A beginner’s guide to helicopter markets

The helicopter industry is very different to the business jet market. This quick guide has been designed for complete beginners or industry veterans who are very good at bluffing.
A Bell 412 helicopter in flight.

A Bell 412 helicopter in flight.

There is no single helicopter market

Although all helicopters rely on similar aerodynamic principals there is no single helicopter market. And there are many ways to segment the helicopter various market. You can look at the weight, cost, number of engines, or the type of missions for which helicopters were built.  

Personal Ultra light single engine 

R22
$300K
VIP

Light single engineEnstrom/R44/R66/S300

$500-$1M
VIP

Single engineB206L/EC120/

AW119
$2M-$3M
VIP/Charter

Utility Very light twin engine 

AS355 $3MVIP/Charter

Light twin engine GrandMD902/EC135

$5.5M-$7.5M
VIP/Charter/Utility

Medium twin engineEC145/AS365/AW169

$8M
VIP/Charter/Utility

Off-shore Medium/heavy twin engine 

AW139/S76/AS332
$12M+
Off Shore

   

This table, adapted from one that Giorgio Bendoni of Sloane Helicopters presented at International Corporate Jet & Helicopter Finance 2011, combines weight, price and missions and includes some examples of types.

As you move down the table one major change is the type of pilot. In the first row – the single engine market – in most cases, the owner is also the pilot. In the second line it starts to change. In the very light twin market (which is comprised of just one model: Eurocopter’s AS-355) some owners will have a pilot’s license but many will use an operator.

The larger helicopter markets – light twins, medium twins and medium heavy – are nearly always operated by companies.

With light twins helicopters – including very light twins – you alos see a lot more charter including Emergency and Medical Services (EMS) work, police work and other missions.

The medium and and heavy market is dominated by off-shore helicopter activity.

These market distinctions are important to financiers. During the last downturn the top row suffered far more as individuals tried to sell their personal helicopters, demand was stronger in the utility markets.  The smaller aircraft market is mainly a cash market with financing becoming more common as you move down the table.            


Mission is important but helicopters can change

It can be a mistake to focus too much on mission as helicopters can be re-fitted.

Eurocopter’s EC135 is a good example. It is a popular helicopter with executive helicopter charter companies but can also be used in the utility sector. During the credit crunch when demand for VIP flights fell, utility buyers were buying executive EC135s and converting them to utility roles. The same happened with Sikorsky S-76s that went from the VIP market into the offshore market.


Geography is important

Helicopters are clearly moveable assets and they are commonly sent by sea in crates.  But they do tend to be concentrated around certain markets.

In the executive helicopter markets there are hotspots like New York, Boston and Washington, London and Sao Paulo in Brazil. Paris and Frankfurt are much smaller markets.

The EMS markets are far more widespread with a lot of emerging markets investing in this area. These markets can also change quickly. A few years ago Turkey decided to create a national EMS operation. The number of EMS helicopters went from zero to 17 EMS aircraft in less than two years.

The core business of the offshore market is ferrying people between land and oil rigs. Fleet growth is dependent on new oil rigs. Whilst the off-shore fleet has stayed relatively stable, new helicopters, particularly from AugustaWestland and Eurocopter, have been replacing older aircraft. Many oil companies have also specified maximum ages for helicopters.

Terry Spruce

Terry is Senior News Editor and writes for both Corporate Jet Investor and Helicopter Investor. He is also responsible for our helicopter guides. Terry has been an aviation enthusiast since the early 1970s. He is a lapsed Private Pilot and ex-Piper Cherokee owner. He has flown a number of light aircraft and is comfortable sitting in the co-pilot's seat or the back of any aircraft. Before moving to journalism he was a banker for 20 years. You can contact him at: terry@corporatejetinvestor.com or follow him on twitter @Terry_Spruce

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