LCI and SMFL order 14 Airbus helicopters to secure supply


LCI and Sumitomo Mitsui Finance and Leasing have ordered 14 new helicopters from Airbus as the leasing joint venture tries to guarantee supply.

It is made up of a mix of light twin H145, medium twin H160 and super medium H175 helicopters. They have also agreed seven options.

At least seven of the helicopters will be delivered before the end of 2025. The rest are due before 2028. They are expected to be used in a range of missions including emergency medical services, search and rescue and offshore energy, including wind.

“Lessors are also competing against increased government and military demand for new production capacity,” Jaspal Jandu, CEO of LCI tells Helicopter Investor. “This order enables LCI to secure and offer some of this capacity to the commercial market.”

LCI and SMFL already have 40 Airbus helicopters in their combined portfolio. They are deployed by 12 operators in more than 10 countries.

“This substantial new helicopter order from LCI and SMFL marks the next exciting phase of our Flight Path partnership and aims to provide the required support, at the substantial scale needed, to the mission-critical sector,” said Bruno Even, CEO of Airbus in a statement.

“With our combination of technical and financial innovation, and market knowledge and presence, I’m confident there will be many more chapters to come.”

LCI and Airbus announced their “Flight Path” partnership at VAI Heli-Expo in February. The two companies said they would combine knowledge, experience and analysis. LCI agreed to take delivery of at least seven Airbus helicopters to LCI by 2025 and ordered five new Airbus H145 helicopters. These were all added into LCI’s joint venture with SMFL.

“It is also vital that lessons are learned from the last order cycle in 2010-2015”

In February LCI placed 10 firm orders with Leonardo. It also agreed 11 options.

“A wave of helicopter replacement activity, coupled with new capacity to accommodate growth, is driving up demand for new helicopters,” says Jandu. “LCI is seeing that growth across many sectors, in particular emergency medical services and energy services, including offshore wind, across all regions of the world.

“Supply remains tight as OEMs navigate supply-chain and production constraints, whilst the secondary market, particularly leasing companies, is also short of available capacity. It is this demand and supply imbalance that our order is designed to address.”

Jandu highlights the emergency medical services (EMS) market. Manufacturers delivered about 125 helicopters per year on average between 2009 and 2018. Between 2019 and 2023 this fell to just 96 units per year.  Offshore energy deliveries have fallen from 61 helicopters on average from 2009 to 2018, to about 21 units per year from 2019 to 2023.

“Parts of the helicopter industry are characterised by elastic demand and relatively inelastic supply, and this introduces natural leads and lags into the system. The 2015-19 downturn was characterised by relative over-supply, whilst the post-Covid period from 2022 onwards has been characterised by relative under-supply, even more so recently as demand requirements have quickly ramped up,” says Jandu.

“Financial prudence from operators and end users led to a reduced level of orders and deliveries from 2015 to 2023, resulting in a significantly shifted helicopter replacement cycle.”

Jandu says the size of deals is also rising as new helicopters – particularly larger twin-engine models – are becoming more expensive due to recent inflation and manufacturer issues.

He says operators also want new avionics, night-vision capabilities and communication systems.

Jandu says that lessors should not get carried away with orders. “It is also vital that lessons are learned from the last order cycle in 2010-2015,” he adds. “This includes a need to order and deliver helicopters in a more disciplined and pragmatic manner over periods of time which allow for appropriate market absorption.”