Helitech 2002 puts spotlight on São Paulo helicopters

 - May 8, 2008, 11:40 AM

The Brazilian city of São Paulo lies south of the equator, straddling the Tropic of Capricorn, and is about as far east as the southern tip of Greenland. It is the homely sister to its more famous neighbor, Rio de Janeiro, which lies about 330 nm to the east and is considered by many to be the most beautiful city in the world. According to a popular Brazilian saying, Rio is for leisure while São Paulo is for work.

With some 19.9 million people, the São Paulo metropolitan area is the most populous in South America and the fourth largest agglomeration in the world, behind Tokyo (35 million); New York (21.7 million); Seoul, South Korea (21.4); and Mexico City (20.9), according to City Population (www.citypopulation.de). It is a city of business and banking, industry and politics, and the primary repository of the wealth of the state of São Paulo, which generates about 45 percent of Brazil’s annual $1 trillion GNP. It is also a city of limited zoning regulations, thousands of high-rise buildings, 10,000 miles of streets, five million cars, nearly non-stop traffic congestion, visible extremes of wealth and poverty and inevitable crime.

All of these factors have led to three more distinctions, all related: São Paulo has one of the highest concentrations of helicopters of any city in the world (estimated at about 50 percent of Brazil’s nearly 900 rotorcraft); it has more elevated helipads, about 200, than any other city in the world (and another 50 or so ground helipads and heliports); and it is home to the only truly successful helicopter fractional operator in the world.

This popularity of rotary-wing aircraft motivated Brazilian exhibition organizer Certame to convince Spearhead Exhibitions of the UK, with which it has worked on an oil and gas show in Rio for about 20 years, that now was the time for a dedicated helicopter event in Brazil, and specifically in São Paulo. Spearhead organizes the biennial Helitech event in the UK, now held in Duxford, England.

After some persuasion by Certame, and several trips to São Paulo by Spearhead’s Helitech project manager Julia Cuthbert, the UK company agreed to create Helitech 2002 South America. “We really had only 13 months to organize the show after deciding to do it in late September last year,” Cuthbert told AIN in São Paulo, “but we pulled it off. We had more than 200 people signed up for the seminars, and we’re already signing up exhibitors for the follow-on event in 2004.”

About one-fifth the size of the British Helitech, the inaugural South American Helitech, held November 5 to 7, attracted about 75 exhibitors (90 percent non-Brazilian) and some 1,700 attendees to Campo de Marte Air Force Base on the northern side of São Paulo. The airport is also home to Helitech exhibitor HeliSolutions, the fractional helo operator; and Helibras, the Brazil- ian distributor and licensed assembler (at another location) of helicopters manufactured by Eurocopter, which did not exhibit.

A Solution to Helo Ownership

Started in December 1999 after three years of study, Heli-Solutions is run by president Allan Paiotti, a former systems analyst with a degree in genetic engineering. Experience gained with management consultants Booz Allen Hamilton, orchestrating the introduction of Office Max to Brazil, and other business ventures brought Paiotti into contact with the HeliSolutions partners. “Helicopters make sense in São Paulo because of the helipads, the traffic and concerns about safety and security,” Paiotti told AIN. “In this city, the use of helicopters by people who can afford it was already part of the culture before we started. By introducing fractional operations, we’re making helicopters affordable to more people. Our Robinson R44s have been a really big hit.”

HeliSolutions sells one-tenth shares in the four-seat R44 piston single for $48,000 (based on a purchase price of $480,000). “This is one-half the cost of a new Jeep Grand Cherokee in Brazil because of the 100-percent import tax on foreign cars,” he claimed. (The tax protects Brazil’s large home auto industry, which builds cars under license for a number of manufacturers.) One of HeliSolutions’ partners is Audi Helicopters, which distributes Robinson helicopters in Brazil. Paiotti estimated there are more than 300 two-seat R22 and four-seat R44 piston singles in the country. Professional pilots fly most of the helicopters in Brazil.

R44 shareowners pay a monthly management fee of R21,000, Paiotti said, which at the current dollar-to-real exchange rate equals about $5,900. (This particular exchange rate is highly significant to Brazil’s economy and particularly to aviation. In 1996 the dollar and real were nearly equal, which fueled an airplane- and helicopter-buying spree that lasted some four years. The present low value of the real to the dollar is one of the main factors why this year is expected to be one of the worst in a decade for new aircraft sales in Brazil.)

The HeliSolutions R44 owners also pay an hourly rate of R500 ($140) for both actual use and deadhead time. “This makes us different from the fractionals in the U.S., where owners are not billed directly for deadhead time. But, of course, the fractional operator attempts to include the cost of deadheading in the other rates,” Paiotti said. “Our shareowners pay the same hourly rate they would pay if they were to own the whole helicopter, which obviously includes deadhead time. So it makes sense, and they accept it.”

One of the reasons paying for deadhead time is not such a hard pill for HeliSolutions shareowners to swallow is that the average flight is so short. “During weekdays, when most flights are over the city, the average is only 11 minutes,” Paiotti explained. “On the weekends, it’s closer to 30 minutes because many flights are to the coast. The average use per shareholder is below seven hours a month, and we guarantee them 15 hours, so there’s plenty of cushion. If a shareowner needs more than 15 hours in a month, he can get it, depending on the needs of other shareowners, and he would pay the hourly rate.”

Paiotti declined to say how many shareowners HeliSolutions has or provide a breakdown of the fleet, citing shareowners’ desire for ano-nymity and security, as well as a confidentiality agreement with Swiss Re, a publicly traded insurance company that recently bought equity in HeliSolutions. “I will say we are number one in the world in number of helicopter fractional shareowners and that we have 12 or 13 helicopters.” Current types offered are the Robinson R44, the single-turbine Eurocopter EC 120 and AS 350B3 and the twin-turbine Bell 430. The aircraft are all painted and outfitted alike, sans HeliSolutions logo. “We like owners to think of the helicopter as theirs, not ours,” said Paiotti.

Oil and Military Prospects

Long before HeliSolutions entered the market and even before helicopters became popular in the skies over São Paulo, rotary-wing flight established a solid foot-hold
in Brazil’s oil industry, both on- and offshore. Today there are seven operators flying a mix of Sikorsky S-76s and S-61s, Bell 212s and 412s and Eurocopter BO105s,
AS 365 Dauphins and AS 332 Super Pumas. Many of these aircraft have logged more than 20,000 hr. Petrobras, the state-owned oil company, plans to begin a fleet-
renewal program next year, and the Sikorsky reps at Helitech were promoting the S-76C+ and S-92 for offshore work.

“The Brazilian military is also interested in the S-92, but there’s no formal program requirement at this time,” said Marcos de Souza Dantas, Sikorsky’s sales representative in Brazil. There is a bid for a heavy-lift helicopter, but this is for helicopters of the CH-53, Chinook and Mi-26 size. Brazil’s three services currently operate a varied mix of Sikorsky, Bell and Eurocopter helicopters.

Bell marketing director Eric Wasson said there are almost 280 Bell helicopters in the country, most of them JetRangers and LongRangers, but also about 40 Bell 407s, 13 Bell 430s, eight Bell 212/412s, 46 UH-1H Hueys and even some Bell 47s. He said São Paulo, with its 12 Bell 430s (five delivered last year), has the highest concentration of the model of any city in the world. The other Brazilian 430 is in Rio. “The years from 1996 to 1999 were good years for helicopter sales in Brazil and all over South America,” Wasson continued. “The exchange rate was good and there was political stability. This year will not be so good, mainly for the opposite reasons.”

Political stability is a concern now in Brazil. Elected president just before the opening of Helitech 2002 was Luiz Inacio Lula da Silva, the Workers Party candidate who espoused moderate policies during his campaign. But Brazilians are wary of political promises, and perhaps the best way to describe the current mood in the country is “optimistic uncertainty.” This has not helped aircraft sales, both airplanes and helicopters, because many buyers are holding off until president-elect Lula, as he is popularly known, takes office on January 1 and makes his real intentions known.

Two eastern European helicopter manufacturers who exhibited at Helitech felt uncertainty of another kind. Neither PZL-Swidnik of Poland nor Kazan of Russia has any helicopters operating in Brazil and judging from the comments of company representatives, they don’t expect to penetrate the market soon. They also expressed disappointment about the lack of viable contacts they had made at Helitech.

Also uncertain are certification and sales of Kazan’s Ansat, a 7,260-lb twin-turbine helicopter that has been slowly developing. Russian certification is now expected in 2004 and although the Russian military has ordered up to 100, according to earlier reports, how many, if any, of these are firm and when the first delivery will take place is unknown. Kazan marketing manager Almas Galimov could not shed any light on this subject. Kazan also manufactures the Mil Mi-8 and Mi-17 helicopters.

Heavy Lifters Take Aim

Somewhat more optimistic about the Brazilian market were a number of the North American exhibitors. Oregon heavy-lift rivals Columbia Helicopters of Portland and Erickson Air-Crane of Central Point were promoting their experience in the region. Jon Lazzaretti, Columbia vice president of marketing, said his company has one Boeing 234 working in Ecuador supporting onshore oil exploration since 1997 and has previously had 234s in Peru doing the same work. The sling work involves 200-ft-long lines and oil rig parts weighing up to 25,000 lb. Columbia was also marketing its maintenance overhaul services.

Erickson Air-Crane owns and operates a fleet of 18 Erickson S-64 Aircranes, and has held the type certificate for the helicopter Sikorsky called the Skycrane since 1992. It, too, is operating a helicopter in Ecuador in support of oil operations in the jungles on the east side of the Andes Mountains. “This is our first time attempting to market the Aircrane in Brazil,” explained Manual Durazo, general manager of Latin America, who added that the Aircrane’s maximum lift is also about 25,000 lb.

During the last 10 years, the company has found extensive work in many parts of the world using its Aircranes for wildland fire suppression, flying more than 3,000 hr in this capacity last year alone. This year, besides operations in the U.S., it has had seven aircraft operating in Italy, two in Greece and one in Australia. Just recently it sold a remanufactured, zero-time S-64 to the government of Korea’s forest service. One possible use in Brazil for Aircranes is transport of portable radar units in the Amazon basin as part of a government program to control illegal logging and drug operations in the area.

Mike Druet, vice president of marketing and sales for Acro Aerospace of British Columbia, said his company was making a concerted effort to become established in the Brazilian marketplace. “I was here last month and was really impressed with the size and sophistication of the market. It’s incredible,” he told AIN. Acro Aerospace overhauls and repairs helicopter engines, components and accessories, and it reports having more than 1,000 customers in 56 countries. It has FAA and JAA approval and authorizations for Bell, Eurocopter AS 350/355, Sikorsky S-76 and S-61 helicopters and GE CT58, Pratt & Whitney Canada Twin Pac, Rolls-Royce 250 and Turbomeca Arriel 1 series engines. Druet said Acro expects to double its business next year.

Pre-owned turbine helicopter salesmen Ed Eckhart and Bruce Kantenwein, respectively the owner and vice president of Eckhart HelicopterSales, Libertyville, Ill., had two helicopters (a Bell 407 and an AS 350B) for sale at Helitech through their Brazilian contact, Airsoft of São Paulo. “In the last five years we’ve seen a lot of growth in Brazil,” Eckhart said, “but it was slowing down before 9/11, and after 9/11 it came to a screeching halt. There are about 400 Bell JetRangers on the used market right now, and they are moving very slowly.” On the other hand, he said there is not a significant excess of twin-engine helicopters, with a lot of well established operators, such as hospitals and corporate operators, continuing business as usual. Eckhart said that at any given time his company has four or five helicopters of its own for sale, but has another 75 or so available through its contacts around the world.

Kantenwein suggested that the Helitech organizers could have done a better job promoting the event locally. “We knew all about it in the U.S., but we had to tell Airsoft, our contact here, that we thought it would be a good idea to exhibit. Then they kept asking us when it was going to be.” But Helitech did generate some leads for Eckhart. “We had some interest in an EC 365 from a buyer in Guatemala. That was a pleasant surprise,” said Kantenwein.

Also hoping to break into the Brazilian market was exhibitor SAS Flight Academy of Stockholm, Sweden, which was promoting its night-vision-goggle-capable Bell 412/212 simulator. The company already has a contract to train Argentinean air force pilots in the JAA-approved simulator, the only helicopter simulator the company has at its training center at Stockholm-Arlanda Airport, and has trained other customers from Europe and South America. However, explained sales manager Peter Robertsson, the company has no U.S. customers because the simulator has not been approved by the FAA.

Helitech 2003 will be held September 23 to 25 at Duxford, near Cambridge, UK; Helitech Latin America 2004, to be held again in São Paulo, is planned for September 21 to 23; and Helitech 2004 Dubai, the first Helitech in the Middle East, will be held December 6 to 9.