Story ID: 343
LCI: Offshore Squeeze Will Continue
By: Mark Huber
Caption: Shortage of lift for offshore energy will continue in the short-term
Word Count: 424
The shortage of offshore helicopters isn’t going away anytime soon, according to Nigel Leishman, chief commercial officer at helicopter lessor LCI. He told AIN that demand for offshore lift is now above pre-Covid levels. “It’s just pure demand. There’s just more activity out there and there’s actually fewer helicopters available.”
And the problem isn’t just that the OEMs are having difficulties ramping production due to lingering supply-chain problems. Many of the helicopters that were parked during the Covid slump are flying elsewhere. “A lot of the helicopters that moved out of the oil and gas market during the downturn have gone on to other roles and are no longer available.”
Approximately 30 percent of LCI’s 150 helicopter fleet fly offshore energy missions, with much of the remainder deployed in the air ambulance and search-and-rescue sectors. The company mainly owns products from Airbus Helicopters and Leonardo.
However, all three of these sectors have been impacted by supply-chain disruptions, and Leishman said LCI is working with its customers and the OEMs to mitigate those disruptions, in addition to ordering more helicopters. But he cautioned that new orders alone were unlikely to bring quick relief to surging demand.
“[We can] possibly help with new ordering, but it is not necessarily going to be to the same extent that we saw in previous years,” he said. Earlier this month, LCI placed an order for 10 and options for 11 more Leonardo new-generation twins, including the AW139, AW169, and AW189.
Rather, Leishman said LCI is counseling its customers to expand their timelines. He noted that end-users “still are not in a position where they are really planning that far in advance. They’re putting contracts out there with start dates within six months or 12 months while the lead time for new helicopter [deliveries] is 24 months or more.
“While we are looking at ways we can possibly provide some helicopters [to these clients], we also need to educate them that they just can’t expect helicopters to be sitting there on the ramp when they come out to tender [new contracts].”
Leishman said the situation has led to LCI negotiating longer-term contracts and raising rates. He added that operator contracts with “termination for convenience” clauses were not helpful. “From our point of view, it means that it is very difficult for us to justify buying new helicopters.” He said end-users were becoming more receptive to this messaging over the last few months.