So far 2015 has been a difficult year for anyone in the rotorcraft industry, with military markets still flagging and the previously robust civil segment now similarly depressed. And even the oil and gas sector – for so long a cash-cow for helicopter manufacturers – has tanked this year on the back of falling crude prices.
Airbus Helicopters, arguably the market leader in the civil and parapublic space, is not immune from the downturn, admits executive vice-president global business and services Dominique Maudet. The Marignane-headquartered manufacturer saw a drop in orders and deliveries between 2013 and 2014, and that has been replicated again this year, he says, with first quarter deliveries down to 62 units, against 74 for the same period a year earlier.
“It is a less attractive market at the moment,” admits Maudet, although he notes that Airbus Helicopters is maintaining its market share of slightly above 40%. In addition he sees general signs of economic improvement and expects a European “bounce back” in late 2015 or early 2016.
The causes of the current malaise are several. In Europe and the USA, economic austerity plus market saturation – all the helicopters sold for public service missions over the last 10 years are yet to require replacement – have combined to dampen demand. And although there are signs of a tentative economic recovery in the USA, with the nation’s GDP growing by 2.4% last year according to official figures, this has yet to spark the market into life. There are plenty of potential customers, but translating those leads into sales is proving tricky, admits Maudet. “You look at the number of people who are getting to the final deal and are buying – there are lots of people abandoning on the way.”
There is, he says “a lack of confidence in the future”. Europe’s continued economic torpor has been exacerbated by security worries – notably around Ukraine, with the ripples from the simmering conflict in the east of the country spreading out to Russia in the form of political tension and economic impact from the effects of sanctions and a tanking economy. Airbus Helicopters has been affected by the situation in Russia too, with operator UTair, one of the biggest customers for the new H175, delaying indefinitely deliveries of the new 7.5t rotorcraft.
And China, for so long the great hope for all of the West’s business and general aviation industry, has failed to grow at a pace matching manufacturers’ hopes. Although the country was Airbus Helicopters’ second biggest market in 2014 from a unit sales perspective, the slow pace of regulatory and airspace reform is acting as a brake on more explosive growth. “The [Chinese] market is not yet at the right speed,” says Maudet.
On top of that, of course, are the problems in the oil and gas sector. For a considerable time the offshore resources market was a steady source of income for Airbus Helicopters and its rivals, but with the price of crude plunging to around half its previous value – Brent Crude was trading at $63 per barrel as of 8 June – the market has lost a lot of its previous sheen. With the France-built 11t-class H225 a mainstay of the market and its newest arrival, the H175, specifically aimed at the segment, any order cuts or a prolonged downturn would inevitably be painful for the manufacturer.
Although the exchange rate of the euro against the dollar has helped to soften the blow through making the Sikorsky S-92, the H225’s chief rival, “far more expensive”, says Maudet, “the other side of that coin is that the oil price has dropped from $100 to [around] $50, so it is clear that activity is very much reduced”.
Although Airbus Helicopters anticipates that the oil price will partly recover in the shorter term to around $70-80, “in the meantime there are some idle helicopters and all operators are looking for savings”.
The segment’s downturn has yet to affect deliveries, but fleet discussions with operators are taking place on a frequent basis. In any case, says Maudet, the manufacturer is confident that, on the H225 at least, production can simply be swapped over to the military variant with no change in the overall annual output.
Maudet argues that Airbus Helicopters has been using the downturn to reshape its medium-class rotorcraft range so that when the revival happens it will be able to offer new products to the market. Last year saw the arrival of two new platforms, the H145 (previously the EC145 T2) and the H175, and these will be joined from 2018 by the clean-sheet H160.
For the H175, which entered service late last year, the picture is mixed. Airbus Helicopters had planned to deliver three aircraft by the end of 2014 – one to each of Belgian operator Noordzee Helikopters Vlaanderen (NHV), Russia’s UTair and Héli-Union of France. However, the latter is looking to reschedule its deliveries and UTair has taken a solitary example of its 15 orders, which was immediately leased back by the manufacturer. “The contract is still in place but we have agreed to support our customer by suspending or shifting deliveries to some future date,” adds Maudet.
NHV, however, has remained a constant. It received the first two production helicopters last December, which have since been joined by another two. In fact, the Ostend-based firm will take six of the Pratt & Whitney Canada PT6-powered rotorcraft this year – Airbus Helicopters’ entire output for 2015.
The programme was given a further boost at the Heli-Expo show in March, when Bristow Group expanded its order for the H175 to a total of 17 units, becoming the biggest customer for the type; “the biggest order from one of the most visible operators”, as Maudet puts it.
“We are really convinced that this is the best helicopter in the market [in its class] for oil and gas,” says Maudet. “I don’t see any other [similar] helicopters being sold in these quantities.”
Although primarily designed for the oil and gas segment, Airbus Helicopters is also assembling the first VIP variant ahead of delivery next year. And assuming it finally secures an order, a search and rescue model will also follow. Maudet is confident of “a good announcement” on the SAR variant sometime in the next two months, he says.
Airbus Helicopters
Meanwhile, work continues on its next product – the H160. Billed as the “AW139 killer”, the new helicopter is firmly positioned to target AgustaWestland’s fast-selling medium-twin, again in the offshore oil and gas segment. It will be powered by a pair of Turbomeca Arrano 1,100-1,300shp (820-969kW) engines and features a majority composite fuselage, Blue Edge hockey-stick-shaped main rotor blades, and an enclosed fenestron tail rotor canted at 12°.
The initial flight-test prototype of the 5.5-6t rotorcraft has been rolled out and has performed ground runs, with a first flight likely in the coming weeks. “It’s progressing absolutely well according to the plan,” says Maudet.
Service entry is previsioned for 2018, but the airframer’s chief executive, Guillaume Faury, is still pushing for that to be advanced if possible. Maudet stresses that until the H160 takes to the skies, it is too early to say if that target is feasible, but the fact that it is even being discussed is illustrative of the maturity Airbus Helicopters has attempted to drive into the programme even before its maiden sortie. That has necessitated considerable investment at its Marignane facility, including the construction of its dynamic helicopter zero test rig, which will be employed on all future programmes. And to develop the next generation of rotor blades, it is building a new factory in the northern Parisian suburb of Dugny-Bonneuil, not far from the Paris air show site at Le Bourget.
For all the talk of a difficult military market, however, Maudet is bullish on its prospects in the segment. In part, the company’s worldview has been coloured by being provisionally selected by Poland for the supply of 50 H225M Caracals for a tri-service requirement, which is likely to be one of the biggest military deals outside of the USA in the near future.
Warsaw is due to issue a separate request for information later this year covering the likely acquisition of around 30 attack rotorcraft, for which Airbus Helicopters will offer its Tiger. That programme now appears to have more or less stabilised, with the French armed forces also requesting a further seven examples of the HAD variant in a recent defence white paper.
Maudet says the airframer is now beginning the process of talking to the Tiger’s customers – Australia, France, Germany and Spain – to identify the upgrades required for a Block III iteration of the helicopter, which would enter service in the 2017-18 timeframe.
NH Industries
The other dedicated military rotorcraft in its line-up, the NH90, is also looking better than of late. Although the NH Industries consortium, in which Airbus Helicopters is the majority shareholder alongside AgustaWestland and Fokker, is still intermittently forced to fix new issues – the corrosion problems on the Netherlands’ fleet of NFH naval variants for instance – production is now at its peak of around 50 per year. “The programme is delivering what’s expected,” he says.
A little under 250 helicopters remain in the backlog, and the consortium believes it can secure around 100-150 additional bookings, says Maudet. Of these, 22 are likely to be accounted for by Qatar, which has tentatively committed to both naval and TTH troop transport models but has yet to finalise the deal. Other near-term opportunities in Norway and Singapore are also being pursued, he says.
Overall, Maudet is pleased with the state of the military market and the equilibrium it brings to the company.
“We have really great opportunities here. That’s good because as you know the oil and gas and commercial markets are really down. We don’t see exactly when these will recover, so it’s a good balance to be [split] 50:50.”
Source: Flight International
