Helicopter Investor London 2023 DAY 2 – LIVE


Welcome to the #HelicopterInvestor23 Day Two Live Blog. 

#HelicopterInvestor23 is well underway at the Royal Garden Hotel, London. Check back here throughout the event for updates and highlights.

#HelicopterInvestor23 – Frank Liemandt, show director, EUROPEAN ROTORS asks what challenges stand in the way of electric aircraft.

Richard Brown, founder and chief technology officer, Sophrodyne Aerospace says: “The challenge is meeting the regulatory demands. The devil is in the details and regulators have to nit-pick through these details to ensure the aircraft can operate safely under all possible conditions.

“The regulators have a really tough job because they have to decide what kind of animal they’re dealing with, and the zoo doesn’t make it easy for them either.”

#HelicopterInvestor23 – Will electric vertical aircraft takeover from helicopters in the next few decades?

Nigel Leishman, executive vice president and global head of Marketing, LCI doesn’t think so. “We have a very stable and developed helicopter industry already,” he says. “I really don’t see a widespread replacement of helicopters by eVTOL within the next 20 years, but we are going to see the adaptation of these technologies.”

#HelicopterInvestor23 – We have reached the final panel of this year’s Helicopter Investor!

Moderated by Frank Liemandt, show director, EUROPEAN ROTORS, the panel will debate whether the future is electric.

#HelicopterInvestor23 – Asked if certification is the main hurdle for electric vertical aircraft, Washecka says: “I don’t think it’s the main barrier. The main barrier is the market.”

He adds: “Certification is obviously something you have to get through, and if you can’t get certified you’re going to change the design and ultimately get something certified. But once you get certified, so what? You still need a market who wants to buy it.”

What does the landscape for 2030 look like? He says: “Some of these new entrants will have gotten some level of certification, but I think many of them will have failed. The US government, and other governments, will be using these aircraft on the battlefield, maybe there will also be drone deliveries of burritos to your house, but it won’t be for anything other than the optics of it.”

#HelicopterInvestor23 – A few insightful audience comments on Ed Washecka’s panel about learning from the past.

A delegate named ‘Clark’ says: “Those who do not learn from the past are condemned to repeat it.”

A delegate named ‘Nostradamus’ says: “Those who learn from the future are prophetic.”

Deceased astrologers aside, Washecka is asked how worried he is following the Silicon Valley Bank collapse. “Not at all,” he says. “But I’m also not someone who keeps $200m in the bank.”

#HelicopterInvestor23 – Ed Washecka, CEO, Race Aviation Partners joins us now to talk about growing through a boom and lessons for electric vertical aircraft.

He is discussing whether you can avoid bandwagons when everyone is jumping on them. “I know it sounds bad, but if everyone is doing it, is that then the market? If everyone stops manufacturing buggy whips, you might start manufacturing cars, too,” he says.

#HelicopterInvestor23 – Grant Newman, CFO, Elroy Air is now taking the stage to discuss rethinking cargo.

He says the company’s mission is to enable same-day shipping to every person on the planet.

The Elroy Air Chaparral aircraft will serve multiple sectors, including a $135bn commercial market, a $7bn defense market and a $3bn humanitarian market, he says.

The Chaparral aircraft is estimated to cost around $3m, with commercial deliveries expected from 2025.

#HelicopterInvestor23 – Sustainability efforts are set to ramp up in Brazil, which could see some doubt cast on the industry.

Servera says: “There is a big flag on this new government to go big on sustainability. Policies are still being made at the moment so we don’t know what will happen, but I do expect that will affect the industry.”

#HelicopterInvestor23 – Aside from the onshore sector, helicopters are also used for military uses.

Joao Paulo Servera from Veirano Advogatos says the Brazilian military is “demanding a lot of aircraft”.

He says: “The military made a big investment about 15 years ago, and they’re investing more again now. It’s a cyclical thing, and the fleet has been long due a renewal.”

Interestingly, the firefighting sector does not have a high demand for helicopters in Brazil.

Eric Bailleul from Rotortrade says only 1% of the overall fleet can be dedicated to firefighting.

#HelicopterInvestor23 – So how is Brazil’s infrastructure set up to deal with this huge fleet?

Joao Paulo Servera, partner Aviation and Aircraft Financing, Veirano Advogatos says that cities like São Paulo are filled with infrastructure and helipads, and although the countryside isn’t as developed, there is still enough to meet demand at the moment.

He thinks that the noise associated with helicopters and helipads is more culturally accepted in Brazil.

“The cities where helipads are more densely concentrated are big and very loud already,” he says.

Eric Bailleul from Rotortrade agrees. “It’s a different culture,” he says. “Also, the people who are flying in Brazil are the kind of people who are at the top of the economy, so they tend to have their own permits.”

#HelicopterInvestor23 – How big is the fleet in Brazil? Eric Bailleul, sales director for Spain and Portugal, Rotortrade says: “Onshore there is a fleet of about 1,000 which is huge. Offshore I think it’s around 150, and this number is ramping up.”

Aoife Considine, vice president of Fleet Management and Finance at offshore-focused firm CHC says: “Offshore is a bit smaller than the onshore fleet, but the market has changed over the last 18 to 24 months. Before that, CHC had actually made the decision to pull out of Brazil, but due to the huge change in the market we’ve seen we’re still there today, and we see large growth to come over the next few years.”

#HelicopterInvestor23 – We are back from lunch and talking about the helicopter market in Brazil, with Aoife Considine from CHC, Eric Bailleul from Rotortrade, and Joao Paulo Servera from Veirano Advogatos.

#HelicopterInvestor23 – Freshta Farzam, CEO and founder, LYTE Aviation joins us now for a fireside chat, where she unveils the design of the new LYTE aircraft.

The 40-seater eVTOL, which will weigh around 17 tons, will have a speed of 300km/hour, a range of about 1,000km and a duration of two to three hours. The aircraft is expected to have a 4.5 ton payload.

On timeline for the aircraft, she says: “We are planning, over the next two years, to set up the first full-scale prototype. What we’re doing is using a lot of existing technologies. It’s going to take a few years for certifications, but we’re hoping to launch it by 2030.”

#HelicopterInvestor23 – A member of the audience asks: “When making decisions between helicopters or vessels during the O&M life cycle, how do you rank the importance of cost efficiency, reliability, safety and environmental impact?”

Lee Harris, Vattenfall says: “You have to look at the whole package, that’s what’s being done on a daily basis.”

In terms of costs, Vattenfall says it can be difficult to argue the case of needing helicopters to those outside the industry. “We as an industry know how helicopters can improve productivity. But there is a cost implication to building a heli-deck on a wind turbine.

“Quantifying the benefit of that is difficult to do,” he says. “We need to simplify that for the renewable energy companies if we want to have helicopters out there in offshore wind.”

#HelicopterInvestor23 – Moving on to our next panel about the demand for helicopters in the offshore wind sector.

The panel host, Steve Robertson, director, Air & Sea Analytics asks how helicopters fit into the pipeline of wind farms.

Lee Harris, senior aviation lead, Vattenfall says: “There are different types of helicopter operation used to support our activity. In crew change operations we need helicopters. There is going to be a doubling of demand in wind farms by 2030, so that demand will continue to be quite strong. Then there’s the operational and support operations, and the maintenance operations.”

However, Harris says the market is challenging. “Turbine technology is changing,” he says. “We don’t know how reliable or accessible wind turbines are going to be in the future.”

Regis Magnac, vice president head of Energy, Leasing and Global Accounts, Airbus Helicopters says: “If wind farms continue to develop they will go further offshore. What we’re trying to do right now, including at this conference, is tell the market we believe this is the productivity you will need tomorrow, so get ready for it today.”

Bernd Brucherseifer, co-managing director, HTM adds that helicopters can help ease labour problems. “The biggest bottleneck is labour,” he says. “The cost of labour is a big issue, and there are already problems [due to the working conditions offshore] with getting technicians. It needs to be more flexible. I think that’s where helicopters can come into play.”

#HelicopterInvestor23 – While passenger service is a big part of Blade, the medical arm of the business is “really important”, says Tomkiel. “It’s 50% of our business. We’re the largest provider of air transport for human organ transplant in the US,” she says.

#HelicopterInvestor23 – When will eVTOL enter commercial service? Blade’s Tomkiel says by 2025.

“That’s what the industry is saying,” she says. “Everyone in this room probably thinks that’s unrealistic, and I know that some of the biggest and best manufacturers in the world are having trouble getting traditional aircraft certified right now. But 2025 is what the industry is saying for a piloted small craft.”

#HelicopterInvestor23 – Having gone public almost two years ago, Tomkiel addresses how Blade has changed.

“It’s been a very busy couple of years and we’ve grown tremendously,” she says. “To put some figures to that, the year before we went public we were a $3m company, and in 2022 we were a $150m company.”

So what have been the biggest difficulties in going public? Tomkiel says: “There have been a lot of ups and downs. We have had to build the infrastructure that’s required for a public company which takes some heavy lifting. It’s a lot, but it just makes us stronger and better.”

#HelicopterInvestor23 – After a quick coffee break we’re back and having a fireside chat with Melissa Tomkiel, president and general counsel, Blade Urban Air Mobility, talking about how Blade has diversified.

Tomkiel explains how Blade is helping passengers travel while cutting time and price for the customer. “If you take a typical drive from Manhattan to JFK, that can be well over an hour. We’re providing a six minute flight. We truly view ourselves as ground [travel] competition.”

#HelicopterInvestor23 – Are lessors being too conservative on new acquisitions that must be backed by a contract with long lead times from OEMs?

Uplifting Advice’s McGinn doesn’t think so. “No. It’s like that saying, the burned child fears the fire.”

#HelicopterInvestor23 – Another audience question: “What market is most likely to see consolidation over the next year?”

Clark McGinn, Uplifting Advice says: “Brazil, obviously. The UK, please God, one day.”

Oliver Althoff, Seabury Capital adds: “I think from an end-use market, the firefighting and utility market. There might well be consolidation for efficiency in the MRO sector.”

#HelicopterInvestor23 – A great question from the audience on whether the entry of the lease market has reduced barriers to entry and led to increased operators and reduced prices in the energy market.

Oliver Althoff, Seabury Capital responds: “That was certainly the case in 2012, 2013 and 2014. Everybody was storming the hill and trying to get to revenue growth. I think that era is over and you now have to show profitability and remain on that track. I think that has fundamentally changed.”

#HelicopterInvestor23 – Time for the third panel of the day, ‘Is consolidation here to stay’, with Oliver Althoff, Seabury Capital and Clark McGinn, Uplifting Advice.

Oliver Althoff, managing director, Seabury Capital says: “I think we’re transitioning out of having transactions out of necessity, and we are moving into an area where there is going to be transactions of choice, because people are finally in a position to want to do that.”

Clark McGinn, principal, Uplifting Advice agrees, adding “we have to have rational consolidation”.

#HelicopterInvestor23 – Asked about Bristow’s profitability target, Bradshaw says: “Long-term, we think this business and businesses like ours should be a healthy generator of cash flow through cycles, and we think that really needs to be above one’s cost of capital – which is an extremely basic statement that hasn’t been demonstrated in this industry in eight years, but it needs to be.”

#HelicopterInvestor23 – Again, eVTOLs are a hot topic. Talking about when Bristow could adopt eVTOL, Bradshaw says: “The best case scenario is that these products won’t be certified until 2024 or late 2024. We are realistic about that.”

He adds: “We do see cargo applications being useful and likely accepted earlier in Europe, in the UK, in the US.”

#HelicopterInvestor23 – For our next panel, Chris Bradshaw, president and CEO, Bristow Group joins us to discuss the changing market.

Speaking about manufacturing, Bradshaw says: “You can’t manifest helicopters and their parts.”

#HelicopterInvestor23 – Is there any interest for eVTOL operations? The panel answers “no”. Olivier Piot, Nova Capital says: “No. We are monitoring this to see if this potentially impacts the residual value of the asset. Maybe one day, but there is a consensus that in the medium term there might be eVTOLS sitting next to our helicopters.”

Marc Schechter, Thora Capital agrees on eVTOL. “Its certainly the hot, shiny thing right now, but for what we do, no,” he says. “It’s developing right now, and my investors want a return today. There’s no view for a return today, or quite frankly a short-term return.”

#HelicopterInvestor23 – Asked whether he is seeing any changes in lessee behaviour based on a shortage of available assets for operators, Marc Schechter, managing director, Thora Capital says: “We are certainly seeing the ability to be price setters and to dictate terms to lessees that frankly we probably couldn’t have in the recent past.”

#HelicopterInvestor23 – Welcome back to day two of Helicopter Investor London! Our first panel today, chaired by Jim Janaitis from Baker Donelson, is focusing on Rotary Leasing in 2023.