HI Uplift: UK competition watchdog CMA probes Macquarie deal

The CMA has promised to reach a Phase 1 decision by December 3rd, 2025. (Photocredit: Shutterstock).

We can only hope that the UK Competition and Markets Authority (CMA) has got a better crystal ball when considering the acquisition of Macquarie Rotorcraft by SMFL. In 2021 the authority blocked the merger of CHC and Babcock International’s offshore business because it was not happy with the UK offshore helicopter market going from four operators to three. It confidently predicted that there would be no new entrants to the market.

“Our view is that the combination of a decline in the industry to date, an unclear path to recovery of the O&G [oil and gas] market, alongside low margins and significant barriers to entry, means that it is unlikely that new entrants will be looking to enter the market in response to the merger or that there will be significant expansion of suppliers in the market,” said its report published on June 1st, 2021.

It was an accurate prediction – for four months. In October, Gama Aviation and Peter Bond launched their joint venture.

“Let’s hope that the CMA does a better job this time than the CHC/Babcock fiasco,” is the first reaction of Clark McGinn, founder of the rotary consultancy Uplifting Advice and a former vice president at Waypoint Leasing (which was acquired by Macquarie in 2018).

The CMA revealed on Tuesday its decision to investigate the proposed Macquarie acquisition prompted by concern it may damage competition in the UK market. The regulator said it is considering whether the completed transaction “will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services”.

‘Completely separate business’

With an official investigation now under way, both companies are understandably guarded in their reaction to the news. A spokesperson for SMFL LCI Helicopters Ltd told us: “We continue to co-operate with the CMA as they complete the review process. In the meantime, Macquarie Rotorcraft will continue to operate as a completely separate business.” 

A spokesman for Macquarie Rotorcraft told us the business is actively co-operating with the CMA but is unable to comment on an open investigation. 

“The worry the CMA will have is LCI/SMFL’s aversion to leasing into the North Sea for OGP [oil and gas producers] crew change – with all the strategic controversy at government level about the future of oil and gas, reducing competition for helicopter services is a hard proposition,” says McGinn. “You can bet the oil majors will be yanking that chain, as they did against CHC.”

Consolidation is important for market stability, he continues. “I’ve always said that the perfect market dynamic in a region for helicopter operators is two major competitors plus a smaller ‘swing’ player to keep the big guys honest. That model works for global helicopter lessors too.”

‘A big issue’

Much rests on the CMA decision. “Since Macquarie is reported to be looking to exit its large, fixed wing lessor, a knock back by CMA would be a big issue,” he says

A harsher assessment was delivered by one former senior leasing executive: “It looks like a complete waste of time.” In this exec’s view: “The decision to investigate the acquisition is another example of government bureaucrats trying to justify their existence with a pointless exercise looking for a problem that does not exist”.

Whatever the outcome of the investigation, it would have negligible impact on the UK/European helicopter industry. “But it may slightly dampen investor interest in the UK market given the CMA’s track record on mergers,” the exec added.

Returning that potent CMA phrase “lessening of competition”, this process may not be intrinsically bad, according to Sara Dhariwal, principal aviation analyst and lead appraiser – Helicopters & AAM at consultancy Cirium Ascend. “In some instances, it can bring increased stability by reducing price wars and extreme fluctuations,” Dhariwal writes on Helicopter Investor’s LinkedIn social media platform. “Stability can support the sector recover further, as the market can focus more on improving efficiency, terms and process rather than outdoing competitors.”

Ultimately, the CMA has an important decision to make. “Striking a balance between healthy competition and collaboration is key for ensuring overall economic growth and industry welfare,” she comments.

The plan to acquire Macquarie Rotorcraft, the helicopter leasing division of Australian bank Macquarie, was revealed in March when the joint venture between Sumitomo Mitsui Finance and Leasing Corporation and LCI revealed it had agreed to buy the business for an undisclosed sum.

Macquarie Rotorcraft has a portfolio of about 120 helicopters. The fleet operates in offshore transport, emergency medical services (EMS), search and rescue (SAR) and utility markets.

Commenting in March, the joint venture partners said: “Through this acquisition, we aim to further expand our business and customer bases and establish a strong position in the helicopter leasing industry, where demand is expected to grow.”

Damaging competition

The CMA certainly has form when it comes to blocking deals it judges may damage competition. After CHC Group purchased Babcock International’s offshore oil and gas aviation business for £10m in September 2021, the regulator intervened on competition fears to force the divestment of the UK portion of the business. 

The watchdog subsequently ordered CHC to sell the UK portion of the business. In 2023, CHC sold the UK-based helicopter business (known as Offshore Helicopter Services UK) to the South African firm Ultimate Aviation Group. But CHC was permitted to keep Babcock’s former offshore aviation operations in Australia and Denmark.

The CMA has invited industry comments on the transaction to be received by Tuesday, October 21st. It has pledged to reveal a preliminary decision by Wednesday, December 3rd.

It may be noted that since the announcement with Macquarie, two leasing companies have been launched.

Meanwhile, what’s your view? Will the CMA’s latest investigation prove to be a case of déjà vu – all over again? Will history repeat itself? And should there be more than one competition authority in each country? Share your thoughts with our readers here. 

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HI Uplift Dashboard: Helicopters for sale

Multi engine

• Total for sale/lease: 271 – three fewer than last week
• Percentage for sale/lease: 3.57%
• Absorption rate: 3.92 months
• Total fleet: 7,595 – 15 more than two weeks ago.

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Single engine

• Total for sale/lease: 434 – one more than last week
• Percentage for sale/lease: 3.72%
• Absorption rate: 3.78 months
• Total fleet: 11,653 – 14 more than last week.

 Source: AMSTAT, October 10th, 2025.