Honeywell’s 14th annual Turbine-Powered Civilian Helicopter Purchase Outlook report was released today and there was little in it that encourages breaking out the champagne or ordering a new Bentley. In short, it was a mixed review: in general, not so good in the short term, not so bad in the long.
While recent order rates have been healthy and near-term purchase plans remain strong, lingering tight credit conditions and significant inventories of used production models for sale continue to cast a pall on the industry.
Further, the report noted, “Concerns over slow economic growth in Western economies has increased the level of uncertainty in purchase plans past 2012, leading to a six-point reduction in global purchase plans compared with last year.”
Nevertheless, opined Honeywell’s prognosticators, “Based on the timing of purchase plans in the operator survey and the delivery momentum expected this year and next, the outlook still calls for overall industry growth for the five-year period 2012 through 2016, compared with the previous five-year period.”
Honeywell points out that global five-year fleet replacement and expansion plans decreased to 19 percent in 2012, off six points from 2011. And although total five-year buying plans are lower, “specific purchase plans for 2012 remain very strong,” the report continued. Also, relatively lower levels of planned purchases were concentrated in 2013 and beyond, suggesting that “these plans could strengthen materially over the next few years, should political and general economic conditions improve as projected.”
Looking at specific regional demand, Honeywell said higher purchase plans in Asia helped offset some of the softness in other regions’ survey expectations.
However, purchase plans in major U.S. and European centers of demand declined by five to eight points. Other regions of the world also declined moderately compared with 2011, though their purchase plans remain above the world average.
As with other segments in the aviation industry, China is expected to be a strong contributor to broader demand for rotorcraft as the country continues to open its airspace and begins production of indigenously designed civil turbine-powered aircraft.
Global five-year demand for new turbine-powered helicopters is split almost evenly between the Americas and the rest of the world, said the report, noting also that Latin America and Asia have the highest fleet replacement and expansion expectations of all regions. In terms of projected regional demand for new helicopters, “Latin America and Asia tied for the world’s largest regional market, following North America and Europe.”
There are numerous reasons to replace a helicopter with a new one within the next five years, but most often cited is the age of the current aircraft or a planned or contracted replacement cycle. It is a rationale common to every survey, says Honeywell. Other reasons include lower maintenance costs, warranty coverage, parts availability and improved reliability/durability. However, stronger emphasis on maintenance, operating costs and warranty coverage is a departure from recent surveys.
In terms of operator preferences by class, light single-engine helicopters continue to be the most popular product class for five-year fleet replacement and expansion. In fact, 45 percent of all make/model mentions were for single-engine models in the 2012 survey, though it was down slightly from 49 percent in 2011. The most frequently mentioned light-single models were the AS350B series, Bell 407 and Robinson R66.
Intermediate/medium twins were the second most popular product class with approximately 31 percent mentions. The most frequently mentioned models were the AW139, Bell 412, EC145 and Sikorsky S-76 series. Between 40 and 50 percent of all make/model mentions in Asia and Middle East/Africa were for medium twins.
The third most frequently mentioned class was light twins at 21 percent, with the EC135, Bell 429 and A109 series most frequently mentioned for the five-year purchase in this class. In Europe, light-twin models accounted for 28 percent of total mentions. “Light twins appear to be most popular in Europe and to a lesser extent in the Americas,” said the report.
Heavy multi-engine helicopters, which typically garner a small share of overall purchase plans due to cost and specialized nature, enjoyed a noticeable increase in interest of a full percent. Within the heavy helicopter class, the most frequently mentioned models were the EC225, the Mi-171 and the S-92. Various Russian models accounted for nearly four percent of the purchase plans in this class.
Asked in the survey to indicate their “current” satisfaction over the last year with each model aircraft they operate, the top five models with the highest net scores were the A109 Power, Bell 407, Bell 429, EC130/EC350 class and EC145.
A majority of operators who responded to the survey reported that they planned to increase utilization of their helicopters this year, as follows: North America, 14 percent increasing and 4 percent decreasing; Europe, 18 percent increasing and 12 percent decreasing; Latin America, 32 percent increasing and 2 percent decreasing; Middle East/Africa, 26 percent increasing and 4 percent decreasing; and Asia, 19 percent increasing and 9 percent decreasing.
The Latin American region reported the highest average utilization in 2011. In a reversal of 2010 activity levels, Middle East/African operators reported the lowest average utilization last year.
Examining utilization trends across usage segments, oil and gas had the highest at an average of approximately 600 hours per aircraft, followed by emergency medical services at approximately 445 hours. The lowest average utilization was reported by the corporate segment at less than 300 hours per helicopter.
Honeywell’s civil helicopter outlook is based on the company’s recently conducted customer expectations survey, an assessment of consensus forecasts, a review of factory delivery rates and analysis of future new-helicopter introductions. It excludes uniformed military demand for civil helicopters, but resulting civil estimates do include government and security force demand.
This year’s survey queried more than 1,000 chief pilots and flight department managers of companies operating more than 2,450 helicopters worldwide.