Bristow cancels 22 H175 order with Airbus
UPDATE: Airbus has since dismissed claims that the 22 H175s cancelled represent half of the model types order backlog.
Bristow Group has cancelled a long-standing order for 22 H175s with Airbus Helicopters – which is thought to be more than half of Airbus’s total H175 order backlog, according to sources familiar with the matter.
Bristow’s cancellation of the order was approved in the Houston Bankruptcy Courts during its Chapter 11 protection process, from which it emerged from in early November. The order cancellation was revealed in Bristow’s latest 10-Q finance update it submitted to the US Securities and Exchange Commission (SEC).
The helicopter operator was one of the first to commit to purchasing the H175s, ordering five of the aircraft in 2013. It more than tripled the order to 17 in March 2015, with deliveries scheduled to start in October 2016. The operator decided to add a further five aircraft to the backlog in 2017.
During the early stages of Bristow’s Chapter 11 bankruptcy protection process in May last year, both Bristow and Airbus agreed to postpone the delivery of the 22 helicopters for 18 months, with the first delivery of three helicopters postponed until 2022 – according to the 10-Q form.
According to a Bristow spokesperson, the company has no H175s in its fleet today.
This resulted in a deferral of around $110m, originally scheduled for payment to Airbus between 2019-2023 into 2024 and beyond. The price of the helicopters also increased by $18.4m to account for inflation.
But in September, Bristow asked the bankruptcy court to approve the cancellation of the purchase agreement, which was approved by the court on October 3rd. None of the 22 aircraft have been delivered, Airbus told Helicopter Investor.
‘A Blow to Airbus’
Alastair Fallon, helicopter aviation analyst at IBA Group, told Helicopter Investor: “It is certainly a blow to Airbus to have such a large order cancelled. They are going to have to find others to take the aircraft depending on what stage along the development [path] the helicopters are.
“If they have other H175 orders on the backlog, some of those customers may be getting their helicopters a little earlier if they are able to take them. 22 is a big number considering the H175 backlog.”
Airbus told Helicopter Investor 40 H175s are currently in service, including a number of Airbus Corporate Helicopter ACH175s. Aircraft lessor LCI received the first H175 in March 2018, placing it with fellow offshore operator CHC.
Regarding the court decision, an Airbus spokesperson said: “We do not comment on commercial discussions with our customers.”
Meanwhile, read information on the order cancellation as it appears in the 10-Q filing below:
“Rejection and Deferral of Purchase of H175s— On May 1, 2019, we entered into an amendment to our agreement with Airbus Helicopters S.A.S. for the purchase of 22 H175 helicopters, which includes five aircraft that can be cancelled by us prior to the delivery dates. Pursuant to the amendment, the parties mutually agreed to postpone the delivery dates for such helicopters for 18 months from the previous schedule, with the first three helicopters now scheduled for delivery in the second half of fiscal year 2022. The postponement in deliveries resulted in various amendments to the payment terms under the purchase agreement including the deferral of approximately $110.0 million in capital expenditures scheduled for fiscal years 2019 to 2023 into fiscal years 2024 and beyond. In connection with this amendment, the overall purchase price of these helicopters increased by $18.4 million to account for inflation.
“On September 30, 2019, the Debtors filed a motion with the Bankruptcy Court to approve a settlement agreement with Airbus Helicopters S.A.S. in regards to the rejection of the purchase contract for 22 H175 helicopters. On October 3, 2019, the Bankruptcy Court entered an order approving the agreement with Airbus Helicopters S.A.S. to reject our aircraft purchase contract for the 22 H175 helicopters.”