Heli-Expo ’08

 - April 1, 2008, 7:22 AM

It wasn’t just the great Texas barbeque that put smiles on the faces of Heli-Expo visitors. A hot market for helicopters ensured that the show’s first trip to Houston would go down a record-setter.

In a sign of just how superheated the world market for civil helicopters has become, February’s Heli-Expo trade show in Houston broke all-time records for attendance, exhibitors and sales announcements as 523 companies set up temporary residence inside the cavernous George R. Brown Convention Center. But lurking behind the positive numbers and upbeat moods was a serious concern: in an industry where people have always seemed content just to eke out a living, perhaps times are too good.

“The truth is that all manufacturers right now are behind in meeting demand,” lamented Bell Helicopter president and CEO Richard Millman. For the first time ever, he noted, civil and military helicopter markets are exploding simultaneously, but “unfortunately, the helicopter supply base–sans the engine companies–has not been investing for growth over the last few years, and it is just now starting to make these much-needed investments.”

The investments are critical, Millman said, because an estimated 25,000 older helicopters will need to be replaced in the next decade. The stepped-up need for new helicopters will come even as manufacturers struggle to meet current demand. Order backlogs in some cases stretch beyond five years. Bell, for example, has orders for more than 270 copies of its new Model 429, pushing the backlog into 2014. That’s a tough predicament for eager buyers and anxious producers alike.

Still, the mood throughout the three-day show was energetic bordering on frenzied as 17,373 rotorcraft aficionados arrived in Houston, where a record 63 helicopters roosted among packed exhibits occupying around 600,000 sq ft of space. The most telling figures reported at Heli-Expo’08 came from helicopter manufacturers themselves, who announced nearly $2 billion worth of orders at the show, with Eurocopter alone accounting for about half of the total.

While Sikorsky made the biggest splash at Heli-Expo’08 by bringing its sleek X2 technology demonstrator to Houston, the real star of the show was Eurocopter’s EC 175, a 16-passenger medium twin intended to go toe to toe with AgustaWestland’s hot-selling AW139. Eurocopter unveiled a full-scale mockup of the helicopter on the show’s opening day on February 24, pulling down an enormous black curtain to reveal the silver-hued EC 175 and a full load of passengers dressed as offshore oil workers.

Almost as soon as the introduction ceremony was over, the e-mails from Eurocopter press officials announcing EC 175 sales began popping up on journalists’ computer screens. Bristow Group, the U.S.’s biggest oil and gas helicopter support operator, and Canadian firm VIH had inked the first deals for EC 175s. Later in the day Russian operator UTAir placed an order for 15 EC 175s plus 15 options. Then on the show’s second day–in the span of less than an hour–Eurocopter announced orders from Era Helicopters, Dancopter and Vectra Global for more than 30 EC 175s in all.

More e-mails blinked on the screen throughout the day: Halvorson Group had signed for five EC 175s and added five options. French operator Heli-Union, HNZ of New Zealand and Pegaso in Mexico all added to the total. Then came this e-mail from a Eurocopter executive: “Literally, just announced: Papillon signs on for 10 (an order for five plus options on five) EC 175s. Order/option total for EC 175s: 98.”

By the time the dust settled, Eurocopter had booked orders and options for a total of 111 EC 175s at the show. Based on the low end of reported pricing, the total value of these sales easily topped the $750 million mark. Counting deals for other Eurocopter models, the manufacturer announced orders and options for well over 200 helicopters during the three-day show, vaulting its share of the Heli-Expo sales bonanza to more than $1 billion.

Other manufacturers tallied significant deals as well. Agusta-Westland announced sales agreements for 76 helicopters worth about $470 million. Broken down by model, the list included 30 A109 Grands, 18 AW139s, 14 A119Ke helicopters and 14 A109 Powers. MD Helicopters announced firm orders for five MD 902s for a California hospital. With options, the deal would call for a delivery total of 10 MD 902s in the next seven years. The estimated value of the firm-order contract was about $22 million. While Sikorsky didn’t provide an official sales tally at Heli-Expo, it announced the combined sale of 16 S-92s and four S-76C++s, worth an estimated $317 million, to PHI, Evergreen and VIH. Bell said it sold six 407s and two 429s to various operators and a Huey II to the Rio de Janeiro Civil Police.

Intensifying Demand
If folks in the rotorcraft industry think times are good now, they might want to brace themselves for what could well be an unprecedented market boom in the next several years. Annual market forecasts from Honeywell and Rolls-Royce released at the show predict helicopter demand will intensify in the next five years before cooling somewhat around 2014. The trend will only put more pressure on manufacturers and suppliers to boost production, forecasters said.

Honeywell’s five-year forecast, which covers only the civil market, predicted deliveries of 4,450 helicopters worldwide through 2012, while Rolls-Royce’s 10-year outlook projected deliveries of 15,711 civil and military helicopters worth $154 billion through 2017. Rolls-Royce broke out the civil component of this total, predicting deliveries of 9,095 helicopters with a combined engine/ airframe value of $35.7 billion.

The Honeywell forecast predicted civil turbine unit deliveries in excess of 800 this year alone. It also noted that civil helicopter deliveries were up 25 to 30 percent from 2006 to 2007 and predicted this sector will increase by 50 percent for the five-year period from 2008 to 2012 compared with sales from 2003 to 2007. Within the North American civil sector, Honeywell broke out current sector demand as 20 percent law enforcement, 20 percent corporate, 23 percent utility and 26 percent EMS. Honeywell said North America will represent 40 percent of the worldwide demand for new helicopters and 80 percent of all purchases comprising replacement of existing equipment with like-class models.

Both forecasts continued to predict significant growth in the single-engine market triggered by the expected introduction of new, lower-priced entrants such as the Robinson R66. “The gains seen in the 2008 outlook are also supported by potential new OEM entrants offering affordable, high-value platforms stimulating demand and drawing new operators into the turbine segment,” noted Mike Cuff, Honeywell vice president for helicopters and surface systems. Honeywell predicted that 58 percent of all new purchases will be singles in North America and 47 percent worldwide. Globally, demand for new light singles is down 10 to 11 percent compared with the last three years, while demand for twins is up 12 percent.

Rolls-Royce valued the overall 10-year demand for civil light-medium twins at $20.5 billion, or 65 percent of the market. Echoing the concerns voiced by Bell’s Millman, Rolls-Royce helicopter engines acting president Ken Roberts said the projections of deliveries for the next 10 years “show an industry operating at levels approaching capacity.”

Sikorsky’s Surprise

Capacity issues aside, Sikorsky clearly had its vision fixed on the future. Looking a bit like one of the robot aliens from last summer’s blockbuster movie Transformers, Sikorsky’s X2 technology demonstrator wowed the throngs of attendees who elbowed in to get a closer look at the sleek two-pilot ship, revealed on the show’s opening day and featuring contra-rotating coaxial main rotors and a six-blade “aero propeller” in place of the tail rotor.

Sikorsky president Jeffrey Pino said the novel helicopter had logged about 20 hours in ground runs before Heli-Expo, and it would have likely made its first flight by the time of the show had Sikorsky not brought the X2 to Houston. “The aircraft will fly when it’s ready,” he said, noting that safety is paramount in the decision of first-flight timing and pointing out that the X2 will neither be certified nor produced since it is merely a technology demonstrator. “This could be a game changer in the industry,” he said at the X2’s official unveiling. “We are diligently pursuing this as a research project. We are testing the limits and pioneering this exciting innovation.”

According to Sikorsky, the X2 is intended to show that a production helicopter can indeed far exceed 160 knots in forward speed, an oft-cited barrier that has prevented rotorcraft from transporting passengers at speeds matching those of airplanes. In fact, the top speed of the X2 is expected to be between 250 and 265 knots in cruise (about the same as the Bell/Agusta BA609 tiltrotor), while still retaining “desirable helicopter attributes, including excellent low-speed handling, efficient hovering and autorotation safety and a seamless and simple transition to high speed,” Pino said.

The X2 demonstrator incorporates a number of technologies to help achieve this goal, including a fly-by-wire system developed at Sikorsky’s flight research center in West Palm Beach, Fla., hub drag reduction and active vibration control. A 1,450-shp Light Helicopter Turbine Engine Co. T800-LHT-801 engine, developed by Rolls-Royce in partnership with Honeywell, powers the X2.

But the key technology allowing the X2 to reach 265 knots, Pino said, is an automatic rotor-control system that keeps the composite main blades from exceeding the speed of sound, which Sikorsky says could cause the blades to shatter from supersonic airflow vibrations. When flying faster than 210 knots, the X2 will automatically slow its main rotors and shift power to the aft propeller. By the time the X2 reaches 265 knots, the main rotors will be moving at “80 percent of the original rotor speed, with the retreating blade in 80-percent reverse flow,” Pino said. Meanwhile, the power transferred aft provides 900 shp to the aero propeller, “just as much as a Pilatus PC-12,” he said.

Scalable Technology
Sikorsky first announced the X2 initiative in June 2005 and built the aircraft as a rapid prototyping collaborative effort with subsidiary Schweizer Aircraft. The project is funded solely by Sikorsky. Pino would not disclose how much the company has spent to get this far, but added that it is “probably a third of what people are thinking,” mainly due to the rapid prototyping and the thriftiness of the Schweizer team.

Just when the X2 will lead to a certifiable product is anyone’s guess, and even Pino said he isn’t quite sure himself. “We’re going to test the X2 to make sure the technology works, then we’ll start thinking about how to incorporate it into a production model,” he said. But that doesn’t mean Sikorsky isn’t already thinking about what such a production helicopter might be. “I’d like to see it in a Super Puma-sized 15- to 19-seat helicopter,” he said, adding that the technology is scalable and could be used in a machine weighing as much as 240,000 pounds.

Since the Eurocopter EC 175 and Sikorsky X2 were announced well before Heli-Expo’08, Schweizer’s Model 434 gained the distinction of being the only new helicopter announced at the show. The first clean-sheet civil product from the Elmira, N.Y.-based manufacturer since Sikorsky bought the company in 2004, the 434 is a single-turbine helicopter intended primarily for flight training, law enforcement and light utility missions. It retains the shape of the 333 turbine single but adds the four-blade main rotor from the Schweizer Fire Scout UAV as well as more power and a bigger, 84-gallon fuel tank.

News of the 434 attracted attention, but what everybody really wanted to hear more about was Robinson’s first turbine-powered product, the R66. A white prototype is now flying once or twice a week at Torrance Airport in California in preparation for FAA certification. Robinson is building two more flight-test R66s and one for static ground testing.

Frank Robinson, company president and CEO, said at a press conference that the R66 performs much like the R44, with similar range (the R66 will carry more fuel but will burn more, too). The R66 should have much better hover performance with the greater power output available from the turbine engine, said Robinson, who has piloted the prototype. “It flies similar to an R44, with a few minor procedural changes,” he noted.

The flight-test R66 is powered by a preproduction version of Rolls-Royce’s new RR300 engine. “It is close to what will be final,” Robinson said. (Earlier flight tests were conducted using a Rolls-Royce 250 engine.) The biggest difference between the 250 and 300 engines is the change to a centrifugal compressor, eliminating the many small blades and complexity of the 250’s axial compressor. The RR300 installation in the R66 should be much easier for technicians to access, Robinson said, making it simpler to maintain.

Sticking by what has become a familiar line, Robinson still wouldn’t commit to a firm price for the R66, saying only that it will cost more than a piston-powered R44 but less than a Bell 206B3 JetRanger III. After hearing the news that Bell will halt production of the 206B, Robinson said he welcomes the move. “The JetRanger is a good helicopter,” he said, “but there are many JetRangers in operation and many of them are getting old. Just replacing all those JetRangers will be a good enough market to justify designing the R66.”

HAI Turns 60

This year’s show marked HAI’s 60th anniversary and the first time Heli-Expo has been held in Houston. The association usually rotates the show among Las Vegas, Dallas and Anaheim, Calif., but because Heli-Expo has outgrown its allotted space in Las Vegas organizers have been forced to consider other locations. Cities under consideration for future Heli-Expos are Atlanta, Nashville and San Diego. Tentatively, HAI plans a return to Houston in the next five years and hopes to get back to Las Vegas as soon as possible.