Lower oil prices may have provided great benefits to the world’s commercial airlines, but for helicopter operators serving the oil and gas market, they have prompted a reversal in fortunes. Since the end of 2015, the in-service fleet in the offshore support market has fallen by over 180 aircraft, some 9% of the fleet – an unprecedented downturn.
Much of this reduction resulted from two significant events in the early part of the year: the grounding of one of its key types, the Airbus Helicopters H225, and the Chapter 11 filing and resulting fleet cuts by CHC Group, one of the two largest global players, alongside Bristow Group.
The 111 H225s represented 30% of the 19-seat heavy helicopters operating in the offshore sector, with over a third based in both Asia-Pacific and Europe, and most of the remainder in Africa or Brazil.
The fatal 29 April crash in Norway came after a main rotor separation, and a partial grounding by UK and Norwegian operators followed. Then the European Aviation Safety Agency issued an emergency airworthiness directive on 2 June, grounding all commercial H225s and the older AS332 L2; a similar ruling followed the next day from the US Federal Aviation Administration.
Investigations have identified several potential issues, with Norway’s SHT air accident body homing in on the second-stage planet gear of the main gearbox’s epicyclic module.
Evidence discovered so far points to a fatigue fracture in the component, which appears to have propagated from an area of spalling – or surface degradation – of a bearing race. A similar issue was found to be behind the 2009 fatal North Sea crash of an AS332 L2.
In addition, the H225 suffered a previous gearbox issue in 2012 which led to grounding and modifications during 2013-2014. It is currently unclear when the aircraft will return to commercial service, although it continues flying with most military and parapublic users.
Flight Ascend Consultancy has undertaken analysis of the impact of the H225 grounding on the helicopter fleet serving the northern North Sea oil and gas market from the UK and Norway. Given the rig sizes, range offshore and weather conditions, this market has traditionally been dominated by the largest 19-seat helicopters. The older generation Sikorsky S-61N and AS332 have been largely replaced in recent years by the H225 and the competing S-92.
The UK North Sea is one of the world’s oldest oil basins – and also one of the most expensive when it comes to extraction. It has seen significant cutbacks in employment and investment since oil prices more than halved. Oil companies have been cutting costs in all areas and have reduced their utilisation of rotorcraft.
Helicopters are typically flying three rotations per day, some can do four in the UK market and five in Norway for short ranges off Bergen, while others are doing two rotations on longer sectors to the west of Shetland or offshore northern Norway. Most helicopters are contracted sole-use for oil companies, with some sharing in a “pool” arrangement.
Prior to the grounding, there were 35 offshore H225s being operated by Babcock Mission Critical Services Offshore (four), Bristow Helicopters (13) and CHC (10) from the UK, with Bristow (one) and CHC (seven) operating from Norway.
To replace its H225s, Bristow has added seven S-92s to give a fleet of 21. One came from Bristow Nigeria, one from associate Lider Brazil, three returned from a one-year Falklands contract and two were flown from the USA in August. At least 15 of the fleet are required to meet the daily schedule, based in Aberdeen and also Scatsta and Sumburgh in the Shetland Isles.
CHC is now using 13 S-92s – 11 based in Aberdeen and two at Sumburgh, having added one from CHC Netherlands and two from its Canadian operation in June. The third UK operator is Babcock, which added four extra S-92s leased from Milestone Aviation and Waypoint Leasing to take its fleet to 11, with most based in Aberdeen.
An interesting development for the northern North Sea market was the introduction at Aberdeen in January of the new super-medium Airbus Helicopters H175. Belgian operator Noordzee Helikopters Vlaanderen won a Chevron contract to use two aircraft, replacing previous use of the 19-seaters. These 16-seaters, including the Leonardo AW189 with Bell Helicopter 525 to come, are seen as a potentially more economical alternative to the larger types. Bristow already uses AW189s in the southern North Sea supporting gas fields and has H175s on order.
Although the market for super-medium types has been slower than expected thanks to the downturn, feedback from operators has been largely positive. As the market returns we are likely to see them replacing some of the older, heavier types, especially when factoring in the eventual arrival of the Bell 525, which, at 9.1t, is the largest of the super-mediums.
The 35 H225s which were in the UK and Norwegian fleets prior to the grounding have been quickly replaced, with 13 S-92s transferred from other regions and a likely increase in utilisation of the existing fleet where required.
Undoubtedly, there was already overcapacity in the market prior to the grounding, as a result of cutbacks resulting from the lower oil price environment. The work of around 100 of the combined H225/S-92 fleet at the start of the year is now being met by just 79 aircraft, of which at least 59 operate multiple daily rotations.
So, with an estimated quarter of the S-92 fleet being used in back-up and ad hoc roles (20 aircraft), this means there is room for more utilisation and makes it much less certain that a return of the H225 into the North Sea sector will occur, or is necessary. It may make more sense that it returns in developing markets where its longer range can be better used.
Meanwhile, further turmoil has been caused by CHC’s Chapter 11 bankruptcy protection filing and subsequent fleet cuts. The operator has already rejected leases on over 70 of a planned initial 90-aircraft reduction from its fleet of 230. The rejected leases include 29 of its 39-strong H225 fleet, with aircraft removed from European, Brazilian and Australian operations. Others being rejected include medium AW139s, S-76s and a H155.
As a percentage of the overall offshore fleet the greatest effects are on the H225 and AS332, although it could be argued that the latter fleet was likely to reduce anyway, given the relative age of the helicopters.
At this stage, the short-term outlook remains extremely uncertain. Although the final shape of the slimmed-down CHC fleet is still unclear, Flight Ascend Consultancy’s view is that the eventual operation will total around 100 rotorcraft, rather than the 75 currently planned, and will largely be weighted towards the European and Asia-Pacific regions.
In addition, the balance of leased versus owned helicopters is likely to shift, with the former slimming to 35%, down from a little over 61% previously.
While CHC’s fleet cuts do not signal any immediate additional opportunities for its rivals, in future it will have less spare capacity with which to respond to new contract tenders.
There will also be some impact on the market for the aircraft themselves, with large percentages of certain offshore-configured fleets – particularly the H225 and AS332 – injected into the market over the next two years.
Of course, once the root cause of the current grounding is fully identified, Airbus Helicopters, working with EASA, first has to develop and certificate a solution, and then ensure that the market is comfortable with the aircraft again.
Source: FlightGlobal.com
