Used Helo Market Better than Bizjets, but Still Weak

 - September 8, 2009, 11:46 AM

Market conditions for pre-owned rotorcraft are “below normal levels and falling,” according to a monthly rotorcraft survey published last week by UBS Investment Research. The firm’s latest rotorcraft composite index, which measures overall business conditions, came in at 40, some 5 percent higher than UBS’s previous survey but still 10 points below conditions that would show expansion. While that index rose, UBS’s overall business conditions score for helicopters dropped 15 percent, to 3.6. On a scale of zero to 10, five signifies normal conditions. Pre-owned helicopter transaction prices are roughly 20 to 30 percent lower from the peak, according to UBS aerospace analyst David Strauss. “While our helicopter survey clearly indicates a deteriorating market on the back of corporate and oil and gas weakness, it continues to come through above our similar survey of the business jet market,” Strauss wrote. “We attribute the relative strength to diversified helicopter end-markets that include relatively stable medical/law enforcement. Like bizjets, helo customer interest appears to be stabilizing, although financing remains weak.” On a brighter note, the survey score for the 12-month helicopter outlook surged from 42 in February to 68 last month, “signaling…that the market is near bottom.”