The international helicopter industry is about to see significant growth in leasing as a form of financing, according to industry executives.
Christopher Grainger, a vice-president, sales and marketing, at Airbus Helicopters (formerly Eurocopter), believes that leasing could account for as much as a third of sales in five years' time, as the big lessors – Milestone Aviation, Waypoint Leasing, Macquarie and Lease Corp International – build their books.
The oil and gas industry is the driving force for change.
As oil operations move to more remote areas, the demand for helicopters to transport staff and equipment will grow, says Chris Seymour, of Ascend Worldwide, a global flight consultancy.
The outsourcing of helicopter services to independent providers is firmly established as the industry’s preferred operating and business model, says Mr Grainger.
“Larger oil companies such as Exxon, Chevron and Shell might have their own modestly sized fleets but they are very much the exception.”
He puts the cost of a large twin-engined aircraft at €20m-€30m for operation in the North Sea, depending on the requirements.
The bigger 19-seaters will cost service operators or lessors around $30m each, says Mr Seymour. “But you probably couldn’t get one for a couple of years; the production lines are all full.”
The external providers market is dominated by the so-called “big three”: Bristow Helicopters, CHC Helicopter and Bond Offshore Helicopters.
But there is a long tail of smaller companies with weak balance sheets for which leasing would be a more obvious fit than other forms of financing.
Oil and gas companies pay a monthly commitment fee to their operators – ensuring the operators have income even if no flying takes place – plus utilisation fees charged per flying hour.
Leasing is also popular because of the costs of maintenance.
The sheer complexity of helicopter mechanics and the impact this has on servicing and maintenance requirements mean that it is arguably a more important consideration than in many other industries.
Illustrating its importance, Mr Grainger calculates that 40 per cent of his company’s annual turnover, which amounted to €6,297m in 2013, derives from after-sales service.
“Helicopter operators can deliver a turnkey service including power, pilots, logistics and spare parts, very often in remote and hostile places such as the North Sea, Brazil, Australia and Angola,” he says.
“We work closely with them to provide on-time support and services in order to minimise down time. A helicopter idle for just one day can cost a lot in terms of lost production and safety.”
Mr Seymour of Ascend Worldwide calculates that there are currently about 1,950 helicopters in action, shuttling to and from some 8,000 offshore platforms and other locations around the world.
The range required of future craft will continue to grow in line with the trend for exploration and extraction to move to even more remote locations.
Mr Seymour believes there will be demand for 1,200 new “super-medium” craft over the next 10 years; this is the biggest single market to tackle globally, he adds.
One such helicopter is the EC175 from Airbus Helicopters, which has a radius of action of 130-140 nautical miles (implying a round trip of 260-280nm with a full payload).
Airbus Helicopters says there has been strong demand for the model and it is also reporting sustained interest in its EC225 which can carry 19 passengers and has a radius of action of 220nm.
The EC225e, scheduled for launch in 2016, will have the capacity for longer journeys.
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