HAI’s Resavage finds hope as helicopter firms hang in there

 - January 15, 2008, 5:14 AM

In 1965, Indonesian president Sukarno characterized the tumultuous (he was overthrown) political period to come as “The Year of Living Dangerously,” the title of his annual state-of-the-nation address.

To reduce to its essence a recent interview with HAI president Roy Resavage, one might characterize the 12 months since the last HAI Heli-Expo as “The Year in Which Survival Was Its Own Form of Victory.”

“The commercial helicopter industry has always had a reputation for flexibility, resilience and the ability to recover from staggering blows,” the 57-year-old association administrator, now marking his sixth year as HAI chief, told AIN recently. “Since 9/11 it’s had to show all of those.

“Those nightmare days weren’t all that long ago; so much has happened since,” Resavage recalled. “In those first few months we weren’t really sure how many of our members had gone under and how many were making it. When you go out of business your first thoughts aren’t to issue a press release and notify the trade groups to which you’d belonged that you won’t be showing up at the convention this year. Last year we were pretty well astounded at the turnout in Orlando, Florida.”

Just weeks before this year’s edition of Heli-Expo, Resavage was metaphorically peeking through the stage curtain in an attempt to gauge the size of the audience in the minutes before showtime. He liked what he saw. “Sure, there were many operators that a combination of the Class B airspace restrictions and rising insurance costs had driven out of business. Our membership rolls took a modest hit, not only because of business failures or hard times, but consolidation among operators.

“I’ve spent a lot of time in the field this year, talking to both the manufacturers and the operators, trying to find out what they need,” he continued. “One theme that kept coming back to me was resilience. Face it, aviation is by nature a cyclical business; everyone who’s spent at least half a decade in it has seen at least a portion of that cycle. The trick to survival is the ability to weather those cycles.

A Cyclical Business

“Judging by both the preliminary sign-ups and our overall enrollments over the past,” Resavage said, “we’ve weathered much of the storm. New and used helicopter sales are up slightly. I don’t like to point to this or that Heli-Expo show and compare attendance figures or the total number of vendors on hand. Those aren’t really reliable indices for measuring the performance–the sales value, if you will–of a show. Vendors don’t really want a lot of browsers in their booths; they’re looking for buyers, and the two aren’t necessarily the same.

“But when I look at the results from last year’s Heli-Expo show in Orlando, coming as it did so soon after 9/11, when a lot of the restricted Class B airspace was just starting to open up, and I reflect on attendance as well as the positive feedback we had both from the membership and from the vendors right after that show, I just can’t help being encouraged. Survival has been the primary form of success for the past 18 months.”

Today’s commercial helicopter market has fragmented to the point where it’s possible to excel in just one corner and still survive. For years, Eurocopter’s BK 117 was the niche machine for the aeromedical market. It became so accepted that no administrator had to explain why he had selected a BK 117, but another administrator making a different decision would be asked why. Gradually the BK 117 was supplanted in that role by the Eurocopter EC 135.

This niche domination offers manufacturers the kind of compartmentalized protection built into modern ships: lose one or two watertight compartments and the vessel stays afloat; more than that and disaster looms.

“There are some bright spots among the various helicopter markets,” said Resavage. “Offshore oil, especially the Gulf of Mexico, which has been in a death spiral for years, seems to have woken up. What I mean by ‘death spiral’ is that the oil companies weren’t paying the helicopter operators what the service was worth, so the operators were making do with older and older equipment. Now that drilling and production is taking place in deep water hundreds of miles offshore, the oil companies have woken up to how much they need dependable helicopter service, and they’re willing to pay for it. Serving those deepwater rigs via boat alone takes too long, 10 or 15 knots for a 400-mile round trip…You do the math. It’s a long trip, desperate stuff in a storm. Then there’s the requirement that rig crews must be evacuated quickly in the face of oncoming foul weather, an impossible mission for boats. Helicopters are the only answer. Offshore is the original utility helicopter market fit.”

Not surprisingly, the post-9/11 environment has smoothed the way for procurement of some long-deferred law-enforcement helicopters. “We’re seeing a sales segment that’s come alive in a market that’s an easy sell to today’s public consciousness,” reported Resavage. “Police are finally getting a lot of the equipment they’ve been asking for unsuccessfully for years.”

Speaking of projects that have been many years in the making, the Bell/Boeing and Bell/Agusta Aerospace tiltrotor transports are undergoing much of their research, testing and evaluation at Bell Helicopter’s Arlington, Texas test site not far from the downtown Dallas convention center, where HAI’s Heli-Expo annual trade show takes off this month.

Resavage is bullish on the tiltrotor, at the same time conceding that the technology has had a long, hard road just to get where it is so far. “The problems of the V-22 Osprey don’t really translate over to the BA609,” he explained. “The basic technology of the 609 is a lot simpler, and the mission for which it was designed is a lot less demanding. The V-22 is much more complex and demanding. The Marines want their tiltrotor to fold its blades, rotate and stow its wing and convert itself into a compact package, all automatically and within about 90 seconds. The 609 has no such requirement and is therefore that much cheaper and less complex. It’s not Buck Rogers stuff; the 609’s technology has been flying and flying well on the XV-15 testbed aircraft since the 1970s.

“Those aircraft and all the other new helicopters–the [Bell/Agusta] AB139, Sikorsky S-92, the new Eurocopters–are all being produced by the manufacturers in a way that offers the operators more value. More value means increased capability, which more often than not means the use of advanced technology. And that’s a difficult balancing act because new technology costs money, lots of money. These manufacturers know their products have to include at least some of this advanced technology but they also know that the rank-and-file operators can’t afford it. And that’s where things stand today.”