Honeywell Aerospace is forecasting 4,000 new turbine helicopter deliveries over the next five years, according to the company's 21st annual Turbine-Powered Civil Helicopter Purchase Outlook released on the eve of Heli-Expo 2019. This is down 200 helicopters from its forecast last year. The latest outlook’s worldwide purchase plan rate is 15 percent, down 3.5 percent from last year, largely affected by economic and political uncertainty in some parts of the world, Honeywell said. Its forecast is based on a recent worldwide survey of more than 1,000 chief pilots and flight department managers of companies operating 3,334 turbine and 321 piston helicopters.
Still, the Phoenix-based supplier of aircraft engines, avionics, and cabin systems expects an annual helicopter delivery growth rate of between 3 and 4 percent from 2019 to 2023. In the first three years, that rate will be driven by new helicopter models coming to market, followed by more favorable exchange rates and higher oil prices in the last two years.
Light single-engine helicopters will account for most new purchases during the five-year period, accounting for an estimated 51 percent, followed by medium twins, 31 percent; light twins, 13 percent; and heavy twins, 5 percent. Purchase plans call for light and medium-twin helicopters to account for a greater share of deliveries than in Honeywell’s 2014 to 2018 forecast period. According to the outlook, the top-three factors that operators consider when purchasing a new helicopter are brand experience, aircraft performance, and cabin size.
Helicopter use is projected to be higher among law enforcement and oil-and-gas operators over the next five years, the outlook said, and lower among corporate users.
Regionally, purchase plans by operators in North America, as well as the Middle East and Africa, are expected to be higher over the next five years. However, purchase plans dropped sharply in Latin America and are modestly lower in both Europe and Asia-Pacific, according to the outlook. “Despite positive impacts of U.S. tax reform on new helicopter purchase plans in North America, an inconsistent economic outlook for international markets has resulted in lower purchase plans worldwide from fleet managers when compared with a year ago,” said Honeywell Americas aftermarket president Heath Patrick.
In North America, where 40 percent of the world’s helicopter fleet resides, 20 percent of the survey respondents said their fleet utilization would increase in the next 12 months. This is higher than the outlook’s global rate of 14 percent. Honeywell said purchase plans in North America rose 5 percent from last year, and that 18 percent of respondents plan to replace or expand their fleet with a new helicopter in the next five years. Most of those purchases—65 percent—will be of light-single helicopters. Twenty-two percent of purchases in North America will be of intermediate and medium twins, the outlook said.
The Middle East and Africa boasted the second-highest rate of new purchase plans in this year’s outlook and were also up 5 percent from last year’s forecast, Honeywell said. Fifteen percent of owners and operators planned to buy at least one new helicopter for fleet expansion or replacement. Of those planning a purchase in these regions, nearly 70 percent expected it to be a medium-twin model. Light-single helicopters were the second-most mentioned category for new purchases.
But purchase plans in Latin America fell 26 percent from last year’s outlook, Honeywell said. Only 9 percent of operators there expect to replace or add a new helicopter in the survey period, compared with 35 percent in last year's forecast. Those downgraded plans were driven in part by expectations from operators in countries such as Brazil, where only 5 percent expected to replace or add a new helicopter. That is a reflection of higher political tensions in the country, as well as lower expectations for long-term economic growth, Honeywell said. Among those operators who plan to acquire a new helicopter in Latin America, about 70 percent favor light singles, a 20 percent increase from last year’s outlook.
Also lower from last year’s outlook were purchase plans in Europe, where nearly 15 percent of respondents expected to add to or replace helicopters in the next five years, down from 22 percent last year. About 30 percent of European operators planned to buy intermediate and medium-twin helicopters, while 25 percent favored light singles, which is down from 37 percent in the 2018 outlook. Honeywell noted that its sample of responses from Russian operators continues to be small, adding “some uncertainty to the overall European results.”
Fewer operators in the Asia-Pacific region plan for new helicopters as well. Nearly 13 percent were planning for a replacement or fleet addition between now and 2023. That’s down 5 percent from the 2018 outlook. Despite the regional drop, demand in China is stable with plans to add or replace 21 percent of the country’s fleet while new helicopter acquisition plans were up 10 percent in India. The region’s favored helicopter classes are split between light single and medium twins, with each class representing 30 percent of purchase plans, Honeywell said.
Despite the regional imbalances, the overall outlook is positive, Honeywell Aerospace senior manager of market research Gaetan Handfield told AIN. “It’s a healthy outlook,” he said, adding that in the past two years deliveries have grown an average of 10 percent per year. But that’s only after hitting a low of 589 deliveries in 2016, he said. That two-year growth trend continues in the new outlook, just not as robustly.
“We won’t go back to levels we saw in 2013 when we were delivering more than 1,000 helicopters annually,” Handfield said. “But in the end, if you compare this to the bottom, we’re much higher.”