Pre-owned heli sales soar, but what about the Ukraine effect?
Sales of pre-owned single- and multi-engine turbine helicopters soared last year, according to the latest report from industry analyst AMSTAT. But it’s too early to gauge how the helicopter market will be impacted by sanctions imposed after the Russian invasion of Ukraine, an industry source tells Helicopter Investor.
Transactions of both pre-owned single- and multi-engine turbine models exceeded the levels achieved in 2019 and 2020. Single-engine helicopters saw the biggest improvements, with sales last year up 25% on the level achieved in 2020 and 30% up on the 2019 level. Sales of singles under 10 years old saw the biggest year-on-year growth – up by 70%.
Pre-owned multi-engine sales last year were 27% up on the previous year and 12% above the 2019 level. But AMSTAT noted the monthly sales performance in this category was more variable than for single-engine turbines. Four months of 2021 underperformed the same months of 2020, with sales in the fourth quarter of last year down 11% on the same period of 2020. All age groups in the multi-engine category performed better last year. But it was mid-age multi-engine turbines that say the biggest year-on-year growth, up by 48% compared with 2020.
Caution in interpreting the figures was advised by Jeremy Parkin, MD with helicopter market intelligence firm Parapex Media. Pre-owned helicopter trading over the past two years has been shaped by the pandemic and the restricted movement of aircraft.
“While the 2021 figures look exceptionally good, they need to be taken in the context of how the pandemic impacted our industry,” Parkin tells Helicopter Investor. “Many corporate owners reached a point where assets needed to be sold, particularly to provide working capital for business survival. Additionally, some businesses had to close and the standard liquidation process is geared around speed to cash out rather than waiting to achieve the best market price. This leads to the number of retail sales being unusually high.”
Also, the early phase of the pandemic between March 2020 and July 2020 saw lower activity on single turbine sales than in 2019. “That’s no surprise and the overall year totals shows 2020 just 4% ahead of 2019,” he said.
In contrast to pre-owned fixed-wing inventories – which peaked mid-2020 in reaction to Covid and then fell month after month – the single-engine market peaked early in 2021 and then started to contract, revealed AMSTAT research. The availability of pre-owned single-engine helicopters is down across all age segments. But the most pronounced fall is for models under 10 years of age, which are down 47% year-over-year. Multi-engine inventories continued to contract, following the trend that started at the end of 2016. The newer segment saw the biggest contraction, down 33% year-over-year.
The average asking prices for single engine helicopters peaked early in 2021. Since then, it has fallen by 5% year-over-year. But asking prices climbed by 15% year-over-year; reflecting increased demand and fewer pre-owned multi engine helicopters for sale.
Overall, the health of the global helicopter market continues to be robust and adapts to changing situations, according to Parapex Media. Demand for entry-level corporate twins, such as Leonardo AW109SPs, has risen sharply in the past two years, with owners new to rotary wing ownership matching the Ultra-High Net Worth Individuals (UHNWI) corporate jet demand for secure private flying. Most helicopter types in this sector of the market are on a 18-24 month backlog from the factory and sales of newer (less than five-years old) pre-owned helicopters have been boosted as a result.
Rising sales and falling inventories were confirmed in the recent 2021 Annual Heli Market Trends report from Aero Asset. A 25% increase in retail sale volume year-over-year was identified by the helicopter sales and acquisitions specialist. Aero Asset’s vice president of market research Valerie Pereira said: “In line with a very positive 2021 market performance, the number of twin-engine helicopters on the market at the end of Q4 [fourth quarter] 2021 shrunk by 26% compared to the same period a year earlier.” At the same time, the deal pipeline has dried up, with a 40% fall to 17 units in Q4. But the pipeline remained relatively stable over the last three quarters of the year.
North American and European sales accounted for nearly 70% of total transactions last year. North America transaction volume climbed by 65% year-over-year. VIP sales rose 20% year-over-year and utility helicopter sales were up 40%. You can read the full 2021 Heli Market Trends report here. (Pictured are helicopters from Aero Assets’ historic inventory)
Meanwhile, it is too early to say how the latest sanctions imposed after the Russian invasion of Ukraine will impact the helicopter market, says Parkin, of Parapex Media. But there are 545 turbine helicopters currently on the Russian register from factories in Europe or the Americas.
“These are likely to be impacted by the lack of technical support and spares availability,” says Parkin. “Additionally, we are also keeping a close watch on the superyacht market where 91 vessels have helicopters permanently assigned and over 20 of those would appear to be linked to Russian ownership.”