HAI Convention News

LCI Starts 2015 With Strong Leasing Activity

 - March 2, 2015, 1:15 PM

Leasing group LCI Helicopters has begun 2015 with a flurry of activity that has seen it add customers in the emergency medical services sector (EMS) and further increase its aircraft portfolio. The company believes that the downturn in the oil and gas industry will not have a serious long-term impact on this part of its business. At the same time it is seeing growth in other areas and may have more new business to announce here at the Heli-Expo show this week.

Last week, LCI signed agreements with two Australian operators for a total of 10 new AgustaWestland AW139s. Australian Helicopters agreed to lease six AgustaWestland AW139s to be operated for Air Ambulance Victoria. These will be delivered during 2015 and 2016 and will be modified in Australia for emergency medical operations.

Separately, Westpac Rescue Helicopter Service is to lease four AW139s that will be delivered in the second half of 2016 after being fitted out for emergency medical and rescue service. The aircraft will be operated in the state of New South Wales on behalf of government-backed healthcare provider NSW Health, using bases in Newcastle, Tamworth and Lismore. The 10-year lease is supported by Westpac Banking.

On February 17, LCI confirmed firm orders with AgustaWestland for 11 more helicopters valued at $125 million. The aircraft, which had been covered by earlier options, are a mix of AW139s, AW169s and AW189s. They will be delivered in 2015 and 2016, taking the total size of the LCI fleet to almost 90 rotorcraft. Apart from one of the AW139s, which is part of the group of aircraft going to Australia, all the other new models are being bought by LCI on a speculative basis.

“The emergency medical sector is strong,” LCI chief executive Mike Platt told AIN. “We have been able to get operators to see that leasing makes more sense than buying helicopters.” According to LCI, many emergency medical operators are run as not-for-profit organizations that receive monthly fees from governments. This makes paying monthly lease charges more compatible with their cash-flow situation.

“Most EMS services are using older equipment or have seen a big increase in demand [for flights],” added Platt. According to LCI, the EMS sector has a strong need for the latest safety technology because pilots have to be able to fly in and out of almost any location at very short notice. Helicopter operators serving the oil and gas industry at least have the advantage of knowing exactly where they are going to be flying to on any given day.

LCI is now responding to a request for information issued by Ontario-based air ambulance service provider Ornge, which is considering whether to replace its existing AW139 fleet. Platt said he is also in contact with another Canadian EMS provider that may be in the market for new rotorcraft.

The tumbling price of crude oil has induced energy groups to institute aggressive budget cuts, but LCI believes this will have a relatively short-term impact on demand for helicopter services. Platt said he isn’t seeing a significant dip in flying associated with production activities, which involve long-term commitments and is where most new helicopters are active. There is some reduction in service to shallow-water sites, mainly involving single-engine aircraft, and in some cases helicopters are being moved from exploration and development projects to production activities.

The offshore wind energy industry is another sector in which LCI is seeing new demand for leased helicopters. In October 2014 it signed an agreement to lease a new AW139 to HeliService International, which is supporting operations in the North Sea and Baltic Sea.

LCI now has significant order backlogs with both AgustaWestland and Airbus Helicopters, but Platt emphasized that the company also has a keen interest in possible orders for models such as the Sikorsky S-92 and the new Bell 525. “We do like the AW139, which is effectively in a class of its own without much competition,” he commented. “There is a lot of demand for it and good retention rates, plus AgustaWestland can also offer the AW169 and the AW189 for people to move up to. It’s a good family concept.”

At last year’s Heli-Expo show, Ireland-based LCI ordered almost $1 billion worth of new helicopters from AgustaWestland and Airbus Helicopters.