Latin American Helicopter Market En Fuego
The Latin American market in general, and Brazil in particular, continue to be red-hot markets for rotorcraft manufacturers, driven by government sales and the expansion of the regional offshore energy market, especially in Mexico and Brazil. Altogether, the market represents 9.8 percent of global demand–but that number is increasing fast.
A spokesman for AgustaWestland said that company’s embedded fleet throughout the region has grown to 325 helicopters with the bulk of the growth coming from Brazil. Ten years ago, the manufacturer had 25 helicopters in the country; today it has more than 200, with large future orders pending, including 50 Grand and GrandNew variants of the AW109 to service the local VIP/corporate market.
AgustaWestland (Outdoor Exhibit 5108) also has received orders for its new AW169 and AW189 twins and notes that since 2007 it has sold 30 AW139s into the country, mainly to service the offshore energy market and Petrobras, the partially state-owned oil company. Twenty AW169s are on order for the Brazilian corporate market and Petrobras has issued tenders that AgustaWestland believes will result in the sale of more AW139 and AW189 aircraft to Brazil.
The company notes that Chile and Peru are other strong markets in the region, and said it has partnered with Aviasur as a distributor and service provider in those countries. Aviasur opened a new AgustaWestland service center in 2012 at Santiago’s Arturo Merino Benítez International Airport. Currently, 20 AgustaWestland helicopters operate in Chile including the AW119, AW119Kx, AW109 Power, Grand, GrandNew and W-3A Sokol.
The manufacturer plans to step up services to the region, mainly by expanding its AgustaWestland Do Brasil subsidiary. “It’s part of our customer-focused strategy to expand the company’s presence in-country, to get closer to the customers, and to deliver the customized services required to ensure maximum aircraft availability,” said the spokesman. “This expansion is necessary to support the needs of operators throughout not only Brazil, but Chile, Argentina and Colombia.”
Later this year, AgustaWestland Do Brasil will become a satellite of the AgustaWestland training academy in Sesto Calende, Italy, and will begin to offer pilot ground-school courses. Plans also are in the works to increase the stock of parts, including main rotor blades, to enhance local MRO capabilities. “A major, permanent stock of spare parts is present at AgustaWestland Do Brasil to effectively support all the helicopters in the area. The stock will be further reinforced in the future to sustain the growth of the local fleet,” the spokesman said, noting that, “Our fleet operations centers in Italy, Philadelphia [U.S.] and the UK are available to support the needs of operators in South America, but spare parts deliveries are available 24/7 directly from AgustaWestland Do Brasil.”
Bell’s Upward Curve
Bell Helicopter (Outdoor Exhibit 5110) also sees demand picking up in the region. Jay Ortiz, Bell’s executive director for sales and marketing in Latin American, said the region represented the company’s second highest sales volume and highest revenue, accounting for 18 to 20 percent of Bell’s overall sales in 2013 with 37 helicopters delivered. Ortiz said Bell’s share of the market was 37 percent and 41 percent in regions where it had competitive products.
Ortiz also said success in the region relies on building and enhancing relationships with family-owned businesses, many of which provide both sales and service. He pointed to existing partnerships that Bell has with a variety of companies in the region, including Líder (Brazil), Eagle Copter (Chile), Aevicentro (Colombia), Servicio Tecnico Aereo de Mexico-STAM (Mexico) and Ecolift (Puerto Rico) as examples of successful partnerships.
“Family is important and relationships are extremely important,” Ortiz said. “In many cases our local dealers also own authorized Bell service centers that for the most part handle the customer from cradle to grave. It’s been a tremendously successful formula for us.”
Ortiz said demand for Bell products is split almost evenly among corporate, government and energy clients, with the light twin 429–and its wheeled landing gear (WLG) variant–scoring new orders in Argentina, Brazil and Chile. And the customers are not always patient, Ortiz noted. One Chilean customer could not wait for his 429 from the factory, so he bought one from an owner in California. Many 429 customers in the region are upgrading from 407 singles, he said, adding that the 429 has been particularly popular with parapublic customers on the state level.
“Governments continue to be a strong customer,” he said, with sales of legacy products such as the 412 and Huey II. Ortiz also said militaries throughout the region have expressed interest in Bell’s new 505 light single, expected to be certified in 2015, as a primary trainer. “As part of their orders for 412s and 429s, several military programs have requested offsets that include two or three 505s that they plan to use for flight training,” he said.
Ortiz agrees that the expansion of deepwater offshore energy drilling is the big casino for OEMs selling into Latin America. Ortiz said that Mexico’s pending energy reform legislation, in particular, could be a big driver for new deepwater exploration in the southern Gulf of Mexico. (In mid-July the Mexican Senate approved key bills that would strip state-owned oil company Pemex of its long-standing monopoly, a move that is expected to bring new energy exploration investment to the area, increase the number of offshore rigs and the number of helicopters required to service them.)
Mexican energy reform and the continuing development of the Pre-Salt offshore deposits in Brazilian waters should draw orders for Bell’s new 525 super-medium twin, scheduled to hit the market in early 2016. “We expect Petrobras to welcome the 525 with open arms,” Ortiz said. Aside from Brazil and Mexico, Ortiz noted that the energy exploration markets were picking up in Colombia, Trinidad and Venezuela, albeit on a smaller scale.
According to Ortiz, Bell plans to increase its footprint in the region to accommodate growing demand, but that many of the details remain to be determined. “We will be increasing our presence in the region. It is too important to try to do everything from [Bell headquarters] in Fort Worth [Texas]. We’re hiring more sales people and independent representatives in the region, including in countries where we are not currently represented.”
Ortiz did not rule out setting up assembly and/or manufacturing facilities in the region. “The bigger our presence, the more it enhances my position when we go talk to government agencies [for sales],” he said. He also pointed out that the 429 cabin already is built in the region, at Bell’s plant in Chihuahua, Mexico.
Airbus Helicopters planted its flag in the region early, establishing its Helibras subsidiary in Brazil and building helicopters there since 1978. François Arnaud, Helibras vice president of marketing and commercial, noted that the city of São Paulo has the largest urban helicopter environment in the world–725 helicopters and 260 helidecks. “It’s ahead of even Tokyo and New York and it will keep growing in the next years,” he said. Helibras (Outdoor Exhibit 5104) currently claims 47 percent of the Brazilian turbine market and sold 30 new aircraft there in 2013. Throughout Latin America, more than 1,300 Airbus helicopters are in service, accounting for 35 percent of the region’s fleet. Last year sales to the region represented 13 percent of Airbus Helicopters’ total bookings.
Military bookings in the region continue to bear fruit for the company too. Recent sales include the supply of 50 EC725 to Brazilian armed forces; 15 EC725 to the Mexican armed forces, seven AS350/550 to Ecuador and six Super Puma AS332 C1es to Bolivia.
Arnaud said Helibras currently manufactures at its Brazil facilities helicopters for the region that will have up to 50 percent local content by 2017. He pointed to Helibras’s contract to build the 50 EC725s for the Brazilian Air Force, the military variant of the EC225 heavy twin, as a major driver for increasing the company’s presence and capabilities, noting that more than $430 million has been invested to support that contract both in terms of physical plant and personnel. Arnaud said the EC725 line could also be used to manufacture EC225s for the offshore energy market.
Helibras (Outdoor Exhibit 5104) currently manufactures the AS350 in Brazil and maintains a modern engineering center there. It has developed a local supply chain with more than 40 partners. It currently has the capacity to manufacture 36 helicopters per year locally.
The company has embarked on several new initiatives to improve local product support, according to Flávio Pires, company vice president of support and services. “In 2013 we inaugurated a client support center in the city of Atibaia. The center manages all customer AOG, maintenance, parts, technical and warranty requests. It is manned by a staff of 25 and is colocated with our logistics center and part depot,” he said. Helibras is working with Brazilian customs officials to streamline the shipment of parts.
Pires said that Helibras is also working to expand its network of authorized service centers throughout the region. “We want to be able to offer operators in remote areas the same quality of maintenance and repairs [performed by] people who receive the same training as our factory technicians in Itajubá and São Paulo,” he said.
Last year Helibras created a new training and flight simulator center for pilots and technicians on the EC725/EC225 in Rio de Janeiro. The company has previously established a center for all it models at Itajubá.
Airbus Helicopters’ Long History in the Region
Airbus Helicopters has been present in Latin American for more than 40 years and now has a network of three subsidiaries that cover the region: Airbus Helicopters Mexico (serving 25 countries in Central America, the Caribbean, Colombia, Ecuador and Venezuela); Helibras in Brazil, also serving Paraguay; and Airbus Helicopters in Chile (serving the continent’s south cone: Chile, Argentina, Peru, Bolivia and Uruguay). Airbus Helicopters Group employs 1,200 people throughout the region, a number that has doubled in the past four years.
Airbus Helicopters’ Latin American subsidiaries are responsible for training, sales and customization of new and used helicopters, commercial support, spare parts distribution and maintenance of the Eurocopter fleet in South America. Helibras’s engineering center is gearing up to design, develop and produce a 100-percent Brazilian helicopter by the mid-2020s.
Support, services and training continue to be major focal points for Airbus Helicopters. In addition to the extensive subsidiary network, the company has set up certified maintenance centers in Guatemala, Panama and Peru. Airbus Helicopters Mexico offers ab-initio training for technicians and pilots in collaboration with the HeliEscuela, located in the state of Veracruz, as well as training of helicopter maintenance technicians, thanks to an agreement with Turbomeca’s Mexican branch.
“A key factor in Airbus Helicopters’ success in Latin America stems from its early entry into markets and launching industrial cooperation programs that have greatly contributed to the development of the local aviation industry,” said company spokeswoman Gloria Illas. “Brazil and Mexico, with the setting up of a EC725 final assembly line and a new manufacturing facility of aeronautical components, respectively, are good examples of the Group’s active role in industrial cooperation and transfer of technology in the region.”
Helibras Scores During World Cup
During the recent FIFA World Cup soccer championship in Brazil, Helibras significantly augmented its capabilities to support a fleet of 40 army and 120 other Airbus Helicopters rotorcraft used to support the event. Helibras established a special parts warehouse, dispatched technicians to host cities including Belo Horizonte, Fortaleza, Rio de Janeiro, São Paulo, Brasilia and Manaus, who remained there for the duration of the games. It also prepositioned spares and tooling to support air force helicopters based in Minas Gerais.
This planning paid off, according to Flavio Pires, Helibras vice president of support and services. Pires said 36 army helicopters were aloft for 600 hours during the games and had a dispatch rate of better than 93 percent; six other army helicopters were kept in reserve. Pires noted that the effort showed “Helibras’s commitment and capacity to serve its clients in any situation.”