Helicopter Investor London 2018 Live
“I think the death of the S-92 is fake news,” says Dan Rosenthal of Milestone
Rosenthal says that there are 18 companies in the room that have had an AOG situation that has lasted for more than a year.
“We are in a new reality of helicopter asset management,” say Rosenthal.
“We are a niche industry, but we are trying to change that.” says Rosenthal.
Dan Rosenthal of Milestone Aviation starts off his session by asking delegates to sing happy birthday to Sebastian Moulin, VP commercial at Milestone
“Irrational competitor behaviour” says Maunder when asked the same question
“Do we still see the debt market still there to support the next delivery,” says Olivier Piot when asked what keeps him awake at night.
“Going forward we need to think about risk factors more, and build them into our pricing” says Pat Sheedy, Milestone Aviation Group.
— Lobo Leasing (@LoboLeasing) February 1, 2018
“It is all about orders” says Olivier Piot, CEO of Nova Capital
“We already have five of our orders placed, so 2018 should be a fairly flat year.” says Maunder.
Crispin Maunder says that he’d probably give seven out of ten for the helicopter industry, but 11 of out ten for the LCI team.
“We can sit here and say lease rates are lower, but rates are down across all sectors,” says Cook
“Close to a seven,” says Stephen Cook of Macquarie when asked to rate 2017 on a scale between one and ten.
Crispin Maunder of LCI Helicopters says that the EMS market remained strong through the downturn, and continues to remain strong now.
“We want to look at transitioning from having data, to taking action” says Haskins.
“We recently drafted the mou for people that put their data into our systems” says Haskins.
Answering a question from the floor, Haskins says that the technology to see and avoid drones is crucial to safety. Adding that it is possible to release drones into the wild safely.
Data, says Haskins, is the key to ensuring safety.
Gretchen Haskins, of HeliOffShore, brings up a slide showing the flight routes into London’s airports on a daily basis, saying that, despite the 6,000 daily flights, there has yet to be a mid-air collision.
Alain Gauthier of EDC said: “Helicopters are a small, niche market for Export Development Canada”
David Fiore of America’s EXIM Bank said: “EXIM Bank currently has $37 billion in aviation loans on its books, mainly financing commercial airlines’ purchases of buying Boeing aircraft. But a part of this $37 billion is investment in helicopters, especially when their manufacture supports US jobs.”
EXIM Bank has provided financing to a number of helicopter sectors. It can also help finance where the commercial finance market lenders might have reservations, especially if the deal supports US-based jobs.
Tom Low of AirFinance said: “AirFinance works closely with Export Credit Agencies (ECA) to structure deals in various countries around the world and these deals included helicopters.”
Florence Roussel-Pollet of SocGen said “The ECAs are there to help financiers with the deals they make.”
— FlyFunder (@flyfunder) January 31, 2018
David Fowkes of Seabury Consulting is talking about the differences and similarities between helicopters and commercial aircraft.
One of his points is about consolidation, saying that the commercial market has seen many mergers and acquisitions, but that has yet to happen in the helicopter world.
Nakayama says that it is not only Japan that ITC has done deals in, it has also financed helicopters in Bolivia, Peru, South Africa, Russia, and China.
Nakayama says that ITC aren’t only financing the cost of the aircraft, but also the costs of bringing the aircraft to Japan. The only thing it can’t finance, is pre-delivery payments.
Mirika Nakayama of ITC Aero-Leasing is introducing her firms Operating Lease. She says her company is funded by 70 ultra high net worth individuals, each investing between $1 million and $5 million per aircraft.
83% of delegates think that PBH (Parts by the Hour) helps increase the residual value of a helicopter.
Moderator Alasdair Whyte asks the two panellists to sum up in one word their views of what 2018 will be like. Moulay says “sustained, Bentolila goes for “recovering”.
It’s an exciting time to be part of an OEM, there’s a lot of new technology coming up says Moulay.
The two OEMs agree that they are keeping a close eye on start-ups, especially in the electric helicopter sector
Are OEMs introducing new models too quickly, rather than focussing on increasing reliability of existing models? The panel certainly doesn’t think so
Lessors are playing a significant role in educating customers on what services can be offered says Patrick Moulay of Bell Helicopter
Unfortunately, it is not currently possible to pay for a helicopter using Bitcoin
The OEM panel also agree that reconfiguration of helicopters between mission profiles is not done quickly enough for optimal operational performance
— LCI Aviation (@LCIaviation) January 31, 2018
Following a question from the delegates, the OEM panel agree that operators and lessors will pay the same purchase price for a helicopter.
David Crick says it is always important to read the caveats that come along with a valuation, as different appraisers use different assumptions.
If you do not have your helicopter on a program, good luck on finding a buyer says Jason Kmieck, of HeliValue$
80% of attendees believe that the advent of operating lessors has made it harder to value helicopters.
David Crick says that there are some helicopter models that have not traded for several years, which makes producing a fair market value for them impossible.
David Crick of the DavAir Group says that they are finding that operators and contractors are being much more specific with their requirements.
An overwhelming majority of attendees voted for SAR / EMS as the most investment worthy sector
Patria say they are looking for feedback from operators, as they look to expand on their offerings.
Shell are looking for efficiencies, including sharing aircraft with other operators and oil companies
Speaking next about the future for CHC is Karl Fessenden, the company’s CEO.
He says that CHC managed to achieve $1.4 billion in savings, following a $300 million capital injection, and taking in a further $150 million in aircraft financing from Milestone and GE.
Look out for our interview with Fessenden coming later in the day.
Welcome to day one of Helicopter Investor London 2018, coming to you live from the Landmark Hotel.
We are starting off this morning with an overview of the industry by Michael Platt of LCI Helicopters — looking back over the past five years, and looking forward to the next five.
Platt begins by saying that there have been many different indicators over the last five years, some positive, some negative. A recent positive has been the stabilisation of oil prices which, Platt, says allows oil companies to plan ahead and invest.
One area poised for growth is in the offshore wind sector. A recent study showed that there will be an additional 10,000 turbines installed offshore between now and 2024. According to Platt, for every 80 wind turbines a service helicopter is needed.
Overall, Platt says, that his company, LCI, is starting to see pent up demand. Oil workers are starting to stay longer on rig, reducing the number of helicopter transfer flight needed. This is coupled into more efficient use of helicopters, flying them less every week.
However, Platt suggests that LCI might be in the perfect position throughout the business cycle. “We have learnt that during the upturn operators need our equipment. During a downturn they need our financing.”
The Landmark Hotel is opposite Marylebone Station. Marylebone Underground is on the Bakerloo line.
If you are coming from Heathrow it is very close to Paddington Station where the Heathrow Express