Town Hall: Three key markets drive growth, says Airbus
Three key markets are driving sustained growth in Airbus Helicopters’ order book, while two operators report a return to near pre-Covid levels of business, according to the recent Helicopter Investor Town Hall online meeting.
Will Fulton, head of Marketing with Airbus Helicopters North America, identified the key markets as airborne law enforcement, private and business aviation and medical transport. “The first one we are seeing from an aircraft replacement standpoint and a capability increase is the airborne law enforcement market,” Fulton told Town Hall delegates.
Last year, the global pandemic put replacement budgets “under strain”, as funds were relocated to cope with Covid-19. “Now, in 2021, we see this market coming back,” he said. “They are not cancelling these enquiries, they are actively level setting and we are seeing more bookings and orders happening earlier in the year, which is exciting for us.”
In the OEM’s private and business helicopter sector, customers’ growing interest in avoiding commercial travel helped to blunt the impact of the pandemic. “Even last year, this sector [private and business aviation] was able to sustain itself,” said Fulton. “Enquiries grew, which was probably driven a lot by travel autonomy and [the need] to be able to go where these corporations and private individuals wanted to go, when they wanted to get there.”
A key trend this year was interest from new entrants to the market – particularly in the company’s twin engine H145 helicopter, which has gained full FAA certification, he added.
The other big sector for Airbus is the air medical segment. “In North America, there are a couple of very larger players,” said Fulton. “As their aircraft age, we are looking for advanced capacity growth with those replacement strategies.”
Airbus was benefiting not just from replacement growth, Fulton said. “We are seeing market growth, with the opening of new helicopter bases, beyond pre-Covid levels, with utility [sector] also picking up.” But it was the main three sectors – private and business aviation, law enforcement and helicopter emergency medical services (EMS) – that “rotated around” in importance.
‘Opening of new helicopter bases’
The prospect of new helicopter sales was welcomed by Emmanuel Dupuy, president of helicopter broker and Town Hall sponsor Aero Asset. “I’m excited about Airbus looking to sell a lot more EMS and VIP aircraft in the near term,” said Dupuy, who hosted the Town Hall. “It probably means that some pre-owned machines will be entering the market. And, as a pre-owned sales specialist, that’s very good for us.”
More good news came from Francesco Lazzarini, chief operating officer with North American operator HeliFlite. “The VIP segment for the north east [of America] has definitely bounced back. We are experiencing 90% of what [business] we were seeing in 2019. We also see that in aircraft sales when it comes to helping our clients.” Lazzarini reported that the uptick in business seen at the end of last year – due to US fiscal policy – is continuing this year. “This is true for state-of-the-art equipment in two types – the AW139 for the standard VIP corporate mission and the DH145 for the VIP and yacht mission.”
Andrew Collins, president and CEO of Sentient Jet, estimated his company’s rotorcraft business had returned to 75% to 85% of pre-Covid levels. Revenue hours in the north east of the US had been impacted by poor weather. Also, the business was highly seasonal in nature.
But Collins remained optimistic about the longer-term prospects for both helicopters and fixed wing aircraft. “I’m bullish on both [aircraft types]. The fixed wing sector is jumping ahead and you are starting to see fixed wing business increase in Europe [as well as the US]. We probably have a good solid 12 months of demand generation and capacity usage about to occur in both sectors [fixed wind and rotorcraft].”
‘A good solid 12 months of demand generation’
Lazzarini, from HeliFlite, predicted next year would see a full return to the business patterns established before Covid-19. “In the longer term, 2022 and beyond, we are going to regain the growth curve that we have been on for the past four, five or six years,” he said. “That will see high single digit growth to low double digit growth year-on-year in flight hours and corresponding revenues.”
Aero Asset’s vice president of Sales Will Sturm told Town Hall delegates the company’s recent second quarter Heli Market Trends report revealed 15% stronger pre-owned twin engine helicopter sales volume in the first half of 2021. Inventory shrank as the supply of helicopters for sale fell by 10% year-on-year. Light twin engine retail sales soared by nearly 40% in the first two quarters of 2021 and medium twin sales by 25%. But heavy helicopter sales slumped.
North America led transaction volumes accounting for half of global preowned twin engine helicopter transactions in the first half of this year, said Sturm. VIP configured helicopter sales volume saw an increase of 40% year-on-year.
Lazzarini, from HeliFlite, summed up on a philosophical note: “It looked as if the world was going to end [at the start of the global pandemic]. But it just fell asleep for five minutes and now seems to be back.”
The Helicopter Investor Town Hall online meeting, sponsored by Aero Asset, took place on Thursday July 15th, 2021. You can watch the meeting here or listen to the podcast here. The latest insights from leading figures in the global helicopter industry will be available from our conference Helicopter Investor London 2021, which takes place on September 28th and 29th.
Meanwhile, to download Aero Asset’s Heli Market Trends report click here.
Contributors:
- Andrew Collins, Sentient Jet
- Emmanuel Dupuy, Aero Asset
- Will Fulton, Airbus Helicopters North America
- Francesco Lazzarini, Heliflite
- David ‘Spike’ Whiting, Eagle Copters
- Will Sturm, Aero Asset.
Airbus’s H145 helicopter is attracting interest from new entrants, says the manufacturer’s Will Fulton.
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