Helicopter Sector Finds Sustained Recovery

 - October 1, 2011, 9:55 PM

Even as other aviation segments struggled in the throes of a recession deeper and more enduring than anyone expected, the rotorcraft industry remained at least healthy. But is that going to last? If Heli-Expo 2011 in March was an indicator, the answer is “yes.”

The 2011 show was one of the more successful, with record attendee and exhibitor numbers, the announcement of multiple orders by helicopter manufacturers, and the unveiling of nearly a half-dozen new or upgraded models. After Bell Helicopter signed contracts for 41 helicopters at the show, senior v-p of commercial business Larry Roberts declared, “We can definitely start to feel a change in the [market] climate.”

Since then, there have been continued signs of growth in the helicopter industry.

At Bell Helicopter, second-quarter results were encouraging, with a $49 million increase in revenues and 39 deliveries–nine V-22s, eight H-1s and 22 commercial helicopters. That total was stronger than the 32 deliveries in last year’s second quarter.

In August, EADS announced that its Eurocopter business division recorded first-half revenues of $3.123 billion compared with $3.034 billion for the same period last year. And the trend upward in net orders continued in the first half of this year with net orders for 192 helicopters, compared with 140 for the same period a year ago. “The light helicopter and U.S. markets,” said the report, “are now in recovery.”

At Sikorsky, the news was also good for the first half of 2011, with 12-percent growth “propelled by expansion in the commercial market, mitigated by soft military revenues.”

In June Eurocopter revealed plans to move more aggressively in the offshore market, confirming plans for a complementary certification for the offshore oil-and-gas configuration of its EC175 by mid-2012. In August, Eurocopter announced the formal launch of its AS365/EC155 Dauphin replacement, targeting 2016 for entry into service.

Also in June, Bell was making ready to chase the search-and-rescue (SAR) market with certification of a SAR hoist for its 429 light twin. Bell is also believed to be investing in a new program called Magellan. To date, however, the only evidence is claims of a couple of internal Bell memos that make reference to such a program. The helicopter is widely believed to be an all-new medium twin replacement for the Bell 412 or a 412 upgrade. Magellan could also be a new name for the secretively named Project X.

Long-term Market Outlook

At Heli-Expo 2011, Honeywell and Rolls-Royce released their respective annual helicopter forecasts. Honeywell’s “Turbine-powered Civilian Helicopter Purchase Outlook Report” predicts 4,200 to 4,400 helicopter deliveries through 2014, a 5-percent increase over deliveries from 2006 through 2010. It further forecasts purchase plans for 2011 to remain subdued, but predicts that new aircraft orders in 2012 and 2013 will increase 40 percent over 2011 levels.

The Rolls-Royce forecast predicts approximately $34 billion in deliveries of civil and military helicopters through 2020.

The more recent “World Rotorcraft Overview” from The Teal Group predicts civil deliveries falling by 5 percent in 2011, while military rotorcraft deliveries will grow by 16.6 percent.

On the civil side, “things are not so good,” said analysis v-p Richard Aboulafia. “On the military side, things are just fantastic.

“In the next year,” he added, “I expect a market plateau, but it’s looking like a good, healthy plateau, with the big drivers being corporate, resource extraction and government.”

According to the report, “U.S. companies will continue to dominate the military side of the industry, with Boeing and Sikorsky maintaining long-running market domination. In the civil rotorcraft market, Eurocopter is poised to remain the leader,” said the report. It predicts AgustaWestland will alight in second place, thanks in part to “the very successful AW139 and the A109,” which is to be followed by the new AW169 and possibly the AW189. Recent acquisition of full custody of the AW609 program may also contribute to AgustaWestland growth.

As for Bell Helicopter, The Teal Group report points to renewed investment in the civil segment as starting to pay dividends, “after a few stumbles.”

The report concludes, “Assuming the developed world suffers from weak economic growth (but no double-dip recession) for another 12 months, we expect the civil market to recover starting in 2012 [and] a recovery to the 2008 civil market peak by 2015/2016.”