Market perspective: Helicopter Values 2017
Last week, HeliValue$ released their latest Helicopter Blue Book, in which they reported the first increase in helicopter values since 2009.
This has got people talking. At Helicopter Investor 2017 in January, the general market outlook was not cheery. Whilst a few voices gave a more positive outlook on the future of the market, the majority were not too confident about helicopter values or sales going into 2017.
Just a few months on, there is a new trend of “cautious optimism” around helicopter values. To get a better understanding, Helicopter Investor reached out to a number of helicopter appraisers to give their perspectives:
Alastair Fallon, aviation analyst at IBA.
“The helicopter industry does go in cycles. It feels like we are on a slow recovery path from the down turn experienced over the past three of four years. Orders have and deliveries have shown this. The pattern has followed closely between the oil price and the delivery of new helicopters. In particular the Offshore , heavy category of helicopter has been affected the most. New helicopter orders and deliveries on existing orders have kept the industry ticking over.
There is every possibility that the AS350B2 could begin to command more interest on the resale market. Partially the helicopter with offshore ability as there is a gradually upturn in the rig in use count. The Air Ambulance capable models are still fulfilling a useful role and this area of the market is growing. The second hand sale in AS350B2 helicopters with little need for reconfiguration is an appealing factor to many. If the OPEC agreement reached towards the end of 2016 holds and the oil industry remains in a stable price $50-60 per barrel and upwards then the industry will regain health. Further news on this family of helicopter has seen it become largely in use with military helicopter flying training in the UK and also with Brazilian forces. 1213 x AS350B2 helicopters are in operation of which 6.3% (or 76) are available for sale.
The Bell 206L-3 operates in largely the same fields as the AS350B2: in ten instances operators of the AS350B2 upgraded to the Bell 206L-3 while in 17 instances operators of the 206L-3 upgraded to the AS350B2. 30 Bell 206L-3 helicopters are available for sale or lease (or 6.48% of the operating fleet.)”
David Crick, managing director of DavAir Group.
“We’re also seeing interest in the AS350B2’s and 206L-3’s in this region and it seems that the profile of the operator is one in the utility market with a small number of ships in their fleet. They have contracts that require the operating assets so they are looking for low time good quality hell’s but have limited budgets for capital expenditure or funding exposure.
“That, coupled with fairly high levels of supply options and the OEM’s tightly controlling the market of the newer variants make the newer versions more expensive as a capital outlay. The operators can charge the same hourly rates for their operating helis whether they have a slightly older machine that costs them less in capital investment or buying a newer more expensive option.”
Kim Seward, manager, asset valuations at Morten Beyer & Agnew.
Through mba’s point of view, we are cautiously optimistic so far into 2017. Generally most types are seeing stabilization rather than a significant change in value, including the AS350 and Bell 206 family helicopters. Having said that the types we are seeing most change in recently are the AW139, where values on newer models with the 7 tonne MTOW option are seeing increased market values. While the S-76Cs, particularly the C+, are seeing significant oversupply and market softening.