Bell Helicopter is seeing a slow but meaningful sales rebound in Latin America, according to Jay Ortiz, vice president of Latin American sales for the company. “If you look at the entire product line, by April of 2017 we basically matched all the orders we had in 2016,” Ortiz said. “In 2017 we are starting to see a bit of recovery. Some of the programs where seeds were planted two years ago are starting to yield. Right now things are moving, just not as fast as we would like.”
Given the state of the overall economy in the region, Ortiz is pleased with Bell's progress. “Volume is down but we are capturing the majority of deals that are out there. We continue to work programs realizing that some of these deals may take a year or two for the funding to materialize because of the state of economies and the political uncertainties in some countries,” he said.
Ortiz said there's an overall uptick in both parapublic and corporate activity. On the parapublic side, “That is driven by natural disasters and law enforcement and EMS requirements. You know how governments work: Two years ago this was a problem and today it is a crisis. So that generates movement. Because we have been working with our customer base in the region and hanging in with them during the tough times, they have responded pretty well. As the problems are acute and they are starting to move, we are well-positioned” to meet the demand, he said. Recent opportunities in that sector include fire suppression, EMS, and drug enforcement. Ortiz noted the sale of 15 Bell 407s to Mexico two years ago to aid with drug eradication and said there was an opportunity to expand sales there “along those lines.” He also said that Colombia's shift off a war footing to law enforcement drove localities there to select the 407 for that mission there. In Puerto Rico, Bell worked with the government of that economically distressed territory to return its law enforcement helicopters to airworthy standards and to deliver a new EMS helicopter. This June, Bell received a U.S. foreign military sales (FMS) contract for four new 412 medium helicopters for the Argentine Air Force.
Many government sales into the region take the form of multi-mission helicopters. This is particularly true of the Bell 429 light twin, Ortiz said. “We sell the 429 with multi-mission capability. We will sell it as a corporate aircraft for a governor of a province, but it will also go down with litters and loose EMS equipment so that, when needed, it can be configured for EMS. State agencies typically buy them in a multi-mission capacity.”
Private customers are also coming back. “We're seeing an uptick on the corporate side as well,” Ortiz said. “Each individual had their reasons for not moving forward a year or two years ago and as that cloud of uncertainty lifts they are moving forward. In my opinion there is still a great deal of pent up demand, based on business, the demand is there, and as the uncertainty eliminates itself in a particular market or with a particular customer, they move forward and purchase.”
Latin America has been a particularly bright spot for the new Bell 505 Jet Ranger X light single. “We've had a tremendous level of success with the 505. Latin America is second only to China on 505 orders. The only reason we were second is that the Bell representative in China placed a huge spec order. We had an excess of seventy 505 orders in the region and we are getting ready to deliver our first one into Central America. The aircraft thus far has acquitted itself pretty well with customers who have come up [to Canada or Texas] and flown the demonstrator.” While the 505 will eventually have law enforcement and EMS kits, Ortiz said it is too soon to gauge its popularity in those roles in the region. He said, so far, orders had come from private pilots, tour operators, and utility operators.
The potential for Bell's still under-development 525 super-medium twin in the region is uncertain given the decline in demand for offshore oil exploration and the restructuring of the largest energy player in the region, Brazil's Petrobras. However, once the 525 is certified next year, Ortiz thinks it will be an attractive platform for offshore energy and parapublic missions, including search and rescue. “We have engaged with Petrobras on the 525 in the last several years,” he said. “We've had them fly the simulator and had them out to the plant in Amarillo to look at the aircraft and the assembly line. They are pleased with the progress on the program. The feedback they've given us is that they love the aircraft, they love the flexibility and the diversity that it will provide the fleet. It is a just a matter of time. They've had to push some of their [exploration] projects back, and that aligns with our certification of the aircraft. So hopefully by the time they clear up their issues, we'll be in a good spot. They've reduced their contracts and their number of aircraft flying on contracts have gone down. So they have to make some decisions on the future.” Ortiz thinks parapublic SAR [search and rescue] customers for the 525 will materialize, but “usually customers in that market space want to fly the aircraft first and see its capabilities.”
Ortiz said that Bell (Booth 5106) is beefing up its service capabilities in the region and plans to add authorized service centers in Argentina, Ecuador, and Peru in the near future. However, he said most existing Bell sales reps in the region are already authorized service centers and have a natural vested interest in keeping customers in Bell aircraft by providing the maintenance. He also said that Bell has had good success enrolling new aircraft sold into the region into Bell's Customer Advantage Plans (CAP) maintenance agreements.
Ortiz stressed that Latin America's economy remains commodity based and as such it lags economic growth in North America and China. “We lag behind in terms of timing, but when the [economic] boom hits, it hits pretty fast in the region. I think we are heading in that direction,” he said.