YEAR END 2016

ASIA PACIFIC REGION CIVIL HELICOPTERS

ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 I Beijing Seoul Penglai

Chengdu Shanghai

Shenzhen Hong Kong

Bangkok Manila

ABOUT ASIAN SKY GROUP ASIAN SKY GROUP (ASG), headquartered in Hong Kong with offices throughout Asia, has assembled the most experienced aviation team in the Asia-Pacific region to provide a wide range of independent services for both fixed and rotary-wing aircraft. ASG also provides access to a significant customer base around the world with the help of its exclusive partners.

ASG provides its clients with the following business aviation services: Sales and Acquisitions | Market Research and Consulting | Operational Oversight | Luxury Charter Services

The acclaimed Asian Sky Fleet Reports are produced by ASG’s market research and consulting team, in collaboration with Asian Sky Media — a branch of ASG focusing on media and publications.

Asian Sky Media has a growing portfolio of business aviation reports designed to provide valuable information to readers for a better understanding of the market. Included in the portfolio is the Asia-Pacific Fleet Reports for both civil helicopters and business jets, and the Africa Business Jet Fleet Report for a breakdown of fleet within respective countries.

Asian Sky Quarterly provides a reader-friendly look at market dynamics within the pre-owned markets of civil helicopters and business jets. ASG’s latest reports include, the Asia-Pacific Business Jet Charter Report, Asia-Pacific Training Report and the upcoming Asia Pacific Infrastructure Report focusing on respective industry segments showcasing the current status and challenges of the industry.

DISCLAIMER The information contained in this report is provided free of charge for reference only. While such information was compiled using the best available data as of December 2016, ASG makes no warranties, either expressed or implied, concerning the accuracy, completeness, reliability, or suitability of such information. ASG is not responsible for, an expressly disclaims any and all liability for damages of any kind, either direct or indirect, arising out of use, reference to, or reliance on any information contained within this report.

CONTRIBUTION Asian Sky Group would like to acknowledge the gracious contributions made by numerous organizations, including aircraft operators, OEMs, leasing companies, aviation authorities and JETNET LLC in providing data for this report.

Should you wish to reproduce or distribute any portion of this report, in part or in full, you may do so by mentioning the source as: “Asian Sky Group, a Hong Kong-based business aviation consulting group”.

For information about our aviation services, contact: [email protected] or visit www.asianskygroup.com. For information regarding ASG publications, contact: [email protected] or visit www.asianskymedia.com.

CONTACT Suite 3905, Far East Finance Centre, 16 Harcourt Road Admiralty, Hong Kong Telephone +852 2235 9222 | Facsimile +852 2528 2766 www.asianskygroup.com CONTENTS

02 PUBLISHER’S NOTE 03 EXECUTIVE SUMMARY 04 MARKET OVERVIEW 11 SPECIAL FEATURE: OFFSHORE MARKET 15 OPERATOR PROFILE: HELIKOREA 18 SPECIAL FEATURE: LEASING MARKET 22 OPERATOR PROFILE: CHINA SOUTHERN AIRLINES GENERAL AVIATION

COUNTRY PROFILE: GREATER CHINA 26 FOR ALL COUNTRY PROFILES VISIT: WWW.ASIANSKYMEDIA.COM 42 INTERVIEW: STEFANO ZALONIS LEONARDO HELICOPTERS VICE PRESIDENT, CHINA

45 AIRCRAFT SPOTLIGHT: AW169 & AW189 PUBLISHER’S NOTE

After a year full of reports illustrating the state of business aviation in the Asia- Pacific region, ASG is happy to get back to its roots with our year end 2016 Asia- Pacific Civil Helicopter Fleet Report. It has been an especially volatile year for the civil helicopter fleet and the Asia-Pacific region was no exception. The continued downturn in oil and gas and other commodity prices, infrastructure limitations, strict regulations and overall economic and political uncertainties contributed to the regional industry again having to navigate through a tumultuous climate.

For this year’s report, we’ve decided to focus on turbines only, unlike previous reports when pistons were included. This concentration allows us to focus on critical mission segments that have either been most impacted or are in various stages of growth. This turbine only approach allows for greater coverage of offshore operations, emergency medical services (EMS), search and rescue (SAR) and multi-mission segments, where many helicopters have or will be moving into use for firefighting, forestry, powerline and other onshore uses.

When excluding single-engine pistons, you’ll see trend lines change, with the biggest example seen in Australia. In our year end 2015 report, the country showed a 3% growth from the previous year to 2,094 helicopters (both turbine and piston). Over half of those helicopters were used in the private, corporate and flight training segments – all of which typically use the single-engine piston. In our year end 2016 report, the growth is at 2%, when considering only turbine helicopters, leaving the country with 805 helicopters, most of which are engaged in multi-mission operations – all of which typically use a turbine helicopter.

While a regional breakdown of the fleet is included, this report also delves further into the Greater China market. Greater China boasted significant growth in 2016 — the most of any country in the region. The growth comes as China’s Government adapts to the necessity and benefits of general aviation, with an initiative released announcing 500 general aviation airports, among other relaxed regulations. With the government now backing the industry, hopes for the future in China remain high as investments increase.

In light of other changes that have taken place in the helicopter world – particularly the rise and establishment of helicopter leasing, ASG is introducing a new addition to the report — the Asia Pacific Helicopter Leasing Market Overview. This section showcases some of the largest lessors in the region, as well as the number of leased helicopters in each country and gives a snapshot of how established and significant the leasing business has become in Asia.

In addition to the extensive data provided in this fleet report, ASG spoke with some of the most experienced professionals in the regional industry, including China Southern Airlines General Aviation’s Deputy General Manager, Johnny Jian, HeliKorea’s Managing Director, Scott Min and Leonardo Helicopters Vice President, China, Stefano Zalonis. Also included is a spotlight on Leonardo Helicopters AW169 and AW189.

As always, ASG will have a complete breakdown of every country in the region, including top operators, top OEMs, and top mission segments served. For this, readers can now access our new website dedicated to ASG market reports and publications (www.asianskymedia.com). After clicking on a country, readers will find a comprehensive overview of business aviation within each country throughout the region.

As always, we hope that the information provided is informative and helpful in understanding this sometimes volatile, but always interesting market.

Sincerely, Jeffrey C. Lowe Managing Director, Asian Sky Group

2 ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 EXECUTIVE SUMMARY

The Asia-Pacific civil helicopter fleet (turbine only) numbered 3,927 at the end of 2016, an increase of 4% over yearend 2015. This increase is notably smaller than in past years, with only half of the 34 countries experiencing y-o-y growth. China remained the region’s growth driver – as it has for the past few years – adding 89 helicopters in 2016, an increase of 22% y-o-y.

The Asia-Pacific region’s fleet continues to be largely positioned in four countries. In unit terms, 61% of the helicopter fleet is based in Australia, Japan, China and New Zealand. Australia represents the largest market overall and is the largest market for Bell, followed by Japan, the largest market for Airbus and Leonardo, and China, the largest market for Sikorsky. New Zealand follows these three, with the largest market for MD.

In terms of Replacement Cost, the “big four” OEMs (Airbus, Bell, Sikorsky and Leonardo) collectively make up nearly 90% of the market, with Airbus at 43% and the other three making up 47%.

Today, the Asia-Pacific fleet includes a wider variety of helicopter mission profiles than ever before, with 53% of the fleet in multi-mission use1, followed by 12% for corporate and private, 9% for offshore, 7% for SAR and 6% for EMS.In replacement cost terms2, offshore has become the largest segment, with 21% of the fleet, followed by SAR at 11%.

A more recent shift in the Asia-Pacific fleet has been the usage by local operators of aircraft dry-leased from dedicated helicopter leasing companies. By year end 2016, Asia Pacific’s operators were using more than 170 helicopters dry-leased from third parties, with a replacement cost value of approximately US $1.5 billion.

Australia had the largest number of leased helicopters at 60, operating in a variety of roles from offshore, EMS and multi-mission. India follows with 28, used mainly in the offshore segment and Indonesia is next with 25, with the majority used for multi-mission operations.

The largest lessors in the Asia-Pacific region include Milestone Aviation, Waypoint Leasing, Australia & New Zealand Bank (ANZ), Airwork NZ, Lease Corporation International (LCI), and Eagle Copters.3

Note (1): The ‘Multi-Mission’ category is defined on page 48.

Note (2): ‘Replacement Cost’ figures are based on the assumption that all existing helicopters would be replaced by the latest versions of their particular OEM variant and at 2016 List Price.

Note (3): See Page 18 for the Asia Pacific Leasing Data.

ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 3 MARKET OVERVIEW 628 641 (0%) (+2%)

495 (+22%) 6 6 Mongolia 406 (+21%) 11 210 223 (+2%) (+6%)

South Korea

China Japan

24 27 (0%) (13%) Nepal 2628 2 283 286 Bhutan (+1%) (+1%) 5162 30 27 (-23%)(-10%) 7880 15 16 Taiwan (0%) (+7%) 15 15 Bangladesh (-6%) (0%) 34 Macau 6 6 Hong Kong 6 9 106 0(0%)+0+2(+50%) 105 Laos (+2%)(+1%) India 13 14 11 43 2Myanmar2 (0%) (+8%) Thailand 18 16 22 (0%) (-11%) 30 31 Guam 11 (0%) (+3%) 3636 Cambodia 8 8 Vietnam 1313 11 13 22 (0%) (+18%) 22 Sri Lanka 11 44 6 6 Brunei

Singapore 1 3 200 200 12 (+8%) (0%) 11 13 113 107 (+10%) (-5%)

Indonesia PNG

793 805 (+3%) (+2%) 2525 1413

Australia

Note (1): Fleet distribution is based on helicopters in service and their active base of operation. Note (2): Other Islands include Maldives, Micronesia, Palau99 and100 Solomon Islands.

4 ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 MARKET OVERVIEW

ASIA PACIFIC CIVIL HELICOPTER FLEET 1 (TURBINE ONLY)

2015 2016 3,760 3,927 +4%

16 16 Other Islands2 153 156 (+10%)(+2%)

Philippines 152 150 (-3%) (-1%) 1920 1919 Malaysia

French 6 5 (0%) (-17%) 55 55 Polynesia Vanuatu 9 9 (-10%) (0%) Fiji 21 12 13 (+8%) (+9%) 77New Caledonia 11 471 440 (+7%) 12 (+11%)

5558 New Zealand ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 5 MARKET OVERVIEW

GREATER CHINA Greater China including Mainland China, Hong Kong, Macau and Taiwan, is the fastest-growing market in the region, with 19% fleet growth y-o-y. Although this is slightly down from 2015, the Chinese government is working to boost the Mainland’s general aviation industry, through the easing of airspace and other operational regulations, the development of more infrastructure and an investment in local aircraft production.

Greater China’s fleet growth during 2016 was due to the establishment of over 20 new general aviation operators in mainland China, often performing firefighting, powerline patrol, aerial survey and other multi-mission work. Also set to expand are the EMS and corporate use markets, most likely in conjunction with infrastructure development. There is also a strong demand for SAR, though this activity remains under the purview of Government agencies in mainland China (MOT), Hong Kong (GFS) and Taiwan (NASC).

AUSTRALIA Asia Pacific’s largest helicopter market increased by 2% in 2016, reflecting the impact of a commodity down-cycle that halted some of the county’s largest economic drivers, decreasing the demand for aircraft from offshore oil and gas and onshore iron ore mines, and a currency exchange rate that made new aircraft purchases more difficult. At the same time, Australia has seen growth in its EMS market, with a significant number of helicopters added for EMS work by both private operators and Government agencies.

INDIA The India fleet increased 1% in 2016. India’s aviation governing body, the Directorate General of Civil Aviation (DGAC) announced new policies that would promote helicopter utilization throughout the country. Unlike most other countries in the region, India’s offshore operations are expected to increase.

INDONESIA The fleet in Indonesia remained unchanged in 2016. Potential growth was hampered by the downturn in both the oil and gas and other resources sectors. The country’s fleet growth has also been impacted by regulations restricting in-service helicopters to under 30 years of age and new imported helicopters to under ten years of age.

JAPAN The second largest helicopter fleet in the region increased 2% in 2016, with Airbus and Leonardo making up most of the new deliveries. A large portion of Japan’s newly delivered aircraft were for law enforcement, though the replacing older aircraft kept the overall net fleet growth steady. Japan remains the wealthiest and most industrialized country in the region, with a long history of helicopter use by local law enforcement, SAR and EMS agencies throughout the country’s various prefectures.

MALAYSIA The Malaysian fleet contracted slightly in 2016, which was expected given that nearly third of the total fleet is configured for offshore oil and gas support. Helicopters used for corporate purposes also saw a decrease y-o-y, with many of these units shifted into multi-mission roles.

NEW ZEALAND Growth was a healthy 7% in 2016. Pre-owned helicopters made up a majority of the additions to this market, with only three out of the 42 additions being new deliveries, including four for charter, one for corporate use and 37 for multi-mission. The country also has the largest fleet of MD helicopters in the region, most of which are utilized for multi-mission operations.

PAPAU NEW GUINEA (PNG) PNG’s fleet contracted 5% in 2016. A typical PNG helicopter can be characterized as pre-owned, aging, and a single-engine turbine from either Bell or Airbus, and engaged in multi-mission applications, however going forward PNG appears set to grow, as resources are developed and more investment goes into the country. Given its difficult topography and lack of infrastructure, helicopters remain vital to the developing country.

6 ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 MARKET OVERVIEW

PHILIPPINES The Philippines fleet grew by 2% in 2016, from 153 to 156. The Philippines fleet is set to grow in a number of areas, most notably for use by law enforcement and Government agencies for uses including disaster relief, as well as an expected increase in charter demand given the significant development of the country’s casino and resort industry.

SOUTH KOREA The South Korean fleet grew 6% in 2016. The largest portion of the fleet is used in a multi-mission role, particularly firefighting. Although also found in China, India and Vietnam, South Korea has the largest number of Russian helicopters in Asia. The country has also recently experienced a growing demand for EMS helicopters.

THAILAND The fleet in Thailand increased by only 1% in 2016, as political and economic uncertainty, as well as the oil and gas downturn, stunning continued growth in the Thai tourism industry. Despite its attraction as a tourist and resort destination and its geographical make up, over three-quarters of the civilian fleet is used for either law enforcement or offshore. Regulations preventing the importation of helicopters older than five years may be holding back the growth of helicopter use in the private, charter and multi-mission categories.

Asia Pacific Civil Helicopter Fleet

Total Fleet (Units) OEM Replacement Cost (USD Millions) 80+44+21+15+12+8+8+8+6+6+2+2 80+60+40+14+39+2+13+17+1+9+5+4 1,691 Airbus 11,904

1,087 Bell 5,501

358 Leonardo 3,723

249 MD 624

207 Sikorsky 3,595

75 Robinson 64

71 Mil 574

67 Kamov 804

44 Enstrom 52

38 Avicopter 349

23 HAL 223

17 Others 150

Total Fleet 3,927 $27,563

Note (1): ‘Replacement Cost’ figures are based on the assumption that all existing helicopters would be replaced by the latest versions of their particular OEM variant and at 2016 List Price.

ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 7 MARKET OVERVIEW

Total Fleet by OEM and Country 3,927 in Total

805

641

495 471

286 223 200 156 150 107 106 55 100+80+62+58+36+28+25+20+19+13+13+7+4+3+331 27 27 PNG India China Nepal Japan Taiwan Vietnam Vanuatu Thailand Australia Malaysia Indonesia Philippines South Korea New Zealand New

Airbus 304 348 188 242 122 56 75 85 82 36 34 3 13 12 19 3 9 8 5 10 8 8 8 2 5 2 2 2 1,691 Bell 350 128 105 99 85 45 73 44 18 61 50 10 3 8 1 3 2 1 1 1,087 Leonardo 64 101 50 9 37 21 8 15 32 1 9 3 2 6 358 MD 25 15 5 107 4 8 4 9 51 15 5 1 249 Sikorsky 34 32 49 3 5 27 17 1 10 1 13 5 6 4 207 Robinson 23 11 14 6 3 1 1 4 1 5 1 2 1 1 75 Mil 14 1 6 12 2 4 5 15 5 3 1 4 71 Kamov 1 13 50 3 67 Enstrom 3 1 18 2 2 17 1 44 Avicopter 38 38 HAL 21 2 23 Other OEMs 2 4 1 4 1 2 3 17 Grand Total 805 641 495 471 286 223 200 156 150 107 106 55 31 27 27 16 16 15 14 13 13 9 9 8 6 6 6 5 3 2 6 3,927 % of Total 20% 16% 13% 12% 7% 6% 5% 4% 4% 3% 3% 1% 1% 1% 1% ------

8 ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 MARKET OVERVIEW

Total Fleet by Mission Fleet Size (Units) Replacement Cost (USD Billions)

Training 56 (1%) Training (1%)

Private 60 (2%) Private (1%)

Charter 209 (5%) Charter (4%)

(7%) EMS 220 (6%) EMS

SAR 258 (7%) Corporate (8%)

Law Enforcement Multi-Mission Law Enforcement Multi-Mission 289 (7%) 3,927 2,099 (53%) (8%) $27.6 (39%) Offshore 342 (9%) SAR (11%) Corporate 394 (10%)54+10+976+6521+G Offshore (21%)39+21+1188+741+G 2+2+2+2+2+2+1+1+1+1+1+1+1+1+1+116 16 15 14 13 13 9 9 8 6 6 6 5 3 2 6 Fiji Laos Total Guam Brunei Macau Bhutan Mongolia Sri Lanka Myanmar Cambodia Singapore Hong Kong Bangladesh Other Islands New Caledonia New French Polynesia French

Airbus 304 348 188 242 122 56 75 85 82 36 34 3 13 12 19 3 9 8 5 10 8 8 8 2 5 2 2 2 1,691 Bell 350 128 105 99 85 45 73 44 18 61 50 10 3 8 1 3 2 1 1 1,087 Leonardo 64 101 50 9 37 21 8 15 32 1 9 3 2 6 358 MD 25 15 5 107 4 8 4 9 51 15 5 1 249 Sikorsky 34 32 49 3 5 27 17 1 10 1 13 5 6 4 207 Robinson 23 11 14 6 3 1 1 4 1 5 1 2 1 1 75 Mil 14 1 6 12 2 4 5 15 5 3 1 4 71 Kamov 1 13 50 3 67 Enstrom 3 1 18 2 2 17 1 44 Avicopter 38 38 HAL 21 2 23 Other OEMs 2 4 1 4 1 2 3 17 Grand Total 805 641 495 471 286 223 200 156 150 107 106 55 31 27 27 16 16 15 14 13 13 9 9 8 6 6 6 5 3 2 6 3,927 % of Total 20% 16% 13% 12% 7% 6% 5% 4% 4% 3% 3% 1% 1% 1% 1% ------

ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 9 MARKET OVERVIEW

Net Fleet Growth by OEM 2014 (3,589) 2015 (3,760) 2016 (3,927) 1,691 1,601 1,531 1,100 1,084 1,087 358 308 277 249 249 237 207 204 186 67 67 71 63 63 65 51 64 75 41 35 44 19 22 38 23 23 23 17 17 19 Mil MD Bell 90+0+00+94+00+0+99 64+0+00+65+00+0+6416+0+00+18+00+0+21 14+0+00+15+00+0+1511+0+00+12+00+0+12 3+0+00+4+00+0+4 4+0+0 0+4+00+0+44+0+0 0+4+00+0+42+0+0 0+2+00+0+31+0+0 0+1+00+0+21+0+0 0+0+1HAL 0+1+0 1+0+00+1+00+0+1 Airbus Others Kamov Enstrom Sikorsky Avicopter Robinson Leonardo

Net Fleet Growth by Mission

2014 (3,589)

2,099 (3,760) 1,940 2015 1,830 2016 (3,927) 413 409 394 357 342 353 285 289 276 256 258 209 245 220 187 197 186 171 61 60 65 60 58 56 SAR

87+0+00+92+00+0+100 0+0+1920+0+00+20+0 17+0+00+17+0 0+0+16 0+0+1413+0+00+14+0 12+0+00+12+0 0+0+12 EMS 9+0+00+9+0 0+0+11 8+0+00+9+0 3+0+0 0+0+10 0+3+03+0+00+0+3 0+3+0 0+0+3 Private Charter Training Offshore Corporate Multi-Mission Law Enforcement Law

Net Fleet Growth by Size Category

2014 (3,589) 2015 (3,760) 2016 (3,927) 2,015 1,913 1,810 975 935 893 728 705 683 206 205 203 4 1 0+0+910+96+0100+0+0 0+0+34 0+35+036+0+00+0+45 0+47+0 49+0+00+0+0 0 0+0+0 1+0+0 0+0+10 0+10+010+0+0 Heavy Single Medium Light Twin Super Medium

10 ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 The downturn in oil prices continued to impact the Asia-Pacific region in 2016. In previous years, offshore oil and gas service providers were one of the main growth drivers for the region, however in 2016 the fleet contracted by 4.2%. The grounding of the H225 and the overall lack of offshore service demand has been most acutely felt in Australia, China, Malaysia, Thailand and Indonesia.

SPECIAL FEATURE: OFFSHORE MARKET

Asia Pacific Offshore Helicopter Fleet

Total Fleet (Units) Country Replacement Cost (USD Millions) 75+63+47+44+29+22+22+13+8+6+6+5+3+1 100+83+39+50+26+23+24+7+8+4+4+7+3+1 73 Australia 1,463

63 China 1,247

47 India 590

44 Malaysia 749

29 Indonesia 390

22 Thailand 346

22 Vietnam 356

13 New Zealand 102

8 Myanmar 118

6 Philippines 59

6 PNG 66

5 Brunei 109

3 South Korea 45

1 Japan 11

Total Fleet 342 $5,651

Note (1): ‘Replacement Cost’ figures are based on the assumption that all existing helicopters would be replaced by the latest versions of their particular OEM variant and at 2016 List Price.

ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 11 SPECIAL FEATURE: OFFSHORE MARKET

2015 2016 357 342

67 63

3 South Korea 3 50 1 1 Japan 47 6763 China 33 11 India 9 8 Myanmar 19 22 22 22 5047 98 Vietnam Thailand 1922 222245 44 6 6 Philippines

665 5 Malaysia Brunei 4545 32 29 55

6 6 3229 Indonesia 66 PNG

78 73

etween 2012 and 2014, one of the driving forces behind the region’s fleet was helicopter deliveries to oil and gas service providers and operators. B Australia A stark decline began towards the end of 2015 and utilization of oil and gas production (OGP) helicopters 8075 14 13 began to drop precipitously. New Zealand

The downturn in the oil and gas industry resulted with 1413 national and private oil companies losing profits, cutting workforces, decommissioning oil rigs and halting exploration At year end 2016, helicopters used for offshore oil and gas and production projects. Asian offshore helicopter operators support in the Asia-Pacific region numbered 342 (8.7% of the have had to react quickly to a changing landscape that only a total fleet), down from 357 at the end of 2015 (9.5% of the few years before had appeared to be on a continued upward total fleet). In terms of replacement cost, offshore helicopters trajectory, with a significant amount of investment capital currently make up 20.5% of the total fleet, down from 22.3% going toward newer equipment. in 2015.

The demand for OGP helicopters as an asset class often There were still new deliveries to the region, including four lags behind the price of the commodity, and even with oil Leonardo AW139s to Australia and four Sikorsky S-76Ds to prices stabilizing somewhat in recent months, Asia Pacific Thailand, but a larger number either sold out of the region, utilization levels and pricing have yet to catch up. returned to lessors, or put to different uses.

12 ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 SPECIAL FEATURE: OFFSHORE MARKET

Asia Pacific Offshore Fleet by Country and Model Australia China India Malaysia Indonesia Thailand Vietnam Zealand New Myanmar PNG Philippines Brunei South Korea Japan Total

Airbus AS365 3 2 19 1 2 2 1 30

H225 12 7 8 3 30

H155 14 1 3 18

AS332L1 7 5 1 1 14

H125 1 1 6 8

AS332L2 1 2 4 7

BK117 1 1 2 3 7

AS332L 5 1 6

AS355 1 2 3

H120 1 1 2

H135 1 1 2

H145 1 1

Bell Bell 412 1 15 7 1 24

Bell 212 1 1 2 4

Bell 429 1 1

Bell 205 1 1

Bell 214 1 1

HAL Dhruv 2 2

Leonardo AW139 16 8 20 3 9 2 1 2 2 63

AW189 1 3 4

AW109 2 1 3

Mil Mi-8 9 9

Sikorsky S-76C++ 4 13 3 7 4 5 36

S-92 10 13 2 3 28

S-76C 6 4 1 1 12

S-76C+ 2 1 2 3 2 10

S-76A 1 1 5 7

S-76D 4 4

S-76A+ 2 1 3

S-76A++ 2 2 Total 73 63 47 44 29 22 22 13 8 6 6 5 3 1 342

ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 13 SPECIAL FEATURE: OFFSHORE MARKET

The net overall decline in numbers, while meaningful, Australia contains the largest fleet of offshore helicopters obscures the overall economic toll it has taken on offshore in the region, with 73, followed by China with 63, and India operators, many of whom have a number of aircraft currently with 47. All three markets saw a decrease in the number of without a contract or in other cases a number of H225s still helicopters used for offshore during the year. Grounding of not yet cleared to fly offshore. the H225 fleet was also felt most acutely in Australia (12), Malaysia (8), China (7) and Vietnam (3). According to Wood Mackenzie, a commercial intelligence company for the energy, metals and mining industries, The consensus developing within the global industry is that “Global spending on oil and natural gas exploration is set to 2017 will remain a down year, but there are positive signs fall next year [2017] to the lowest level in 12 years as the for the future. Tendering activity appears to be increasing, industry cuts costs and shuns more expensive areas...” With and positive signs from oil companies and researcher firms spending for the coming year forecasted at an all-time low, indicate that halted drilling programs will begin to come offshore providers will continue to feel the effect. online in 2018 and beyond and more new fields must be developed to replace dwindling reserves. Without a clear indication of an upturn, local operators have taken steps to strengthen their finances, retain personnel and diversify their fleet and operations. Those with the ability to do so are using their aircraft for other utility purposes or shifting their aircraft into other purposes, including firefighting, cargo lifting and passenger support.

Asia Pacific Offshore Fleet by Operator (5 or more helicopters) 35+28+26+21+20+19+17+14+13+12+10+10+10 9+9+7+7+7+6+6+5+5+5+5+5 COHC 34 HNZ 9

Bristow 28 Heligo 9

Weststar 26 Babcock 7

China Southern 21 China Eastern 7

CHC 20 Hevilift 7

VNH 19 SFS 6

Pawan Hans 17 UOA 6

Global Vectra 14 Awan Inspirasi 5

MHS 13 Heli-Union 5

Travira 12 INAEC 5

Esso 10 Pacific 5

Pelita 10 Shell Brunei 5

TAS 10

14 ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 OPERATOR PROFILE: HELIKOREA

HELIKOREA INTERVIEW WITH SCOTT MIN MANAGING DIRECTOR

Interview by Litalia Yoakum

tarting out with only three helicopters, HeliKorea began its operations in 1996 after recognizing the need for an air transport service within the S country. The company has since grown into the nation’s largest private helicopter operator and leading air transport company. At its headquarters in the central Korean city of Deajeon, HeliKorea is located on a 20,000-square-metre site, complete with an authorized heli-pad and maintenance facilities that can accommodate over 20 helicopters. HeliKorea also has operations at Gimpo Airport and Gimhae International Airport, as well as in Seoul. 35+28+26+21+20+19+17+14+13+12+10+10+10 9+9+7+7+7+6+6+5+5+5+5+5

ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 15 OPERATOR PROFILE: HELIKOREA

Although operations with the cargo lifting segment have declined as a number of new helicopter operators have entered the market, HeliKorea is still active providing for Korea Electric Power Corporation (KEPCO). Cargo lifting operations account for 25% of the company’s revenue. Other operations include the growing segment of emergency medical services (EMS) for the National Medical Center, offshore support for the Korean National Oil Corporation (KNOC), as well as power line patrol, aerial survey and agriculture spray.

HOW MANY HELICOPTERS ARE IN HELIKOREA’S FLEET?

HeliKorea operates the largest fleet in Korea, with a total of 26 helicopters, some of which are under the operator’s subsidiary UB Air. Included in the fleet are six Kamovs, five Bell 214s, two Bell 407s, two Bell 206s, three Leonardo AW169s, three Sikorsky S-76C+ models, four MD 500s by MD Helicopter and one Kawasaki BK 117C1.

WHAT IS THE CURRENT OUTLOOK OF THE HELICOPTER MARKET IN KOREA?

For civil operators, all major markets including firefighting and Over the years, Korea’s leading helicopter operator has been cargo lifting are saturated. However, firefighting operations expanding into the global market and continues to do so. remain the largest market in Korea, in terms of sales. Supply and Since 2010, the company has assisted foreign governments demand are met within this segment. Although the government in the construction of an Antarctic research base and since is now requiring medium and heavy-sized helicopters. 2011, it has aided the Chinese Government in forest fire operations. HeliKorea aims to continue with its expansion Cargo lifting of power line towers have also taken a big into the Asian and worldwide market, as well as ensuring its portion of sales in this market, however, since more than 70% dedication to clients through highly trained professionals, of towers have been built, operations are diminishing. high standards of safety and ability to operate a mixed fleet Korea’s EMS operations are a growing market. There are six in various mission types. helicopters being operated and eight more domestic regions expected to operate EMS helicopters over the coming years. WHAT SERVICES DOES HELIKOREA PROVIDE The offshore oil and gas sector continues its decline, which AND WHICH SEGMENTS ARE SERVED? is reflective of the global downturn. HeliKorea’s helicopter operations began with passenger A large portion of Korea’s helicopter fleet belong to transport and firefighting operations. Our largest profits government entities such as Forestry Aviation, Coast Guard when we started were firefighting operations and cargo and the Police. Although the Korean helicopter fleet has the lifting, which in the beginning accounted for about half of potential to expand, replacement costs for these particular HeliKorea’s activity. helicopters is high and requires a long process to pass the budget for purchasing new aircraft. The HeliKorea fleet is currently most active in firefighting operations, which now accounts for 60% of the company’s Additionally, it is important that the government recognize activity, providing services for the local and Chinese the need for new business, otherwise civil operators will need governments. Within the country, firefighting operations are to market themselves and find new regions to operate in. vital in combatting the six-month long dry season.

16 ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 OPERATOR PROFILE: HELIKOREA

WHAT ARE SOME OF THE MEASURES In the oil and gas segment, HeliKorea has partnered with HELIKOREA UNDERGOES TO ENSURE A SAFE Bristow Group and the Australian oil and gas company, ENVIRONMENT? Woodside Energy for the exploration of gas in the East Sea. This is the first time a Korean civil operator has partnered HeliKorea holds quarterly safety assessment meetings with a global foreign helicopter operator. to review its safety status. Korea’s government agency also regularly visits the company to further assess safety As HeliKorea becomes increasingly involved in firefighting levels, ensuring standards are met. HeliKorea also only operations, we’ve been able to share our knowledge and hires pilots with over 1,000 training hours and engineers support. Across the region, particularly within Southeast must have significant and quality experience prior to being Asia and in China, there’s a growing interest and demand for hired. Additionally, HeliKorea holds internal safety exams firefighting operations. Over the past few years, HeliKorea to make sure all pilots and engineers’ knowledge and has leased helicopters to the Government of China for this technique is up to date, as well as those professionals taking segment type. Aside from leasing, we also provide operational annual government tests. We’ve also invested in a safety support through our highly trained pilots and engineers. management system (SMS), which manages safety risk and assures the effectiveness of safety controls. WHAT CAN THE INDUSTRY EXPECT FROM HELIKOREA OVER THE NEXT FEW YEARS? WHAT ARE SOME OF HELIKOREA’S LATEST ACHIEVEMENTS AND CURRENT As the largest helicopter operator in the Korean civil market, DEVELOPMENTS? operating a majority of the privately-owned helicopters in the country, HeliKorea expects to expand operations across the The Korean government has plans to expand its emergency globe. We’ll continue to be active in our firefighting operations medical service (EMS) operations nationwide. Through this and expand EMS operations, both at home and abroad. expansion, HeliKorea was awarded with the government tender for EMS helicopter operations and has brought in HeliKorea expects to set the industry standard in general three Leonardo AW169s for the mission. In the future, EMS aviation safety. Our SMS and strict safety measures thus will be a driving force behind HeliKorea’s activity and future far have ensured success in this area. We hope the rest of businesses, within the country and hopefully beyond. Korea’s helicopter industry will follow.

As we have expanded operations, more and more of our www.helikorea.co.kr business continues to be abroad and/or with international companies and governments.

ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 17 SPECIAL FEATURE: LEASING MARKET 44+15+13+13+13+12+12

South Korea 11 22 Japan 9 9 China 28 14 Thailand 1 Vietnam India 14 28 1 1Myanmar 8 1 Philippines

6 10 5 Malaysia 25 8 25 Indonesia PNG 9

60

ver the past decade, the general aviation industry Australia has seen the establishment of companies O specializing in helicopter leasing, primarily utilizing 60 a ‘dry lease’ model (also known as an ‘operating lease’) whereby the lessor owns the aircraft and its residual risk, renting it to an operator who is responsible for all facets of 11 the operation and maintenance. Rental terms and prices New Zealand vary depending on the prevailing market conditions, but the goal for both lessor and lessee is usually to match the term 11 of a lease to a specific contract. as well as a ‘wet lease’ model for operating larger, more expensive and advanced OGP helicopters. Acceptance and support for this type of ‘operating lease’ financing has significantly increased in the Asia-Pacific The ‘wet lease’ model had been utilized in the region for region, helping to replace the traditional structures prevalent decades, primarily as a partnership between regional and among regional operators. Asian operators historically relied global operators, both focused almost exclusively on offshore on strong local banking relationships to finance their assets, oil and gas operations.

18 ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 SPECIAL FEATURE: LEASING MARKET

Asia Pacific Leased Fleet by Top Lessor

Total Fleet (Units) Country Replacement Cost (USD Millions) 44+15+13+13+13+12+12 70+11+29+16+13+23+19 44 Milestone 723

15 Eagle 82

13 Waypoint 210

13 Airwork 115

13 Textron 92

12 ANZ 169

12 LCI 137

Total Fleet 122 $1,528

Asia Pacific Leased Fleet by Major Lessor and Base of Operation

44

15 13 13 13 12 12 44+15+13+13+13+12+12+4+3+34 3 3 +33 +33 LCI VIH ANZ Total Eagle Textron Airwork Westpac Waypoint Milestone HeliKorea Columbia Heli Capital Finance

Australia 14 5 2 4 6 12 4 3 3 53 Indonesia 5 7 4 6 1 23 India 6 3 5 3 17 Thailand 11 1 1 13 New Zealand 1 6 7 China 3 1 3 7 PNG 1 2 3 6 Malaysia 2 1 2 5 Philippines 1 1 2 4 Vietnam 1 1 South Korea 1 1 Myanmar 1 1 Total 44 15 13 13 13 12 12 4 3 3 3 3 138

Regional operators held a local Aircraft Operating Certificate it difficult for the large global operators to “own” their own (AOC), had access to on the ground infrastructure and other local operations. necessary licenses and approvals, but might have lacked other components necessary to support the standards and As a result, the ‘wet lease’ model, whereby large global requirements of large international oil majors; while rules operators provided the aircraft, maintenance programs, pilots, and regulations concerning ownership, importation, tax engineers, safety management systems and other services, and other factors that vary from country to country made often in conjunction with a direct investment or joint venture,

ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 19 SPECIAL FEATURE: LEASING MARKET

Leased Fleet by Size Category operators no longer saw the same strategic benefits or growth opportunities as before, leading to a new relationship dynamic with regional operators that revolved more around traditional ‘operating lease’ factors such as pricing, Heavy 19 (11%) Super Medium 1 contractual terms, credit quality and country risk.

Starting in late 2010 and continuing over the following years, Light Twin 19 (11%) Medium 94 (54%) a new group of companies focused on helicopter leasing emerged to provide these ‘dry leases’ directly. These lessors initially provided ‘sale-leaseback’ services to the large global Single 41 (24%) 174 operators as a way to help them manage their balance sheets. As their own order-books increased, along with their scale, lessors quickly began to lease helicopters directly to OGP operators in developing countries, where they were 52+26+11101+G more willing to take on country and credit risk. Today, they have largely supplanted the global operators as the main providers of ‘dry-leased’ helicopters in Asia Pacific. was seen by them as a method to gain market share and strategic position within a particular country; and it was not The largest of these lessors are Milestone Aviation, Waypoint uncommon to see exclusive ‘wet lease’ partnerships between Leasing, Lease Corporation International (LCI) and Lobo global and local operators in major Asian oil producing Leasing. They joined previously established, though primarily countries like China, Malaysia and Thailand providing OGP specialty lessors like Eagle Copters, which had long been helicopter services. active in India, and banks in Australian and New Zealand, who

Leased Fleet by Mission Fleet Size Replacement Cost (USD Billions)

Corporate 4 (2%) SAR 3 (2%) SAR (1%) Corporate (1%)

Charter 5 (3%) Private 2 (1%) Charter (2%) Private (1%)

EMS (15%) EMS 29 (17%)

174 Multi-Mission (25%) $2.1 Offshore (55%)

Multi-Mission 62 (35%) 39+Offshore36+1732+21G 69 (40%) 55+25+1521+1G By the second half of the 2000s, certain regional operators have long established leasing and lending businesses in their with established operations became more interested local markets. More recently, a number of Asia-based lessors, in the ‘dry lease’ structure, preferring to use their own primarily in China, have arrived to better serve the growing locally sourced pilots and engineers. While some initial regional market. support may have been required, these operators took a view toward developing their own capabilities and sought While initially focused almost exclusively on heavy and a structure without overarching obligations of a ‘wet lease’ medium twin OGP helicopters, the length and severity or joint venture. of the current downturn has encouraged lessors to consider providing ‘dry-leases’ for other types of aircraft As more local operators developed their infrastructure and and operations. the associated need for wet leases receded, some global

20 ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 SPECIAL FEATURE: LEASING MARKET

In the Asia-Pacific region today, OGP helicopters make Australia in particular has seen a significant number of up approximately 55% of the leasing market (in terms of medium twin helicopters leased for EMS work, and countries replacement cost), but only 40% of market in terms of units. like China and Korea have experienced this trend as well. This shift has also created more opportunity for the dry leasing of The largest change in the Asian market over the past year light twin helicopters, a trend that is also likely to continue. has been the willingness of lessors to work with aircraft used in SAR, EMS and other missions. These opportunities vary widely, with some work backed by Government contracts and others more speculative.

Asia Pacific Leased Fleet by Major Lessor and Model Milestone Eagle Waypoint Textron Airwork LCI ANZ Capital Finance Columbia Heli Westpac HeliKorea VIH Total

Airbus BK117 11 11 H225 4 2 6 H130 2 3 5 AS365 2 2 4 H125 1 1 2 SA315 2 2 AS355 1 1 H145 1 1 Bell Bell 412 5 3 1 5 14 Bell 206 4 1 2 7 Bell 407 5 5 Bell 429 3 3 Bell 205 1 1 2 Bell 204 2 2 Bell 212 2 2 Boeing BV234 3 3 Kamov KA-32 3 3 Leonardo AW139 10 2 9 10 1 32 AW189 1 1 AW169 1 1 MD MD 500 1 2 3 Sikorsky S-92 6 1 3 10 S-76C++ 9 1 10 S-76C+ 1 3 4 S-76D 4 4 Total 44 15 13 13 13 12 12 4 3 3 3 3 138

ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 21 OPERATOR PROFILE: HELIKOREA

CHINA SOUTHERN AIRLINES GENERAL AVIATION LIMITED

INTERVIEW WITH JOHNNY JIAN DEPUTY GENERAL MANAGER

Interview by Litalia Yoakum

s a subsidiary of the world’s fourth largest passenger carrier China Southern Airlines Company, China Southern Airlines General Aviation Limited is now leaving a heavy footprint in the general aviation industry. A Deputy General Manager Johnny Jian is at the forefront of this division, working alongside his team, to lead the company in the sometimes volatile but recently more relaxed general aviation industry in China.

22 ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 OPERATOR PROFILE: CHINA SOUTHERN GENERAL AVIATION

Upon graduating from the well-known Civil Aviation University of China in 1982, Mr. Jian joined China Southern Airlines. Starting out as a mechanic, he moved up the ranks to become a licensed engineer, engineer manager and now the Deputy General Manager, where his technical background aids in the successful operation of the company.

“Within my 35 years in the company, I’ve witnessed a rapid development of the company and the industry,” says Mr. Jian. “When I was a mechanic, the company owned three Bell 212s. We’ve since expanded to own the largest Sikorsky fleet in the Asia-Pacific region with 20 Sikorsky helicopters, as well as operating an additional Sikorsky for a client. Our total operating fleet size is 23 helicopters, including two leased Bell 407s, making China Southern’s helicopter division one of the top operators in the country. In 2017, a new addition will that didn’t keep up with that development. However, after 30 be delivered, as well.” years the central government is now announcing regulations and policies that encourage and promote the industry. With Mission operations predominately serve the oil and gas these open regulations, businesses will see general aviation sector, with some of its largest clients including China as a good investment.” National Offshore Oil Corporation (CNOOC), Shell and BP. Although about 90% of helicopter operations serve the In 2016, in an effort to promote the industry and tap into its offshore segment, in the past few years the company has future potential, the central government released an initiative moved to more onshore operations including powerline to build more than 500 general aviation airports, accessible patrol, forestry protection, charter for VIPs and tourism and for 5,000 general aviation aircraft aiming for a combined two aerial surveying. million hours of flight utilization, by the end of 2020. As well as opening up the country’s airspace below 3,000-meters, up As the overall general aviation climate in the Asia-Pacific from 1,000-meters, the initiative will simplify and reduce the region is rocked by downturns, insufficient infrastructure and application time and process for general aviation flying. stringent regulations, Greater China has persevered with the fastest-growing civil helicopter fleet in the region. Even with new regulations aimed at promoting the industry, the downturn in the oil and gas sector continues “Over the past two decades, China has developed rapidly,” to impact offshore operations throughout the world, says Mr. Jian. “General aviation is one of the few industries including China Southern.

ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 23 OPERATOR PROFILE: CHINA SOUTHERN GENERAL AVIATION

“Just as companies across the region and across the world, pilot is required to not only meet the standards put out by China Southern Airlines General Aviation has been effected by the Civil Aviation Administration of China (CAAC), but exceed this downturn. 2004-2014 are now noted as the ‘Golden 10’, them. For example, helicopter pilots are required by the CAAC as the number of helicopters increased, staff increased and to participate in simulator training once a year. We require our revenues increased. We did very well. When the downturn hit, pilots do participate in simulator training twice a year.” we had to diversify our fleet and look to onshore operations.” By ensuring pilot knowledge is maintained and up to date, The company has since engaged largely in forestry protection China Southern Airlines General Aviation ensures a safer and powerline patrol; however offshore operations are still environment. Mr. Jian’s vast knowledge in engineering and the dominate segment served. mechanics supports the company’s culture of advanced safety, as the company invests in the latest technology in “We expect a turnaround in the next few years, although it flight monitoring systems. will still be a challenge for the helicopters. This sector will likely see a turnaround a few years after the oil and gas sector By gathering flight information through a safety management picks up.” system (SMS), Jian and his team have the ability to understand and analyze all elements of a flight, reducing While China Southern Airlines General Aviation division future risks and guaranteeing maximum safety and reliability focuses on both its offshore and onshore operations, the top in future flights. priority remains safety, reliability and maintaining a culture that is consistently above standards. As China Southern Airlines General Aviation continues to work through the developing industry in the country, Mr. Jian “China Southern Airlines General Aviation has put in place a has high hopes for the company. very organized system of safety for our aircraft and pilots. Prior to any flying, our pilots undergo extensive training. Each

24 ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 OPERATOR PROFILE: CHINA SOUTHERN GENERAL AVIATION

“Compared to the more developed markets in the US and Through the perseverance that has maintained China Europe, China has a long way to go. Although, with economic Southern Airlines General Aviation as a top operator within the development, further infrastructure and increased interest region, Mr. Jian and his team of professionals will continue to in general aviation, we will get to that point. Helicopters can invest in the industry and exceed industry standards to make do a lot for the daily life of Chinese citizens, through EMS, the company successful. powerline operations and other growing segments. With the government’s promotion of the industry, the demand will www.cs-zhhc.com increase, just as the operations will increase.”

As the industry opens up, China Southern Airlines General Aviation is looking forward to increased activity in its own segments. Building itself up from a small company in the early years of general aviation, the company has since become an example to smaller operators throughout the country. Capitalizing on that experience, China Southern Airlines General Aviation is now providing consultation and assistance to small operations and also hopes to increase overall operations through additional maintenance facilities and training programs.

ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 25 COUNTRY PROFILE: GREATER CHINA FOR ALL COUNTRY PROFILES VISIT: WWW.ASIANSKYMEDIA.COM

SPECIAL FEATURE: GREATER CHINA

n mid-2016, the Chinese government announced a mandate that has the potential to significantly enhance the nation’s general aviation industry in Ithe coming years.

2014 (393) 495 2015 (457) 2016 (543) 406

332

39 22 21 21 30 27

China Hong Kong & Macau Taiwan

Note: 2015 fleet growth figures in Greater China are based on Asian Sky Group’s adjusted numbers for 2014.

26 ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 COUNTRY PROFILE: GREATER CHINA

Greater China Civil Helicopter Fleet

543 in Total

HEILONGJIANG 26

JILIN

LIAONING XINJIANG 8 4 BEIJING INNER MONGOLIA 69 TIANJIN 6 HEBEI 18 12 NINGXIA SHANDONG SHANXI QINGHAI 1 31 1 2 GANSU JIANGSU 1 SHAANXI HENAN 11 8 14 SHANGHAI XIZANG ANHUI 44 HUBEI 5 SICHUAN 23 ZHEJIANG 21 CHONGQING 18 11 HUNAN JIANGXI 5 2 GUIZHOU FUJIAN 6 2 TAIWAN YUNNAN GUANGDONG 27 24 GUANGXI 113 7 HONG KONG MACAU 15 6

HAINAN 2

According to the 2016 Chinese State Council Report, “As part China’s Ministry of Transportation also issued revised orders of efforts to promote industry transformation and upgrades, on the Administration of Business Licensing for General and to further tap consumption potential, an initiative is Aviation, effective June 1, 2016. In order for a company to set to build a general aviation industry that has more than be granted a general aviation license a number of rules must 500 general aviation airports, 5,000 aircraft, and a group of be met, including owning “at least two civil aircraft through competitive enterprises by the end of 2020.” purchase or lease, with such aircraft registered within the People’s Republic of China and conformed to airworthiness Additionally, the plans open up the country’s lower airspace standards.” below 3,000-meters, up from 1,000-meters, as well as simplifying and reducing the application time and process; a move beneficial to most general aviation aircraft.

ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 27 COUNTRY PROFILE: GREATER CHINA

71+0+0 50+0+017+0+0 21+0+010+0+0 5+0+0 2+0+0 5+0+0 3+0+0 4+0+0 1+0+0 1+0+0

A previous order required businesses to own aircraft, rather These measures are at the forefront of significant change in than providing the option of leasing. Additionally, the revised general aviation. For helicopter operators, the new regulations order removes certain requirements relating to the use of will likely encourage more business and more projects in the company’s funds to purchase the aircraft, as well as various mission types. simplifying the procedures for the establishment of a general aviation business.

Fleet Growth Civil Helicopters in Greater China 60+0+00+75+00+0+100 0+0+1922+0+00+21+0 12+0+00+15+0 0+0+17 0+0+1514+0+00+16+0 6+0+00+8+0 0+0+72+0+00+2+0 0+0+72+0+00+3+0 0+0+3 2+0+00+2+0 0+0+21+0+00+2+0 0+0+2

625

+15%

543

+19%

457

+16%

393 +12% 352

2013 2014 2015 2016 2017 EST

Note: 2015 fleet growth figures in Greater China are based on Asian Sky Group’s adjusted and updated 2014 numbers.

28 ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 COUNTRY PROFILE: GREATER CHINA

Net Fleet Growth by OEM

2014 (393) 2015 (457) 2016 (543) 209 174 148 115 109 105 54 54 56 43 38 39 34 22 19 14 18 15 13 9 14 11 12 8 10 11 7 10 11 5 1 1 1 3 0 0 Mil MD 71+0+00+83+00+0+100 0+0+5550+0+00+52+0 Bell 17+0+00+19+0 0+0+25 0+0+2621+0+00+26+0 10+0+00+12+0 0+0+20 5+0+00+7+0 2+0+00+0+9 0+5+0 5+0+00+0+7 0+5+0 3+0+00+0+8 0+6+0 4+0+00+0+6 0+5+0 1+0+00+0+5 0+0+1 0+1+0 1+0+00+0+00+0+0 Airbus Boeing Kamov Enstrom Sikorsky Avicopter Robinson Leonardo Schweizer

Net Fleet Growth by Mission

2014 (393) 2015 (457) 316 2016 (543) 244 195 70 67 63 53 46 49 49 46 39 22 25 21 21 7 6 7 7 6 6 3 3 10 10 2 SAR

60+0+00+75+00+0+100 0+0+1922+0+00+21+0 12+0+00+15+0 0+0+17 0+0+1514+0+00+16+0 6+0+00+8+0 0+0+72+0+00+2+0 EMS 0+0+72+0+00+3+0 0+0+3 2+0+00+2+0 0+0+21+0+00+2+0 0+0+2 Private Charter Training Offshore Corporate Multi-Mission Law Enforcement Law

Net Fleet Growth by Size Category

2014 (393) 2015 (457) 2016 (543) 292 233 190 137 118 100 60 56 55 54 50 66+0+00+80+00+0+100 0+0+2119+0+00+19+0 35+0+00+42+0 0+0+47 48 0+0+1916+0+00+18+0 Heavy Single Medium Light Twin

ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 29 COUNTRY PROFILE: GREATER CHINA

Within the helicopter sector, China’s civil helicopter fleet Nearly 80% of the fleet is represented by four manufacturers: continues to be among the largest and fastest-growing fleets Airbus, Bell, Sikorsky and Leonardo. Airbus holds the largest in Asia Pacific. The Greater China fleet, including turbine-only, market share with 39% of the overall Greater China fleet and stood at 543 at year end 2016, a significant increase from 40% of the replacement cost, followed by Bell with 21% of the 2015, when the fleet stood at 457. This is also the largest fleet size and 10% of the replacement cost. increase of helicopters witnessed throughout the region, with New Zealand trailing far behind with 31 additions from Airbus has seen significant growth from 2015, increasing the previous year. from 174 to 209 helicopters. Bell increased from 109 to 115, Leonardo increased from 39 to 56 and the Chinese-made Avicopter increased from 22 to 38 in 2016. Fleet by Size Category The majority of the fleet (58%) is involved in various mission operations, with 12% involved in offshore, 10% involved in law Heavy 54 (10%) enforcement and the remainder involved in search and rescue (SAR) missions, charter, emergency medical services (EMS), Light Twin 60 (11%) flight training, corporate and private operations.

A large portion of multi-mission helicopters, including 543 firefighting and tourism operations, is high, compared to other Asia-Pacific countries. Forestry protection operations, including firefighting, has one of the highest demands of all Medium 137 (25%) Single 292 (54%) mission types throughout China. The demand is met with an increased forest protection budget by the government, with 54+25+1110+G expectations of up to 300 helicopters being used for this mission segment within the next three to five years. These Fleet by Mission medium to heavy-sized helicopters are used throughout the year.

Training 10 (2%) Corporate 6 (1%) Powerline patrol and agriculture spraying operations are also EMS 21 (4%) Private 3 increasingly popular and much-needed Charter 22 (4%) mission types, within the ‘multi- SAR 49 (9%) mission’ segment. Law Enforcement Additionally, the downturn in the oil 53 (10%) 543 and gas sector, which has heavily Offshore 63 (12%) impacted countries worldwide, has Multi-Mission left a smaller effect in China. With 316 (58%) expectations of a recovery far off, offshore operators have moved their 58+12+1094+4210+G operations onshore. Diversifying the While the 543 helicopters are spread out throughout the helicopter’s mission type has help to country, small clusters are situated along the eastern maintain some operations. coast. Top operators CITIC Offshore Helicopter Company (COHC) and China Southern Airlines General Aviation The largest operator in Mainland Limited (formerly known as Zhuhai Helicopters), operating China is China’s CITIC Offshore in predominately the offshore segment, are based in the Helicopter Company (COHC), with 68 manufacturing hub of Guangdong. The area surrounding helicopters. The company is heavily Bohai Bay, which is one of the country’s largest oil and gas involved in offshore oil operations and production bases and home to the government-owned China pilot services for ships at port, with National Offshore Oil Corporation (CNOOC), is also home to approximately 30 helicopters (H225, a high number of helicopters, while the mountainous border AS332L1, H155 and A109) dedicated province of Heilongjiang operates a number for border to these operations. security and agriculture.

30 ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 COUNTRY PROFILE: GREATER CHINA

Fleet by OEM Fleet Size Replacement Cost (USD Billions)

Kamov 13 (2%) MD 10 (2%) Mil (3%) Others (2%)

Mil 14 (3%) Schweizer 1 Kamov (3%) Robinson 15 (3%) Airbus (40%) Airbus 209 (39%) Avicopter (8%) Enstrom 18 (3%)

Avicopter 38 (7%) Bell (10%) $4.3 Sikorsky 54 (10%) 543 Leonardo (11%) Leonardo 56 (10%) Sikorsky (23%) Bell 115 (21%) 38+21+108+320+G 39+23+10943+2+G In Taiwan, the total number of civil helicopters (turbine only) largest fleet — the Government Flying Service, providing stood at 27 at the end of 2016, with the National Airborne 24-hour emergency support. Macau’s main operator is Service Corps (NASC) operating the majority of these. Sky Shuttle, which operates mainly AW139s and provides Helicopters in this area are mainly used for disaster relief, transport between Hong Kong, Macau and Shenzhen. SARs, observation, patrol and transportation. Chinese manufacturers have done particularly well in the Hong Kong and Macau also have relatively small civil last year, with a strong presence in the market. The Aviation helicopter fleets. The Hong Kong Government operates the Industry Corporation of China (AVIC), a Chinese state-owned

ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 31 COUNTRY PROFILE: GREATER CHINA

China Fleet by OEM General Aviation. Avicopter will do equally well, through its deals with several government entities, including local public security bureaus. China Minshing Investment Leasing Robinson 14 (3%) Kamov 13 (2%) Holdings, which signed a deal for 100 Airbus helicopters in 2015, will see at least 10 aircraft delivered in 2017. Mil 14 (3%) MD 5 (1%)

Others 1 As the fastest-growing market in Asia Pacific, China’s Enstrom 18 (4%) helicopter sector still faces some challenges. High costs of landing and takeoff are burdensome, particularly for smaller Avicopter 38 (8%) operators. Costs of human capital, including training and Sikorsky 49 (10%) competitive salaries is also gradually increasing. Although 495 China’s new general aviation regulations will benefit the Leonardo 50 (10%) Airbus 188 (38%) industry, the market will need to continue growth in order to uphold support from the government. Bell 105 (21%)

37+21+109+43210+G Hong Kong and Macau Fleet by OEM

aerospace and defense company, successfully completed the first flight of the highly-anticipated AC312E in August 2016. The light twin-engine helicopter is suitable for various Others 1 (5%) Airbus 9 (43%) mission types including medical assistance, transport, SARs, police and VIP, among other operation types. Popular AVIC models in the civil helicopter fleet include the AC301, AC311, AC312 and AC313. MD 5 (24%)

In May 2015, the manufacturer gained more attention 21 when Russian Helicopters agreed to work with AVIC, in an effort to create an advanced heavy-lifting helicopter. The Leonardo 6 (28%) helicopter is expected to have a takeoff weight of 38-tons, with the capacity to carry 10 tons internally and 15 tons on 43+27+246+G an external sling. Taiwan Fleet by OEM The opportunity for Chinese manufacturers and investors will likely increase, as China’s general aviation regulations become more relaxed. Sikorsky 5 (19%) While the Greater China fleet, as of 2016, stood at 543, expectations are that the fleet will increase by around 15%, if the market sees the most of the expected 112 helicopters delivered. This includes 16 helicopters being introduced to the market through government contracts and 13 through 27 large corporations. Leonardo will do exceptionally well in 2017, in great part due to deals with Shanghai Kingwing Bell 10 (37%) 44+Airbus37+19+G 12 (44%)

32 ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 COUNTRY PROFILE: GREATER CHINA

FOR ALL COUNTRY PROFILES VISIT: WWW.ASIANSKYMEDIA.COM

ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 33 COUNTRY PROFILE: GREATER CHINA

Fleet by Model 543 in Total 60+25+21+21+14+14+13+6+4+3+1+1 Airbus 209 (38%) H125 86 H155 25 H135 21 H120 21 AS365 14 H225 14 H130 13 AS332L1 6 AS332L2 4 BK117 3 AS332L 1 H145 1 18+14+3+3+1 Avicopter 38 (7%) AC312 17 AC311 14 Z-11 3 Z-9 3 AC313 1 48+41+14+7+3+1+1 Bell 115 (21%) Bell 407 48 Bell 206 41 Bell 429 14 Bell 205 7 Bell 212 3 Bell 412 1 Bell 427 1

34 ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 COUNTRY PROFILE: GREATER CHINA 18

60+25+21+21+14+14+13+6+4+3+1+1 Enstrom 18 (3%) EN480 18 13 Kamov 13 (2%) KA-32 13 21+17+16+2 Leonardo 56 (10%) AW139 21 AW119 17 AW109 16 SW-4 2 4+3+2+1 MD 10 (2%) MD 900 4 MD 500 3 MD 520 2 MD 600 1 10+4

18+14+3+3+1 Mil 14 (3%) Mi-8 10 Mi-26 4 15 Robinson 15 (3%) R66 15 1 Schweizer 1 S-333 1 17+14+9+6+5+2+1 48+41+14+7+3+1+1 Sikorsky 54 (10%) S-76C++ 17 S-92 14 S-76D 9 S-76C+ 6 S-70A 5 S-76A++ 2 S-76A 1

ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 35 COUNTRY PROFILE: GREATER CHINA

Fleet by Operator 120 Operators in Total

43 Operators shown represent 82% of the fleet 77 Operators - 1-2 aircraft each 68+55+24+23+21+20+19+16+15+12+11+11+9+8+8+7+7+7+6+6+6+6+5+5+5+5 COHC 68

National Police 53

State Grid 24

China Southern 23

Taiwan NASC 21

MOT 20

Kingwing 19

Reignwood 16

Flying Dragon 15

China Eastern 12 4+4 +4 +3+3+3+3+3+3+3+3 +3 Guangzhou Suilian 4 Chongqing GA 11 Heliservices 4 Skyway 10 Henan Guanchen 4 Sichuan Xilin Fengteng 9 Panzhou GA 4 Beijing Capital 8 Qiqihar Kunfeng 4 Hubei Tongcheng 8 Tangshan Lianwang 4 GFS 7 CAFUC 3 Qingdao Helicopter 7 Emerald Pacific 3 Shanghai Heli 7 Guangdong Juxiang 3 6 Beidahuang Guangxi Guanglian 3 6 HEMS 999 Henan Yongxiang 3 Shandong GA 6 Jiangsu Huayu 3 Yunnan Fengxiang 6 Qinghua GA 3 Hubei Yinyan 5 Shandong Gaoxiang 3 Sky Shuttle 5 Wuhan Group 3 Sichuan Tuofeng 5 Xinjiang Kaiyuan 3 Yunnan Hexie 5 Yunnan GA 3

36 ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 COUNTRY PROFILE: GREATER CHINA

Top 10 Operator’s Fleet by Model

68 53

24 23 21 20 68+53+24+23+21+20+19+16+15+1219 16 15 12 68+55+24+23+21+20+19+16+15+12+11+11+9+8+8+7+7+7+6+6+6+6+5+5+5+5 MOT Total COHC Kingwing State Grid State Reignwood Taiwan NASC Taiwan Flying Dragon China Eastern National Police China Southern

Airbus AS332L 1 1 AS332L1 6 6 AS332L2 1 1 AS365 4 9 1 14 H120 2 1 1 4 H125 3 1 9 7 20 H135 7 7 H145 1 1 H155 15 5 20 4+4 +4 +3+3+3+3+3+3+3+3 +3 H225 8 1 1 4 14 Avicopter AC311 5 5 AC312 14 3 17 AC313 1 1 Z-11 2 1 3 Z-9 1 2 3

Bell Bell 205 7 7 Bell 206 3 6 1 10 Bell 212 1 2 3 Bell 407 5 2 8 15 Bell 429 1 2 1 5 9 Enstrom EN480 3 3 Kamov KA-32 8 2 10

Leonardo AW109 2 7 4 2 15 AW119 2 9 11 AW139 8 3 11 Mil Mi-26 3 3 Robinson R66 1 2 2 5

Sikorsky S-70A 5 5 S-76A 1 1 S-76A++ 2 2 S-76C+ 2 4 6 S-76C++ 7 4 6 17 S-76D 8 8 S-92 3 9 1 13 Total 68 53 24 23 21 20 19 16 15 12 271

ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 37 COUNTRY PROFILE: GREATER CHINA

Fleet by Mission and OEM

316

63 53 49 22 100+19+17+15+7+7+3+2+121 10 6 3 SAR EMS Total Private Charter Training Offshore Corporate Multi-Mission Law Enforcement Law

Airbus 123 30 17 22 3 11 1 2 209 Avicopter 30 8 38 Bell 86 5 6 8 1 4 2 3 115 Enstrom 15 3 18 Kamov 11 2 13 Leonardo 16 2 17 11 9 1 56 MD 8 1 1 10 Mil 14 14 Robinson 11 1 3 15 Schweizer 1 1 Sikorsky 2 31 21 54 Total 316 63 53 49 22 21 10 6 3 543

38 ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 COUNTRY PROFILE: GREATER CHINA

Fleet by Age 543 in Total

80

70

60

50

40

30

20

10

0 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Year of Manufacture

As illustrated above, the Greater China region has experienced rapid region served. In 2011, the Civil Aviation Administration of China growth in the last 10-15 years. While the total fleet stands at 543, 411 (CAAC) announced its 12th Five-Year Plan, with intentions toward helicopters were manufactured over the last decade. developing general aviation. A few years later, with the opening of lower altitude airspace in 2014 and subsequent continued relaxation In 2005-2006 as the country continued to develop economically, of regulations in years to follow, the industry has begun to live up growth in the helicopter market became consistent and expected. to its potential. Small operators are now popping up and Chinese Large manufacturers began to see the potential and promise the manufacturers have now joined the competition.

FOR ALL COUNTRY PROFILES VISIT: WWW.ASIANSKYMEDIA.COM

ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 39 COUNTRY PROFILE: GREATER CHINA

New Deliveries

Enstrom 4 (4%) Mil 1 (1%)

Robinson 4 (4%)

Bell 11 (12%) +91 Avicopter 17 (19%) Leonardo 19 (21%)39+Airbus21+19124+41+G 35 (39%)

Pre-owned Additions

Kamov 1 (8%) Sikorsky 5 (42%)

Bell 1 (8%)

Mil 2 (17%) +12 Airbus 3 (25%) 42+25+17+8+8+G Deductions

Avicopter 1 (7%)

Bell 6 (35%) Leonardo 2 (12%)

(18%) Airbus 3 -17 Sikorsky 5 (29%) 35+29+18+12+6+G

40 ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 COUNTRY PROFILE: GREATER CHINA

Additions and Deductions by Model +86 in total

Deductions (-17) New Deliveries (+91) Pre-owned (+12)

H125 23 3 H130 8 H120 -1 2 H145 1 +35 Airbus H155 1 AS365 -1 H135 -1 AC312 14 AC311 2

+16 AC313 1 Avicopter Z-9 -1

Bell 407 7 Bell 429 2 -1 1 1

+6 Bell 206 Bell Bell 412 1 Bell 205 -5

EN480 4 +4 Enstrom

1

+1 KA-32 Kamov

AW119 11 AW139 4

+17 AW109 2 Leonardo SW-4 -2 2

Mi-8 2 +3 Mil Mi-26 1

4

+4 R66 Robinson S-70A 5 S-76A -1 0 S-76A+ -2 Sikorsky S-76B -2

ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 41 LEONARDO HELICOPTERS

INTERVIEW WITH STEFANO ZALONIS VICE PRESIDENT, CHINA

Interview by Litalia Yoakum

ollowing the rebranding of AgustaWestland to Leonardo, the company’s helicopter division Leonardo has committed F to keeping up with the growth in the Asia-Pacific region. As one of the fastest-growing markets for the company, the region’s significance has led the company to invest heavily in customer support and training facilities, as well as the expansion of facilities in Southeast Asia.

42 ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 OPERATOR PROFILE: LEONARDO HELICOPTERS

WHAT IS THE CURRENT OUTLOOK OF THE In Japan, we have over 100 helicopters in operation — double CIVIL HELICOPTER MARKET IN ASIA PACIFIC? the number we had five years ago — a good part of which are for EMS and other parapublic roles. For example, Leonardo is Asia Pacific is the fastest-growing market for Leonardo. the leader in law enforcement, with 42 aircraft in operation. The Company is very successful in China, Japan, Malaysia The new AW169 is gaining traction and so is the AW109 and Australia with countries such as Vietnam, Myanmar Trekker. In the country we have a long standing partnership and Indonesia that are very promising. After a consistent with the distributor Mitsui Bussan. growth in the oil and gas sector, with major operations in Malaysia and Thailand, we are now seeing very good results in emergency medical service (EMS) and Search and Rescue (SAR) helicopters. Of course, and this applies globally, we continue to be the market leader in medium VVIP/executive transport helicopters.

The introduction of new products such as the AW189, the AW169 and the AW109 Trekker is certainly contributing in responding to this quickly growing market. China will definitively lead the fleet growth in Asia Pacific in the coming years. We expect to deliver more than 30 helicopters in 2017.

WHAT ARE A FEW OF THE SUCCESSES LEONARDO HAS ENJOYED OVER THE PAST WHAT IS THE LEONARD COMPANY DOING FEW YEARS? TO KEEP UP WITH THE GROWTH OF ASIA We have definitely enjoyed important successes. PACIFIC?

Leonardo is committed to continuing sustainable and long- Starting from the latest ones: In late 2016, Leonardo term business in the region. We have invested massively in secured a contract with the Chinese operator KingWing the last two years in customer support and training facilities General Aviation for 30 helicopters in EMS configuration, in China, Malaysia, Japan and Australia and will continue to comprising the AW139 and AW169. This order followed do the same in 2017. New products are being, or will soon another contract with KingWing for 25 AW119Kx helicopters be, introduced in these countries. The AW109 Trekker will in EMS configuration signed at the beginning of 2016. complement our product offer, ranging from the single engine These achievements set the start of the largest EMS AW119 in the 3-ton class to the AW189 in the 8.5-ton class. program in China.

In China, we increased our presence in terms of personnel, The law enforcement market will also experience an also Chinese-speaking, in the country. We opened a new important growth in the coming years due to the various warehouse in Shanghai in order to serve the growing helicopter procurement programs from different Chinese demands from our increasing fleet and now we are the provinces. Leonardo is already the leader in China in this only OEM with a warehouse in mainland China. We have segment, with a market share close to 40%. We delivered reinforced our excellent collaborations with different sales around 20 helicopters in 2016 in China. partners and service centers.

We also have an established relationship with one of the Similar activities have been going in Malaysia, our hub for largest operator in the world, Weststar of Malaysia, which Southeast Asia, with the expansion of our facility with a operates a fleet of more than 30 helicopters, mainly AW139 new hangar, increasing the effectiveness with which we and AW189. Their operations are constantly supported by respond to our customers, thus reducing response time and our training and customer support activities based in Kuala shortening waiting lists. Lumpur, our regional hub, recently relocated to new and state of the art facilities at Subang Airport. HAS LEONARDO’S HELICOPTER DIVISION Australia is also a market in which we are constantly growing, BEEN IMPACTED BY THE DOWNTURN IN OIL with New South Wales and Victoria (the two most populated AND GAS PRODUCTION? regions in the country) operating our AW139 for EMS The downturn in oil price has had an impact on our activities missions. We have delivered 24 units of the type just in the related to oil and gas; however, as different O & G operators last two years succeeding in all EMS tender.

ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 43 OPERATOR PROFILE: LEONARDO HELICOPTERS

are looking for solutions in order to reduce the operating WHAT ARE SOME OF THE LATEST costs related to their activities, we respond with the AW189, TECHNOLOGICAL DEVELOPMENTS THAT that is designed to minimize the maintenance activities and CAN BE EXPECTED FROM THE HELICOPTER the operating costs. DIVISION?

On the other hand, our products have shown a great Leonardo is investigating and developing a wide range of resilience to success in other segments. For instance, technology solutions, part of them in the framework of EU/ AW139 is experiencing great successes in VIP, EMS and law industry cofounded initiatives. Among them, active main enforcement segments in China and Australia. rotor blade and electric tail rotor drive, as well as the next generation of civil tiltrotor. All of these efforts are aimed at making vertical flight greener, more efficient, even safer HOW ARE THE AW169 AND AW189 MODELS and allow levels of performance and capability, which are DOING IN THIS REGION? unprecedented in the market. The AW189 is an excellent search and rescue solution, due to its long range safety features that include a proven 50-minute WHAT CAN THE INDUSTRY EXPECT FROM dry run gearbox. The AW169 is the platform designed to LEONARDO’S HELICOPTER DIVISION IN THE set the new benchmark in the EMS segment. The recent COMING YEARS? success confirms the appreciation from the market for this new helicopter, with recent success in Korea and UK. Good In terms of new models, Leonardo is busy introducing possibilities for the AW169 also in the Law Enforcement and three models (AW109 Trekker being developed, AW189 and VIP. Both models are performing well, each with around 150 AW169 already certified and in service), so there’s definitely units ordered so far combining orders and options. a big effort to make sure that both existing and potential customers are satisfied.

WHICH LEONARDO MODELS ARE DOING Let’s not forget that the Company is also investing on the NOTABLY WELL? revolutionary AW609 tiltrotor, with certification expected later The AW139 is a mature product continuing to be the next year. We know for certain there’s a lot interest in Asia for benchmark for intermediate helicopters, with over 970 EMS, SAR and VIP/Corporate transport roles. helicopters sold worldwide. On the light side, the single engine AW119Kx is the go-to helicopter for EMS in China, and www.leonardocompany.com the twin AW109 legacy models are very successful in Japan for the same role.

44 ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 OPERATOR PROFILE: HELIKOREA

AIRCRAFT SPOTLIGHT

LEONARDO HELICOPTERS AW169 & AW189

Derived from the multi-mission helicopter AW149, the 8.3/8.6-ton, twin-turbine AW189 is a super mid-size aircraft designed to answer the growing market demand for a versatile, affordable, multi- mission platform. Its class-leading speed, low internal vibration and noise minimize airborne time and provide exceptional passenger comfort.

ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 45 AIRCRAFT SPOTLIGHT: AW169 & AW189

he AW189, which first performed its maiden flight in 2013, has a large and open cabin, suitable T for varying configurations and up to 18 seats. Optimized for long range offshore transport and search and rescue (SAR) missions, the AW189 is unique in having a 50 minute 'run-dry' capable main gear box, exceeding current certification standards and offering unmatched safety and reliability for long range offshore operations.

A typical offshore configuration for the AW189 consists of 16 individual crashworthy seats, with separate four-point safety belts, external life rafts and emergency floats and weather radar, among a number of inclusions.

For all-weather search and rescue (SAR) and medical cabin. Its cockpit combines the latest-generation avionics evacuation (MEDEVAC) missions, the AW189’s configuration with a full digital glass cockpit, minimizing the workload of features a low-workload fully integrated glass cockpit, pilots and provides single/dual pilot VFR/IFR capability. In comprehensive sensor options, spacious cabin equipped accordance with its high safety standards, the AW169 is to ensure operational capability. Using advanced in-house complete with a crash-resistant airframe, large windows developed avionics and systems, the AW189 includes for emergency egress and one engine inoperative (OEI) a variety of search modes and patterns, a hover point capability, even in challenging hot and high conditions. approach (HPA), full mission equipment integration with Safety on the ground is enhanced by the high clearance flight management system (FMS) and an obstacle proximity of the main and tail rotors. The auxiliary power unit (APU) lidar system (OPLS). mode ensures the continued operation of electrical end hydraulic systems.

The configurability of the helicopter allows for adaptability to a variety of missions. For private and executive support, the AW169 is designed to relax or to conduct business comfortably and can be arranged in a variety of configurations, ranging from a luxurious five-seat design to an eight-seat design. Its spacious interior, easily accessible via an automatically deployed footstep, is designed for the ultimate in-flight experience. The executive configuration comes complete with a wireless cabin control and entertainment system.

For law enforcement and emergency medical service (EMS) operations, the AW169 is suitable for air observation, aerial AgustaWestland announced that production of the AW169 support, drug enforcement, border patrol, troop transport, was underway at the Farnborough International Air Show. medical evacuation, disaster relief and utility, among other At the time of its launch in 2015, the 4.6 ton, twin-turbine, operations. The aircraft can be customized into a number mid-size helicopter was the first all new aircraft in its weight of ways suitable for equipment, cargo hooks, internal category to enter the market in over 30 years. Issued the weapons, stretchers, etc. Features, ideal for an EMS or law European Aviation Safety Agency (EASA) and Federal Aviation enforcement mission, include outstanding performance in Administration (FAA) Part 29 certifications for performance hot and high conditions, high power margins for excellent and safety, the AW169 is acclaimed for its reliability and hovering and controllability characteristics, high cruising versatility in even the most challenging conditions. speed, maximized range and endurance and heavy-duty landing gear for unprepared terrains. Accommodating seven to 10 passengers, the AW169 is positioned between the eight-seat AW109 GrandNew and Offshore operation configurations are also accommodated the 15-seat AW139, offering a large and rapidly configurable by the AW169, compliant with the most rigorous standards

46 ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 AIRCRAFT SPOTLIGHT: AW169 & AW189

required by oil and gas operators. Features of this The militarized variant of the AW169 is the AW169M, which configuration include the health and usage monitoring can equally be customized to fit any standards required of a system (HUMS), emergency flotations and life rafts, weather military aircraft. and search radar, digital map, enhanced vision system and retractable landing gear, among other features. www.leonardocompany.com

SPECS

AW169 AW189

Leading Features Leading Features Certification Category EASA CS‐29 / FAR Part 29 Certification Category EASA CS‐29 / FAR Part 29 Max Take‐Off Weight 4,600 kg / 10,141 lb Max Take‐Off Weight 8,300 - 8,600 kg* / 18,298 lb - 18,960 lb*

*An optional MTOW (Internal) kit of 8,600 kg is available.

Power Power Powerplant 2 x PW210A series turbosha�s Powerplant 2 x GE CT7‐2E1 Shaft Horsepower 1,108 SHP each with FADEC Shaft Horsepower 2,000 SHP each with FADEC

Performance Performance Maximum Speed 306 km/h / 165 Knots Maximum Speed 313 km/h / 169 Knots Service Ceiling 4,572 m / 15,000 ft Service Ceiling 3,048 m / 10,000 ft Maximum Range 820 km* / 440 N.M.* Maximum Range 1,111 km* / 600 N.M*

*at 5,000 ft, no reserve, standard fuel system *EMS Configuration, no reserve with auxiliary fuel tank

Capacity Capacity Flight Crew 1 - 2 Flight Crew 1 - 2 Passenger seating Up to 10 Passenger seating Up to 19

External Dimensions External Dimensions Overall Length 14.65 m* / 48 ft 1 in* Overall Length 17.60 m* / 57 ft 9 in* Overall Height 4.50 m* / 14 ft 9 in* Overall Height 5.06 m* / 16 ft 7 in* Rotor Diameter 12.12 m / 39 ft 9 in Rotor Diameter 14.6 m / 47 ft 11 in

*Rotors turning *Rotors turning

Internal Dimensions Internal Dimensions Cabin Dimensions Width 2.05 m / 6 ft 9 in Cabin Dimensions Width 2.43 m / 7 ft 12 in Height 1.32 m / 4 ft 4 in Height 1.42 m / 4 ft 8 in Length* 2.77 m / 9 ft 1 in Length* 3.47 m / 11 ft 5 in Main Cabin Volume* 6.3 m³ / 222 ft³ Main Cabin Volume* 11.2 m³ / 396 ft³ Baggage Compartment 1.4 m³ / 49.44 ft³ Baggage Compartment 2.4 m³ / 85 ft³

*Dual Pilot configuration *Dual Pilot configuration

Data Source: EASA Type Certificate Data Sheet and Leonardo marketing brochures

ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 47 APPENDIX

MISSION CATEGORIES

In this report, mission categories include: The largest mission category is broadly defined as multi- mission. Most helicopters in this category are active in more • Multi-Mission than one mission and can be configured to perform various • Offshore Operations tasks. This includes a number of subcategories: • Search and Rescue (SAR) • Onshore O & G and Mining (distinct from offshore) • Emergency Medical Service (EMS) • Cargo Lifting • Law Enforcement • Forestry (surveying, logging and protection) • Flight Training • Firefighting • Corporate • Aerial Photography • Private (recreational) • Aerial Tours • Charter • Agriculture and Pest Control • Powerline Repair and Survey • Media Industry

SIZE CATEGORIES SUPER SINGLE LIGHT TWIN MEDIUM MEDIUM HEAVY

H120 EN480 AS355 AS365 AW169 H175 AS332L H125 FH-1100 BK117 H155 Mi-2 Bell 525 AS332L1 H130 K-Max BO105 AC312 S-70A AW189 AS332L2 SA313 AH.1 H135 Z-9 S-76A H225 SA315 AW009 H145 Bell 212 S-76A+ AC313 SA316 AW119 Bell 222 Bell 214 S-76A++ BV107 SA319 MD 500 Bell 230 Bell 412 S-76B BV234 SA341 MD 520 Bell 427 Bell 430 S-76C AW101 AC311 MD 530 Bell 429 Dhruv S-76C+ Mi-26 Z-11 MD 600 AW109 Surion S-76C++ Mi-8 Bell 204 Mi-34 MD 900 KA-32 S-76D S-61 Bell 205 R66 AW139 S-64 Bell 206 S-333 S-92 Bell 407 S-58 Bell AH-1

48 ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 APPENDIX

COMPANY NAMES

OEMs

Airbus Airbus Helicopters Robinson Robinson Helicopter Avicopter Aviation Industry Corporation of China Mil Mil Moscow Helicopter Plant Bell Bell Helicopter Kamov Kamov Design Bureau Leonardo Leonardo Helicopters Enstrom Enstrom Helicopter MD MD Helicopters HAL Hindustan Aeronautics Limited Sikorsky Sikorsky Aircraft

OPERATORS

Australia Babcock Babcock International Group plc Australia Bristow Bristow Helicopters Australia Pty. Ltd. Australia HNZ Helicopters New Zealand Inc. Brunei Shell Brunei Brunei Shell Petroleum Co Sdn Bhd Canada CHC CHC Helicopter Corporation China CAFUC Civil Aviation Flight University of China China China Eastern Eastern General Aviation Corporation Ltd. China China Southern China Southern Airlines General Aviation Limited China COHC CITIC Offshore Helicopter Co., Ltd. China MOT Ministry of Transport of the People’s Republic of China Hong Kong GFS The Government Flying Service India Global Vectra Global Vectra Helicorp Limited India Heligo Heligo Charters Pvt. Ltd. Indonesia Travira Travira Air Malaysia Awan Inspirasi Awan Inspirasi Sdn Bhd Malaysia MHS MHS Aviation Berhad Malaysia Weststar Weststar Aviation Services Sendirian Berhad Philippines INAEC INAEC Aviation Corporation South Korea Helikorea Heli Korea Co., Ltd. Thailand SFS SFS Aviation Co., Ltd. Thailand TAS Thai Aviation Services Ltd. Thailand UOA United Offshore Aviation Co.,Ltd. Vietnam VNH Vietnam Helicopter Corporation

LESSORS

Australia ANZ Australia and New Zealand Banking Group Australia Capital Finance Capital Finance Australia Limited Australia VIH VIH Aviation Group, Ltd. Australia Westpac Westpac Banking Corporation Canada Eagle Eagle Copters Ltd. Ireland LCI Lease Corporation International Limited New Zealand Airwork Airwork (NZ) Ltd. United States Columbia Heli. Columbia Helicopters Leasing, Inc. United States Milestone Milestone Aviation Group United States Textron Textron Financial Corporation United States Waypoint Waypoint Leasing Services LLC

ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016 49 AIRCRAFT SPOTLIGHT: AW169 & AW189

in more than 27 countries, and a fleet of more than 144 aircraft on lease, coupled with a large

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Copyright © 201 7 Waypoint Leasing Services LLC. All rights reserved. 50 ASIA PACIFIC REGION CIVIL HELICOPTER FLEET REPORT – YEAR END 2016