007 to 2017, “reflecting industry conditions that have never looked stronger in recent history,” Panhuise said.
Not surprisingly, North America remains the major market, with demand for new helicopters accounting for 42 percent of planned future purchases over the next five years, approximately the same as last year’s outlook.
The survey shows an improvement in European purchase expectations, recovering to a fleet replacement rate of 20 percent, 5 percent more than last year’s outlook. The broad pattern of buying slightly favors multi-engine models, a change from last year. As the industry moves beyond the relatively recent implementation of single-engine operations restrictions in Europe, the spike in planned orders and deliveries of twin-engine helicopters has softened, and interest in single-engine aircraft has gradually gained momentum. European operators cite regulatory issues and avionics capabilities at the main reasons for buying a new helicopter, with less concerns being cabin size, performance, operating costs and payload requirements.
Based on equivalent percent of the fleet to be replaced or expanded, Asia, Africa, the Middle East and Oceania together have maintained consistently high purchase expectations for the past five years. Operators in these regions expect to purchase new helicopters equal to 36 to 37 percent of their current fleets during the next half decade. This compares with 20 percent in Europe, 22 percent in North America and 30 percent in Latin America. The Honeywell forecast predicts that over the next five years, 22 percent of the total world new helicopter sales will be to customers in that collective region, with 65 to 75 percent of that demand for multi-engine helicopters.
After posting a record purchase expectation level last year, Latin America fell more than 10 percentage points this year. The drop in purchase expectations as a percentage of current fleet, coupled with the relatively small fleet in this geographic zone, brings Latin America’s total share of projected world new helicopter demand just below that of Europe.
According to the survey, corporate and law enforcement continue to be the leading applications for which operators said they would buy new helicopters. Corporate remains the largest use category, at 26 percent, and Latin America by far the largest geographic segment at 70 percent corporate use. EMS and utility operators rose slightly from 14 percent by respondents in 2006 to 16 percent in 2007. The highest demand-expectation increase for utility helicopters came from European operators, rising from 19 percent in 2006 to 36 percent in this latest survey.
Oil- and gas-support-use purchase expectations nearly doubled from 7.5 percent in the 2006 survey to 14 percent in the 2007 survey. As expected, the Middle East continues to be the leader, with operators’ expectations for oil- and gas-support use representing 53 percent of the region’s demand.
Finally, survey data indicate that, on a global basis, the vast majority of operators plan to use their aircraft at least as much as or more than they did during the past 12 months. In North America and Europe, 95 percent of respondents expect their utilization to be the same as or greater than the prior 12-month period. Looking ahead, nearly all Latin American operators polled indicated use would remain steady or rise. Estimates for aircraft utilization growth in Africa, the Middle East and Asia-Pacific operations run in the 93- to 96-percent range.