17-Feb-2012 Source: Honeywell
In its 14th Turbine-Powered Civilian Helicopter Purchase Outlook report, Honeywell (NYSE: HON) expects global deliveries of new civilian-use helicopters will increase to 4,700 – 5,200 over the five-year period 2012 â€“ 2016.Â The forecast shows slower near term economic growth prospects in key markets have added uncertainty to operator purchase plans this year, however, recent order momentum and strong purchase plans for 2012 bolster the near term outlook.
Recent order rates have been healthy and near term purchase plans remain strong despite lingering tight credit conditions and significant inventories of used current production models for sale which continue to overhang the industry.Â Concerns over slow economic growth in Western economies has increased the level of uncertainty in purchase plans past 2012 leading to a six point reduction in global purchase plans compared to last year.Â Based on the timing of purchase plans in the operator survey, and the delivery momentum expected this year and next, the outlook still calls for overall industry growth for the five year period 2012 – 2016 compared to the previous five year period.Â Over the longer term the China market could be a strong contributor to broader demand for rotorcraft as the country opens its airspace to civil helicopter operation and begins production of indigenously-designed civil turbine-powered rotorcraft.
Global five-year fleet replacement and expansion plans decreased to 19 percent in 2012, off six points from 2011.Â Although total five year buying plans are lower, specific purchase plans for 2012 remain very strong.Â Relatively lower levels of planned purchases were concentrated in 2013 and beyond, leading to the expectation that these plans could strengthen materially over the next few years should political and general economic conditions improve as projected.Â Higher purchase plans in Asia helped offset some of the softness in other regionâ€™s survey expectations.Â Purchase plans in major U.S and European centers of demand declined this year by five and eight points, respectively.Â Other regions also declined moderately compared to 2011 though their purchase plans remain above the world average rate.Â Specific purchase plans just for 2012 remain strong at similar levels seen in the 2011 survey.Â Expectations for new aircraft ordering in 2012 is up over 30 percent compared to 2011 levels, suggesting the recovery will maintain momentum this year.
Global five-year demand for new turbine-powered helicopters is split almost 50-50 between the Americaâ€™s and the rest of the world.Â Latin America and Asia have the highest fleet replacement and expansion expectations of all regions.Â In terms of projected regional demand for new helicopters, Latin America and Asia tied for the worldâ€™s third largest regional market, following North America and Europe.
Reasons for Replacement
Operators who indicated the intent to replace a currently owned helicopter with a new one within the next five years cited â€œage of current aircraftâ€ or â€œnormal planned or contracted replacement cycleâ€ as key drivers for their decision.Â This rationale is commonly seen in every survey.Â Other most frequently mentioned reasons for purchasing a new helicopter in the 2012 survey included lower maintenance costs, warranty coverage, parts availability, and improved reliability/durability.Â The stronger emphasis on maintenance, operating costs and warranty coverage is a departure from recent surveys which focused more on performance improvements in speed, payload, range and newer technology avionics systems, and likely reflects the slow economic environment faced by many operators.
Operator Preferences by Class of Helicopter
Light single-engine helicopters continue to be the most popular product class for five-year fleet replacement and expansion.Â Forty-five percent of all make/model mentions were for single-engine models in the 2012 survey, down slightly from the five-year average of 49 percent but in line with 2011 findings.Â The most frequently mentioned light-single models were AS350B series, Bell 407 and Robinson R66.Â Light-single helicopters had the highest concentration of regional purchase interest in the Americas, while purchase interest was lower in Europe, Asia, the Middle East and Africa.
Intermediate/Medium twin-engine helicopters were the second most popular product class mentioned for purchase during the next five years.Â Approximately 31 percent of total survey mentions were for Medium twins.Â The most frequently mentioned models were AW139, Bell 412 EC145 and Sikorsky S76 series helicopters.Â The highest concentration of demand for medium twins were measured in the Middle East / Africa, Asia and Latin America.Â Between 40 percent and 50 percent of all make / model mentions in Asia and Middle East / Africa were for medium twins.
The third most frequently mentioned product class was Light twins at 21 percent of all make/model expectations.Â The EC135, Bell 429 and A109 series helicopters were most frequently mentioned for five-year purchase in this class.Â Light twins appear to be most popular in Europe and to a lesser extent in the Americas.Â In Europe, Light Twin models accounted for 38 percent of total mentions.
In the 2012 operator survey Heavy Multi-Engine helicopters enjoyed a noticeable increase in interest.Â This class of helicopters typically garners a small share of overall purchase plans due to the cost and specialized nature of the aircraft.Â 2012 is no exception as purchase plans rose more than a full point and overall share of projected demand increased to nearly three percent.Â Within the heavy helicopter class the most frequently mentioned models were the EC225, the Mi-171and the S-92.Â Various Russian models accounted for nearly four percent of the purchase plans in this class.
The vast majority of global civil helicopter mentions were concentrated in products manufactured by three OEMs; Eurocopter, Bell Helicopter and AgustaWestland.Â Less than 17 percent of mentions were for helicopters manufactured by all remaining OEMs.
In this yearâ€™s survey, Honeywell asked all respondents to indicate their “current” satisfaction over the last year with each model of aircraft they operate.Â Respondents answered the question, â€œHow likely is it that you would recommend this model to a friend or colleague?”Â Listed in alphabetical order, the top five make/models with the highest net scores in this yearâ€™s survey are:
â€¢ A109 Power
â€¢ Bell 407
â€¢ Bell 429
â€¢ EC130 /EC350 series
These five models account for more than 45 percent of all survey make/model mentions and can be considered the top current production helicopters in terms of recent customer satisfaction attitudes and likelihood to promote.Â There were many other make/models currently in production that also received excellent scores that did not make it into the top five listing.
Helicopter Utilization Expected to Increase
Plans for increased helicopter fleet utilization in 2012 were reported by operators in all but one region.Â Planned increases in each region were:
â€¢ North America:Â 14% of operators planning increases, and only 4% planning decreases
â€¢ Europe :Â 18% of operators planning increases, and 12% planning decreases
â€¢ Latin America:Â 32% of operators planning increases and only 2%Â planning decreases
â€¢ Middle East / Africa:Â 26% of operators planning increases and only 4% planning decreases
â€¢ Asia:Â 19 % of operators planning increases, and 9 percent planning decreases
The Latin American region reported the highest average utilization last year (in 2011).Â In a reversal of 2010 activity levels, Middle East / African operators reported the lowest average utilization last year, likely affected by the ongoing political instability in the region.Â When examining utilization trends across usage segments, oil and gas had the highest at an average of approximately 600 hours per aircraft followed by Emergency Medical Services at approximately 445 hours and several other end use sectors at around 400 hours.Â The lowest average utilization was reported by corporate segment operators at less than 300 hours per helicopter.
Civilian Turbine Helicopter Survey
The 2012 Turbine Powered Civil Helicopter Outlook is based on Honeywellâ€™s recently conducted customer expectations survey, an assessment of consensus forecasts, a review of factory delivery rates and analysis of future new helicopter introductions.Â The 2012 outlook excludes uniformed military demand for civil helicopters, but resulting civil estimates do include government and security force demand.
This yearâ€™s survey queried more than 1,000 chief pilots and flight department managers of companies operating over 2,450 helicopters worldwide.Â The survey excluded large fleet or â€œmegaâ€ operators which were interviewed separately.Â The input received from the large oil and gas support and EMS fleet operators is factored into the overall outlook in addition to the individual flight department responses.Â The survey detailed the types of aircraft operated and assessed specific plans to replace or add to the fleet with new aircraft.
The 2012 outlook presents a snapshot of the helicopter business at a point in time and reflects the current business and political environment.Â It does not reflect unforeseen events such as an unexpected economic downturn, the impact of government stimulus programs, sharp increases or decreases in fuel costs, a fuel availability crisis, imposition of heavy user fees or other unfavorable regulations/taxes that could affect results in future years.Â Nor does it include speculation of aircraft manufacturers to offer discounts or raise prices, which can have a significant influence on sales activity of affected models.
NOTE:Â the ongoing political instability in the Middle East and recently lowered economic growth projections for Western economies in the near term was factored into the current survey and forecast results.Â Demand for civil rotorcraft is also potentially sensitive to fuel price volatility and possible supply disruptions.
Honeywell International (www.honeywell.com) is a Fortune 100 diversified technology and manufacturing leader, serving customers worldwide with aerospace products and services; control technologies for buildings, homes and industry; automotive products; turbochargers; and specialty materials. Based in Morris Township, N.J., Honeywellâ€™s shares are traded on the New York, London, and Chicago Stock Exchanges.Â For more news and information on Honeywell, please visitÂ www.honeywellnow.com.
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