LABACE Convention News

P&WC Reveals Latin American Bizav Market Expectation

 - August 14, 2018, 12:33 PM
The Pratt & Whitney Canada PW500 gathers some interest from the bizav crowd at LABACE 2018 in São Paulo. (Photo: David McIntosh)

Latin America’s fleet of fixed-wing business aircraft will grow by 44 percent by 2027, with the business aviation market worldwide experiencing overall growth of slightly more than 15 percent during the period, in Pratt & Whitney Canada’s view.

Satheeshkumar Kumarasingam, P&WC’s v-p of customer service, told AIN that the company’s internal assessment of the Latin American fixed-wing business aviation market—which the company hasn’t shared publicly until now— forecasts that GAMA-reporting OEMs will deliver 80 fixed-wing business aircraft to Latin America in 2027, compared with 41 in 2017.

P&WC also expects GAMA-reporting members to deliver from 817 to 820 aircraft worldwide in 2027, compared with 677 aircraft in 2017, according to Kumarasingam.

However, Kumarasingam added, “A big driver and dependency [of P&WC’s growth expectation] is a recovery in the Brazilian economy. It is a powerhouse in the region.” To the extent that Brazil’s present low consumer and business confidence—impacted by overwhelming political uncertainty in advance of Brazil’s forthcoming presidential election—persists, growth in the Latin American business-aviation market could be affected adversely, he said.

Should Brazil’s economy stabilize in the wake of the election, as it has done more than once following past downturns and periods of economic stagnation, Kumarasingam expects two segments of the key Brazilian business-aviation market potentially to provide P&WC with strong business opportunities. One is growth in the medium-to-large business jet market.

“I think there is going to be a segment of transient travelers, from Rio [de Janeiro] and São Paulo,” who will buy business jets such as “the Falcon 7X, the Falcon 8X, and the Gulfstream G500” so that they can fly more easily and conveniently between Brazil and countries on other continents, said Kumarasingam. “I think that’s really what is really going to give us the lift in this part of the world, because businesses want to go faster to Europe” and other continents.

The second Brazilian bizav market segment he sees as particularly promising is helicopters for offshore oil-and-gas platform support. This market has been poor for some time as a result both of low oil and gas prices recently and of Petrobras’s corruption scandal-induced decision to stop contracting helicopter operations in the offshore market. But Kumarasingam reckons that with oil prices continuing to rise the Brazilian and Latin American region’s offshore oil-and-gas segment will attract new exploration and drilling activity that will require supporting air services by medium-size and heavy helicopters. He sees the Brazilian offshore oil-and-gas aviation segment eventually growing at a rate well above Brazilian GDP growth—perhaps by as much as 15 percent annually.

Tailored Service and Support

With the ubiquitous PT6A accounting for about 60 percent of all P&WC engines operating in Brazil, the Brazilian market for sales and support of the engine family will remain important to the company even though Kumarasingam thinks the PT6A market in Brazil will only grow “more or less [along] with GDP growth.” P&WC’s PT6A customer base is particularly important to it because “most are owner-operators and each has a different need,” he said. This means that not only must the company offer tailored support to each customer—many of which have only one aircraft—but the customers’ widely differing needs provide P&WC with an opportunity “to offer premium upgrade services.”

As an executive who travels to Brazil often (he visited the country in the first half of July and spent time there with a variety of customers), Kumarasingam stressed that in the fragmented and geographically enormous Brazilian market it is vital to understand what customers in each of the many sub-segments of operators want in terms of support. “Lately we have invested in understanding what is important to customers in each of the [Brazilian] regions,” he said. “It’s all about knowing how your product is being used and what is important for customer expectations.”

For instance, in July Kumarasingam visited a location where operators were using a sizable number of Cessna 208 Caravans to service the skydiving market. Because each aircraft is used only to carry parachutists up to a certain altitude and after dropping them it returns to land quickly to pick up more parachutists, the aircraft accumulate a lot of flight cycles. So their MRO, spares, and other support-service requirements are different from those of operators using Caravans, say, to operate regional passenger or cargo flights.

According to Kumarasingam, Brazil is a market sufficiently important to P&WC for the company to have developed in the past two years a five-pronged strategy to expand its presence there. Some of the results of that strategy have become evident in the announcements P&WC has made over the past 12 months regarding new MRO partners in Brazil. However, he said more Brazil-market announcements will come at a rate of about one “every quarter” in the near future: P&WC (Booth 2010) is still working through negotiations with several other potential partners for various areas of its business.