Brisk helo sales boost completions business

 - September 15, 2006, 7:56 AM

If the helicopter industry has been going nowhere fast in recent years, the direction now appears to be up, and shops doing special-mission and corporate helicopter interiors are benefiting.

At Heli-Expo 2006 earlier this year, helicopter sales announced by the manufacturers topped $620 million. Sikorsky noted that it had delivered 49 civil helicopters worth $600 million last year and anticipated more of the same this year. According to American Eurocopter, “We are heading into a very, very active year; one of the best years we’ve had, in new and used helicopter sales, across all market segments.” Later in the spring at the European Business Aviation Convention & Exhibition in Geneva, Eurocopter showed up with two of its most popular twin-engine models–the EC 135 and EC 155-B1–in corporate livery.

AgustaWestland announced at Heli-Expo that work was well under way on its new Philadelphia plant as “a further commitment” to the company’s U.S. customer base. The $27 million, 110,000-sq-ft plant is scheduled to be completed by year-end.

The annual Honeywell turbine-powered civil helicopter purchase outlook supported the enthusiasm that was on display at Heli-Expo 2006 with a glowing forecast. Among the predictions was a 15-percent increase in civil helicopter sales from 2006 to 2010 over the previous half-decade and the sale of nearly 6,000 new civil helicopters between 2006 and 2016.

Business isn’t just good, said Olga Croyle, director of marketing and customer service at Texas Aviation Services, “It’s amazing.”

The privately owned Fort Worth, Texas center started last year with about two dozen employees, and Croyle said that by the end of this year that number will be closer to 100. As for work, Texas Aviation expects to do 60 helicopter interiors this year, of which about a quarter will be high-end corporate cabins.

Croyle said that corporate and private customers expect the same quality in their helicopter cabin that they are accustomed to in a business jet. In fact, she added, some have insisted that the interior of the helicopter match that of their business jet, from carpets and seats to wood veneer and finish on the trim and cabinetry. “We’re a little limited in terms of weight and cabin size,” said Croyle.

Texas Aviation has its own exterior paint shop, “booked through this year and still fielding requests.”

Texas Aviation typically does most of the cabin cabinetry and seat upholstery in-house but does occasionally go outside for help–to Lifeport Interiors of Woodland, Wash., and Air Methods for cabinetry, and to Aero Comfort of San Antonio for seat upholstery.

Nearby helicopter OEMs Bell Helicopter and Eurocopter have in-house cabin completion shops, but Texas Aviation says it is seeing an increasing number of third-party customers who are dissatisfied with the OEMs, citing the price or the wait or both. This year has been good for Texas Aviation because Bell and Eurocopter were both sold out early for all of 2005, and those aircraft are now coming off the line.

Keystone: More Third-party Completion Work

If David Ford, president of Keystone Helicopters, is less enthusiastic than Croyle, he is only slightly so. Heli- copter manufacturer Sikorsky bought the West Chester, Pa.-based company last December partly as a means of ensuring completion capacity for its own line. “They’re sold out into 2008 for the S-76 and the S-92, and to the extent that we’re doing all of Sikorsky’s commercial helicopter interiors, that gives us a longer backlog. At the same time, they want us to continue our other OEM work.”

Keystone has traditionally dealt directly with Agusta for cabin completion work. Keystone has dealt primarily with the owner-operators with regard to cabin completion. However, said Ford, “We’ve done more completion on third-party helicopters this year than ever, and we’re booked well into the fall.”

“Based on our business plan, which is on track, we’ll see about a 15-percent revenue increase in 2006,” Ford said. Part of that is driven by a move into a new, 120,000-sq-ft facility about two months ago, which increased capacity. Nor is the expansion complete. Now under construction is a 30,000-sq-ft paint and composites shop. “It’ll help us by adding about 25 percent more capacity for exterior paint.”

The other expansion, which Ford said is no less important, is at the regulatory level. The company has made a formal application with the FAA for its own production certificate, in addition to its Part 145 repair certificate. “It will take us to a new level of design and certification.”

Keystone does some in-house cabinetry and upholstery. More often, the company will do the design and outsource for the major components.

Ford chuckles–but not in disbelief– at the idea of customers who want a helicopter interior that matches that of their business jet. “We’ve had customers who wanted their helicopter cabin to match the stateroom of their yacht.”

Ford said Keystone has seen “a lot of oil company activity” in terms
of interiors. “They’re buying new and refurbishing the old–companies such as PHI and ERA–and it’s being driven by oil prices and the demand for new sources of oil.”

Ford credits being a one-stop shop–maintenance, repair and overhaul, turbine overhaul, avionics and aeromedical–in great part for the company’s success. “We’re pretty busy now on just about all fronts.”

The company is hiring, but Ford said he has filled part of the demand for skilled labor by converting contract workers to permanent full-time status.

Heli-Dyne: Ahead of Last Year

Heli-Dyne Systems has its facilities in Hurst, Texas, between Dallas and Fort Worth and in the center of the helicopter industry. In fact, the facility is located across the street from Bell Helicopter’s Plant No. 1.

“Last year was good for us, and we’re ahead of that pace,” said Jeff Range, the company’s director of worldwide sales and business development.

While the executive interiors business is moving at about the same tempo this year as last, said Range, “We’re providing more quotes than last year, most of them for energy companies.” The medical emergency response and law enforcement missions interiors business is growing faster than the corporate segment, he said.

Heli-Dyne recently expanded into facilities at nearby Meacham International Airport as part of a plan to add fixed-wing interior completion and refurbishment to its capabilities.

Now in the fixed-wing pipeline is a Cessna 208 Caravan outfitted for the California State Highway Patrol, the first of a six-airplane contract. “We’ve finished the airplane and are doing some research and development flight testing before starting on the rest of the fleet,” said Range. The new space is also prepared to take in overflow if business reaches that point.

Heli-Dyne is also a bidder to provide interior components for the new US-101 presidential helicopter program.

After a long dry spell, business is improving for the helicopter industry. More new helicopters are being sold and the demand for used helicopters is growing. Does that mean the interior completion and refurbishment industry is also doing well? “I think that’s a fair statement,” said Ford.