For nearly a decade now, from Aberdeen to Stavanger to Houma, wherever the oil and gas industry has needed to move a lot of people a long way offshore, the heavy-twin Sikorsky S-92 has been the helicopter of choice.
Data from analytics company Cirium bears this dominance out: it records 165 offshore-roled S-92s in service, versus 47 Leonardo Helicopters AW189s and 46 Airbus Helicopters H175s – both of which are slightly smaller super-medium-class rotorcraft.
Figures from LCI Analytics suggest an even greater market share for the Sikorsky helicopter, however, noting 193 S-92s in service, versus 48 examples each of the AW189 and H175.
There are several reasons behind the S-92’s stranglehold, not least of which is the lack of a natural competitor since the Airbus H225 largely exited the market on the back of a fatal crash in April 2016.
Relatively muted demand and support from the slowly expanding super-medium fleet meant the sector could mostly manage.
But the industry’s effective reliance on a single type from a single manufacturer is not without risk.
As the oil and gas industry began to emerge from a protracted lull after Covid, customer demand spiked.
At the same time, the post-Covid fragility of aerospace supply chains saw the S-92 fleet hit by availability problems due to a shortage of spare parts, particularly of main gearboxes (MGBs).
At the height of the issue, a little over 30 S-92s were out of service awaiting MGBs, causing severe disruption for operators and prompting warnings from trade body the International Association of Oil & Gas Producers (IOGP).
Ultimately, Sikorsky has been able to work through the problem – not as quickly as operators would have liked – but had there been a safety issue with the S-92 requiring a grounding it is questionable whether the industry would have coped.
The S-92 fleet is also beginning to age. While there has yet to be a wave of retirements, most – except Sikorsky – expect that to arrive from around 2030 onwards as helicopters enter their mid-20s.
A June 2024 investor presentation from Bristow Group highlighted data showing that, based on a 25-year useful life assumption, S-92 offshore retirements would ramp up from the start of the next decade, averaging at 16 helicopters annually over the 11 years from 2030 to 2040.
While 2024 saw just four retirements, according to LCI Analytics, that included the first airframe to reach 30,000 flight hours.
Speaking at the recent Verticon exhibition in Dallas, Pat Sheedy, chief executive of lessor Milestone Aviation, said in his view the S-92’s replacement cycle in oil and gas “starts to accelerate towards the end of the decade”.
That will come against a backdrop of flat or minimal expansion of the overall offshore fleet, however. “We don’t see a massive growth in the offshore fleet full stop; it will be tied to replacement demand,” says Sheedy.
Even Sikorsky sees little or no growth in the segment: future orders for new S-92s will mostly come from the VIP or head-of-state markets, says Leon Silva, vice-president of global and military systems.
The manufacturer’s forecast “does not show a significant demand for additional aircraft in offshore oil”, he says.
Figures from consultancy Cirium Ascend support the view that there will be little or no overall growth in the sector. Its Helicopter Forecast predicts around 26% of the current offshore fleet will be replaced over the next decade, but with a compound annual growth rate of only 0.5%.
However, the composition of that fleet will change, argues Sara Dhariwal, lead appraiser – helicopters at Cirium Ascend. The S-92 fleet, she says, “will be an increasing target for replacement in the late 2020s through the 2030s as aircraft reach their 30,000h lifespan, while 20-year-old examples will also be vulnerable to replacement by super-mediums”.
In all, Cirium forecasts that super-mediums will take a 44% share of the market as “they are able to operate all but the highest-capacity or longest-range missions”, says Dhariwal.
However, LCI Analytics sees the S-92’s prospects as weaker in the longer term: “The challenge from super-mediums will persist and the current orderbook will see the super-medium fleet outnumber heavies within the next decade.”
Its analysis suggests the crossover point will occur in the 2031-2032 timeframe as the super-medium fleet reaches stability and the inventory of offshore-roled heavy-twins starts to decline sharply.
Based on the latest data, LCI Analytics records a 108-unit combined backlog – including options – for the AW189 and H175.
While the AW189 and H175 have been in operation since 2014, and matured accordingly, Bell too has designs on Sikorsky’s market share. Its super-medium 525, a 9.3t helicopter, is seemingly inching closer to service entry after a protracted development that is now in its 14th year.
At Verticon, the airframer unveiled an agreement with Omni Helicopters to conduct an operational evaluation in Guyana – likely starting later this year – with the first production 525.
Duncan Moore, group chief operating officer at Omni, says the trial is based on “a seven- to 10-year look ahead on fleet strategy”.
Moore says Omni sees the potential for a new type to replace its fleet in Brazil, where the largest part of its business is based, noting that the S-92 “is in a very mature phase of its existence”.
Nonetheless, the Bell-funded evaluation stops short of any commitment to order the helicopter and therein lies the 525’s problem: for all its undoubted sophistication – notably the triple-redundant fly-by-wire controls and promised low maintenance costs – it has failed to gain real commercial momentum.
Bell has to date disclosed only a single commitment from Norwegian oil company Equinor for 10 units to be delivered from 2026 – a milestone that itself hinges on European certification – while the first production unit will be used for the Guyana trial.
At 2024’s Heli-Expo – as it was known prior to its Verticon rebrand – Bell’s chief commercial officer Danny Maldonado admitted the initial production examples would be ‘white-tails’: aircraft built without a confirmed customer in place.
This year, he rowed back from that slightly, saying “I don’t want to call them white-tails”, adding that “we are in discussions with customers already. It’s just a matter of timing and how we allocate those aircraft.”
Still, that seems a modest return for over a decade of sales effort.
But noting that it “usually takes some time for a new type to prove performance and be fully adopted into the market”, Dhariwal still sees hope: “Providing the Bell 525 performs as expected, or better, there is likely to be potential for the type to replace the S-92 on certain missions.
“It is however entering what is now a highly competitive space with strong existing competition from the S-92, the AW189 and H175, as well as potentially from the H225, which is still one to watch.”
Clearly Omni’s Guyanese trial is designed to address some of the concerns around operational performance. Moore says there is always tension in the industry around a new aircraft type – an “historic stand-off”, he calls it – where there is a demand for the benefits from new technology but a reluctance to go first.
“We are trying to put together a programme that everyone can buy into and which short-circuits that,” says Moore.
But the lack of operational data is just one drag on the 525’s sales. A reported price ticket significantly above those of its super-medium rivals is also unlikely to engender much enthusiasm to sign up.
“Bell is the solution to its own problem: it has to be incentivised to move this aircraft,” says one industry source – in other words, steep discounts are needed.
“From the operator perspective the sticker price of the aircraft is only one aspect,” says Moore, pointing to other metrics like the through-life cost, payload, environmental credentials, maintenance and utilisation rates: “They are all part of the economic equation,” he says.
Regardless, with an overall offshore market of around 300 units and growth forecast to be slight at best, Bell will have to take considerable share from all three rivals to build a meaningful in-service fleet, creating another potential hurdle.
“It remains difficult for us to see how that aircraft gets to scale,” adds Milestone’s Sheedy.
Unless there is a “reasonable scale with a global fleet”, he says, it will be difficult to assess the 525’s residual value – a risk for lessors that will make financing the aircraft harder or more costly.
In the meantime, however, the S-92 fleet remains very busy: demand is such that utilisation has recovered from a point three years ago where more than 40 aircraft were parked to an almost fully employed fleet today, according to LCI Analytics.
That view is shared by Sheedy: “The S-92s are working – we don’t see that changing anytime soon,” he says.
And for all the talk of replacing the S-92, Sikorsky, as you might expect, has a different perspective.
Silva remains unconvinced that aircraft will be retired when they hit their mid-20s, pointing out that the helicopter continues to perform.
“When you have something that is working well you are going to essentially achieve its full use.
“Our experience so far is that customers who have the S-92 want to take it out to the full extent,” he says.
What may happen, Silva suggests, is that oil companies “may start recognising that replacement when [an S-92] hits 20 [-plus] years will require a significant investment” and the retirement timeline “will likely be adjusted”.
While there is no IOGP standard for the age of a helicopter – indeed a CHC-operated Airbus AS332L1 has just hit 34,000h – some customers limit the vintage at the start of a contract.
Sikorsky is in the meantime finalising its Phase IV main gearbox upgrade for the heavy-twin, which will enhance safety and performance. To be available as a retrofit, the upgrade could help persuade operators to keep the aircraft in service for longer.
Dhariwal’s view is more nuanced, but she thinks Silva may have a case: “We have observed age restrictions being lifted over the past decade due to the lack of availability of new aircraft.
“If there is a reasonable replacement for the S-92 both in terms of performance and overall economics, it is wholly possible to enforce restrictions.”
If not, she says, “there may be little choice but to extend”.
