Helicopter appraisal firm HeliValue$ has laid bare the market so that visitors to this year’s Heli-Expo can get an idea of what is actually going on in the market, based on prices. “At HeliValue$, our most-asked question of the past quarter has been ‘What’s going on with the helicopter market?’” said Sharon Desfor, president of the Wauconda, Ill.-based company.
There are many answers, such as, “Too much supply, too little demand, accompanied by an eye-roll,” she said. “There are lots of little quirks contributing to our lackadaisical resale market.” For one, there is money, with scarce finance for used machines, and a $10 million minimum that rules out that “lonely single turbine.” Also, helicopters are well out of the comfort zone for many equipment lenders.
Second, there are regulatory aggravations. “Capital that is going to regulatory compliance is not being put into transactions,” Desfor explained. Regulators are more stringent, for example, “and helicopters are being left on the shelf because of part number or serial number mismatches against their type certificates.”
Third, there are technology changes, and one consequence is that many new models are pending, with many buyers “holding back their purchases until the next new thing,” she said.
Finally there is the perception factor: helicopters are too readily associated with business jets, which unlike helicopters have lost a lot in value. “What does all this mean?” asked Desfor rhetorically. “Everyone is waiting. Waiting for new helicopters, waiting for money, waiting for certification, waiting for clarification on new rules, waiting for fixes to ADs [airworthiness directives]. Waiting for someone else to go first.”
Overall buyers are waiting for market confidence to return as well, although some are forging ahead. “On the bright side,” said Desfor, “Milestone is going first. Lease Corporation International is going first. Bristow and CHC and Inaer and Air Methods and Air Medical Group and all the big operators are going first. Now we have to wait to make sure the big guys are all okay. Then maybe we can start picking up the pieces–and prices–of our market.”