HI talks to Sikorsky’s Dana Fiatarone – Weathering the downturn
If any single helicopter manufacturer has turned the drop off in oil and gas missions into a positive, that one is Sikorsky.
The manufacturer has weathered the oil-and-gas downturn, but instead of moving away from the market and diversifying, it has doubled down.
In the civil market, the Connecticut-based manufacturer has been streamlining its business, laser focusing on the core medium-to-heavy helicopter market it serves. In January this year this culminated in Sikorsky’s sale of its S-300 light helicopter line to Schweizer RSG, a newly established subsidiary of Rotorcraft Services Group.
This leaves Sikorsky with two major helicopter models, the medium S-76 and the large S-92, two of the most popular oil-and gas-models in their weight classes. This has proved to be a good decision on Sikorsky’s part, with the S-92 still flying an impressive number of hours throughout the downturn, reaching a landmark one million flight hours in June 2016.
Whilst other manufacturers have high hopes of electric air-taxi drones, Sikorsky is taking a more-grounded approach to developing new aviation technologies with its new autonomous features for dangerous helicopter missions and helping to increase pilot awareness with its new real-time HUMS.
We decided to sit down with Dana Fiatarone, Vice President of Commercial Systems and Services at Sikorsky, to find out how Sikorsky is weathering the downturn and how it is going to continue.
HI: How is business?
DF: “We are pretty encouraged by the state of the market right now. It has been a difficult run for the entire industry over the last couple of years, especially coming off 2013 and 2014. And the past few years have been a soft market for oil and gas. But we are seeing new contracts and new leases — and customers are starting to fly more.
“During the downturn, we focused almost exclusively on making certain that our customers were getting good service and support so that they would see the value in continuing to buy our aircraft. What I am most encouraged by is that, during the downturn, the flight hours of the S92 continued to rise. In 2016, we saw a significant increase in S-92 utilization mid-year. In 2017, flight hours increased by 3 percent, and based on conversations I have had with customers last year and early conversations in 2018, we expect flight hours to be up by another 5% this year.
“We anticipate continued flight hour growth in 2018. In March, the total monthly flight hours for the S-92 Fleet were nearly 16,000 for the first time. In the same month, the flight hours for the energy sector alone were nearly 14,000 hours. Our existing assets continue to see increased utilization rates; we’ve had a 10 percent increase compared to January 2017.
“It is a difficult market. But it is encouraging to see that, when they need to fly, our customers are still choosing to fly Sikorsky.”
HI: How are you handling the oil downturn?
DF: “I think we react similarly to the way any well-managed business would in a soft cycle, we take a look at all of our costs and we reduced those in line with the market. We stay in close communication with our customers to understand their demand profiles.
“We have had some tough decisions to make, and we have had to take some difficult actions to prepare for the next up-cycle, but we have done these things. The main issue we addressed over the last few years was to improve service and support to our customers. We have made enormous strides. We have opened a state-of-the-art customer-care centre with an AOG response centre; we added more skilled people to our customer service and field service teams; we have expanded the use of our customer-support centres globally; and we invested in opening four forward-stocking locations.
“What we have tried to do in the downturn is double down on customer support, so customers can utilise the assets that they have as efficiently as possible.
“We are fortunate in that our customers are seasoned veterans of the oil-and-gas market and they have seen and survived ups and downs. They truly are remarkable people in how they can utilise and maintain the aircraft, and we work in partnership with them to make sure they are utilising the assets as efficiently as possible. In that sense we are remarkably lucky that we have customers that understand the business very well and we can help them to utilise those assets the best they can.”
HI: Do you see the S92 threatened by the super-medium market?
DF: “It is an interesting question. But overall, I can say no.
“Super mediums are new, and there are three OEMs deciding that there is a niche for an aircraft that size. On one hand it is a different aircraft; the super-medium will perform well on missions that require a certain payload range, but if that range is a little less or a little more you are best served by using a medium or heavy. Super-mediums are not a catch-all solution.
“It will be a competitive spot for us to be in. But when I look at what is important to customers, we have the right pedigree from an S92 perspective. It has more than 1.3 million flight hours, so you know exactly what you are getting. It was designed to operate in the oil-and-gas market.
“Every day the S92 gets up and goes to work on an offshore rig.
“It offers an unmatched cabin experience. It has a much larger than average cabin for the oil workers and delivers a service more akin to the flight experience they would expect of a commercial aircraft. You have a centre aisle, you can sit comfortably in your seats etc. The S92 also has a tried and tested safety record which gives it a leg up.
“The one area where you might have some concern is the cost of the aircraft, but we are working with our customers to make sure that, from the combined acquisition and servicing perspectives, the S92’s costs are and will remain highly competitive.”
HI: Will the S76 and S92 still be the main focus for Sikorsky going forward?
“Yes. We tend to focus on +10,000-pound aircraft – the higher end. The S76 and S92 will be the mainstays for our civil helicopters going forward. We have discussed with a lot of customers what they expect from aircraft in the future. We have also brought these discussions in-house within Lockheed Martin. The S76 and the S92 will be the backbone for our civil helicopters for at least the next few years.
“We pride ourselves on designing and building a quality product. On one hand we are fortunate because we have customers that really know how to maintain and operate aircraft. If we think about the way we design and manufacture aircraft, we do it with the intent that they will get out and go to work every day with no problems. Couple this with the operating and servicing knowledge of our customers and you have a great end-user experience.
“We have been collecting data on how the S92 operates and how our customers operate the aircraft, and we are now starting to use the data to really figure out how customers use them, how components can stay on the aircraft longer. And we are using data to predict when they actually need to come off.”
HI: Tell us about your decision to move out of the light-helicopter market.
“It started in 2016 when questions were being raised about what Sikorsky’s future should be and whether light helicopters should be factored into that future. At the time, I was not ready to make the decision as we were still rolling out light-helicopter parts to customers after we had moved those parts’ production line from one facility in New York to Pennsylvania.
“But as we started to solidify these deals and made sure the parts were still able to be sourced and delivered properly, we were then ready to make the decision. Honestly, our niche is in the larger-aircraft range, so it made sense for us to explore strategic alternatives for the light-aircraft range.
“We then sold off our S-300 light aircraft product line to Texan helicopter servicing group Schweizer RSG. It is a good home for the light helicopters; we know the Schweizer RSG team. They have a lot of industry knowledge and capability.”
HI: Real-time HUMS?
“It is a system that monitors the overall health of the aircraft in real time so that pilots and the people on the ground can receive warnings when issues might arise with the helicopter.
“The S92 already had a standard Health and Usage Monitoring System (HUMS), but Sikorsky, PHI and Outerlink Global solutions banded together to develop a real-time variant of that system. We had a good opportunity to work together and develop an innovative safety-tech solution for offshore oil and gas aircraft.
“About a year ago, we launched it at HAI and we started to see interest expand from initial installations in helicopter fleets off the Gulf of Mexico to then being introduced into some of Bristow’s fleet in the North Sea and now to fleets in Western Australia. In a couple of weeks’ time we are debuting the system in north-eastern Canada.
“The system itself adds situational awareness to the crew. It mainly does three things. Every 10 seconds it sends a signal back to the ground station which tells the people there the position of the aircraft and that all the systems are operating. It will also allow you to check up on the performance of components such as the gearbox after maintenance — if there is an issue with the aircraft, it will automatically send a signal down to the ground station so that ground staff can contact the pilots and let them know.
“The third benefit is the innovation, which provides additional corroborating information to what the crew is feeling: maybe they are sensing an aircraft vibration, but they are not sure where it is coming from. Now, with real time HUMS, they will know. Pilots are never alone in the cockpit with this system.”
HI: Will these result in a reduction in accidents?
“That is the goal. It is difficult to project exact figures, but that was the hope and the intent when we started developing the system. It increases the pilot’s situational awareness. The pilot will no longer be alone and, oftentimes, when we start to work on a new safety innovation we look backwards at prior incidents and ask whether, had the technology been in place, would the crew have made a different decision?
“It is a hard question to answer as there is normally a wealth of different variables involved in an accident. But it is always the goal as we take new steps to enhance situational awareness, safety of the aircraft and the operation of the aircraft. I think it holds the promise of reducing future incidents, and I think real-time HUMS will become industry standard.”
HI: A lot of manufacturers are looking towards the drone market, are you looking at the civil market?
“There is certainly a lot of attention and money being put into drone companies, but this market is very different from Sikorsky’s civil focus. We certainly have autonomy projects in the works but, for Sikorsky’s civil business, we are not going into drones specifically.
“We are working to make aircraft safer and easier to operate so as to reduce incidents. And autonomy is definitely a part of this. We have SARA (Sikorsky Autonomous Research Aircraft) which is fitted with our MATRIX autonomy software which is being tested right now.
“We are starting to install MATRIX technology into our S92 helicopter and some of our military products now, allowing aircraft to fly with one, two or no pilots. This is the path we are heading down as opposed to drones.”
HI: Are you seeing much Latin America growth?
“Yes, we are starting to see signs of growing activity in a number of different regions, especially Mexico. The country is offering up new off-shore blocks, and a good many international oil companies are moving into the region.
“We have a few S-76’s operating there now, and had the S-92 certified in Mexico last November. We wanted to position ourselves to be able to support the market and be ready to serve the coast of Mexico. We definitely see growth there.
“We also just saw the retendering of the Petrobras contract in Brazil where the S-92 did very well, so we were happy about that. And we are seeing increases in other growth regions such as Australia.”
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