Oil topped $60 per barrel at the end of last year, a harbinger of optimism for new rotorcraft sales. Growing geopolitical uncertainty combined with OPEC crude oil production cuts should send the price of oil and gas climbing further this year, benefiting the leading offshore operators as that sector consolidates and rebounds. However, expect to see more offshore activity in Austral-Asia and a growing shift from heavies to super-mediums to service that market, a development that bodes well for Airbus, Bell, and Leonardo—companies with available or soon-to-be available new models in that sector. Those models also will benefit from the global trend to privatize helicopter search-and-rescue operations.
What oil couldn’t do for market optimism, Mother Nature did, lashing the Continental United States and the Caribbean with an unprecedented array of hurricanes, floods, and fires, reminding everyone with access to a video screen that, in times of disaster, there is no substitute for a helicopter commanded by a competent crew. Concurrent with these unfortunate events, new helicopter orders and deliveries, while not surging, showed marked improvement. Data released by the General Aviation Manufacturers Association (GAMA) revealed, that for the first three quarters of 2017, shipments of piston helicopters increased by 13.1 percent with 190 delivered in the first three quarters, while turbines rose by 5.6 percent, to 471. Rotorcraft billings increased 8.8 percent, to $2.7 billion.
In that quarter, Textron’s Bell Helicopter reported a 13.1 percent operating margin on the delivery of 39 commercial helicopters, up from 25 in the same period last year. The deliveries include five 412s and the start of 407GXP deliveries to China’s Shaanxi Energy Group as part of a 100-ship order. Largely on the strength of increased commercial deliveries, revenues at Bell were up $78 million in the quarter and segment profit increased by $9 million from a year ago. However, backlog slid to $5 billion, down by $413 million from late June. Textron chairman and CEO Scott Donnelly said the increased civil orders were broad-based, both from a sector and geographic perspective, “which is good frankly.” He added, “I think the overall market is still weaker than it has been in previous times, but it’s much better than it was couple of years ago.”
Airbus Helicopters posted mostly good news throughout the year, starting with a strong first quarter that saw new orders surge. Overall first-quarter helicopter orders at the company climbed 41 percent year-over-year, to $1.55 billion and civil helicopter deliveries increased to 78 in the quarter, up from 56 in the same period last year. For the first nine months of the year net helicopter orders totaled 210 units, including 14 super-medium H175s in the third quarter. Airbus Helicopters’ revenues were slightly higher with deliveries of 266 units; however, earnings before interest and taxes fell sharply as the result of continuing blowback from the post-crash grounding of Airbus H225 heavies in 2016. Airbus continues to hold its share of the North American civil market at 50 percent and is making a new push into the corporate sector, last year unveiling Airbus Corporate Helicopters (ACH), a unit that will be dedicated to its private and business aviation customers. The new organization will provide concierge-style end-to-end support, from purchase, through training, ownership and even possibly resale.
Likewise orders grew by 11.2 percent in the first nine months of the year for Leonardo Helicopters.
Overall, the civil helicopter market should continue to experience modest growth this year, led by demand for light singles and regional strength outside North America in Europe and Asia. Honeywell’s helicopter forecast pegged demand for light singles at 58 percent of total units over the next four years, while demand for light twins shifts to medium twins and super-mediums. While virtually all new helicopter programs have experienced development delays, there is no shortage of new product in the pipeline, primed and ready for an ascending market.