The GREATER CHINA CIVIL HELICOPTER FLEET REPORT Year End 2013 ABOUT ASIAN SKY GROUP
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The GREATER CHINA CIVIL HELICOPTER FLEET REPORT Year End 2013 ABOUT ASIAN SKY GROUP ASIAN SKY GROUP LIMITED is headquartered in Hong Kong with offices throughout China. It has assembled the most experienced business aviation team in the Asia-Pacific region to provide a wide range of consulting services for both fixed-wing and rotary-wing aircraft. Asian Sky Group provides access to a significant customer base around the world with the help of its exclusive partners: Avpro Inc., the largest business jet brokerage firm in the US; and AVIC International Development Corporation, the largest state-owned aviation enterprise in mainland China. Asian Sky Group is backed by SEACOR Holdings Inc., a publically listed US company ( NYSE: “CKH” ) with over US$ 1B in revenue and nearly US$ 3B in assets, and also by Avion Pacific Limited, a mainland China-based general aviation service provider with 20 years of experience and 6 offices and bases throughout the country. Asian Sky Group provides its clients with the following aviation consulting services: 1) AIRCRAFT SALES, such as acquisition or remarketing; selection of aircraft, asset financing, structuring & registration and operator; inspections and appraisals; contractual support; 2) COMPLETION MANAGEMENT, such as cabin definition; facility selection; completion oversight; delivery and regulatory compliance; contractual support; 3) OPERATION OVERSIGHT, such as invoice analysis and owner representation; 4) VIP CHARTER SERVICES; 5) SPECIAL PROJECTS and 6) TRANSACTIONAL ADVISORY. INTRODUCTION ASIAN SKY GROUP (“ASG”) is proud to present the “Greater China Civil Helicopter Fleet Report”. This report will provide complete coverage of the civil helicopter market in the Greater China region, which includes mainland China, Hong Kong, Macau and Taiwan. The report follows ASG’s previously established “Greater China Business Jet Fleet Report”, which was first published in March, 2013. For a copy of the “Greater China Business Jet Fleet Report” and its first half 2013 update, please visit us at www.asianskygroup.com. TABLE OF CONTENTS 2 EXECUTIVE SUMMARY 4 KEY FINDINGS 6 CIVIL HELICOPTER MARKET IN GREATER CHINA 6 CHINA AIRSPACE REFORMS DETAILED FLEET BREAKDOWN BY: 8 ORIGINAL EQUIPMENT MANUFACTURERS (OEM) 13 MISSION CATEGORIES 19 OPERATORS 22 WEIGHT CLASSIFICATIONS 28 AGE DISTRIBUTION 34 THE NEAR FUTURE AND TRENDS ASIAN SKY GROUP would like to graciously acknowledge the contributions made by numerous operators, OEMs and organizations to this report, without which a reasonable level of accuracy could not have been achieved. The report is nevertheless the first of its type and undoubtedly there will be perceived errors. Asian Sky Group welcomes your comments, questions and general thoughts and looks forward to producing an even better second version of the report in the future. 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”. Thank you for your interest in this report and we hope you find the information useful. If you would like to receive further information about our services, please contact us at [email protected] or visit us at www.asianskygroup.com. The GREATER CHINA CIVIL HELICOPTER FLEET REPORT - YEAR END 2013 1 EXECUTIVE SUMMARY Over the past four years, the civil helicopter fleet in Greater China – including law enforcement and government sponsored Search and Rescue (SAR) operations but excluding military applications – has doubled in size, growing at nearly 20% annually. As of year-end 2013, the Greater China fleet numbered 465 Civil helicopters, with 424 based in Mainland China, 30 in Hong Kong and Macau, and 11 in Taiwan. While growth in 2013 was consistent with previous years, Asian Sky Group expects even stronger growth in 2014 and 2015, as the civil helicopter industry in Greater China and its related infrastructure continues to develop. Heilongjiang 30 Xinjiang Liaoning Beijing 6 Inner Mongolia 4 61 3 Tianjin Hebei 18 9 Shandong 19 1 Henan Jiangsu Shaanxi 18 18 26 Shanghai Hubei 3 Sichuan 40 19 17 4 Hunan 3 7 2 2 Yunnan Guangdong Taiwan 10 5 96 11 30 Hong Kong Hainan 3 2 The GREATER CHINA CIVIL HELICOPTER FLEET REPORT - YEAR END 2013 Helicopter operations in Greater China have developed along mission specific geographic lines. Large operators such as CITIC Offshore Helicopter Corporation (COHC) and China Southern Helicopter Corporation (CSHC) - both based in Guangdong province along the South Eastern coast - primarily serve the offshore oil and gas industry which has been experiencing high growth for the last several years, as exploration in the South China Sea increases to match China’s growing energy needs. The northern city of Tianjin has also developed a significant helicopter fleet to service the Bohai Bay oil producing fields, off of China’s North East coast. Cities such as Beijing, Shanghai and Hong Kong are home to law enforcement and government flight departments, such as mainland China’s Ministry of Transportation (MOT) and Hong Kong’s Government Flying Service (GFS), both of which provide Search and Rescue (SAR) and Emergency Medical Services (EMS). Areas approved for low altitude civil aviation flights, such as Heilongjiang province in the Northeast, are home to several general aviation and flight training operators with a high number of helicopters in their fleet. But with less than 30% of mainland China’s total area currently approved for low altitude airspace usage, ASG expects recent and upcoming reforms in China’s airspace regulations to lead to further growth and development in the civil helicopter industry (See section titled “CHINA AIRSPACE REFORMS”). Changes in regulations should help lift the country’s aviation industry and encourage growth, which in turn should encourage more investment.Development of the general aviation industry is also expected to enhance other related industries, including aircraft manufacturing, maintenance, infrastructure and training. The GREATER CHINA CIVIL HELICOPTER FLEET REPORT - YEAR END 2013 3 KEY FINDINGS The majority of Greater China’s helicopters operate in proximity to large cities and along coastal areas, with Guangdong province on the Southeast coast being an operating base for almost a quarter of China’s helicopters. The Original Equipment Manufacturer (OEM) market leader by number of aircraft and by replacement value is Airbus Helicopters (formally Eurocopter) with 121 helicopters in Greater China, representing 26% of the market. Based on an estimated aircraft replacement cost analysis, Airbus Helicopters make up nearly 40% of the market. Bell Helicopters is gaining a stronger presence with a large number of aircraft delivered during 2013, adding 32% to the Bell fleet in Greater China. The single engine Bell 407, Bell 206 and the Airbus Helicopter AS350 have become the most prevalent models in Greater China. The Bell 407 fleet doubled in 2013. Sikorsky Helicopters continues to have a strong presence in the offshore oil and gas sector and maintains its dominance in the heavy and medium helicopter categories. Despite its 9% market share by numbers, it represents 30% of the market by aircraft replacement value. Of the four major OEMs, Sikorsky is the only one that does not have a light or single engine product line and therefore is less represented in total figures. Sikorsky’s market share is expected to rise due to firm orders in 2013. Of all helicopter mission categories in Greater China, offshore helicopter operations grew by 32% during 2013, almost double the growth rate of other mission categories. This growth can be attributed to China’s growing investment in offshore oil and gas exploration in recent years and its plans to further develop the offshore oil and gas industry. The light single-engine helicopter segment has shown a growth rate of nearly 30%. This is similar to trends in other regions in the world, however medium helicopters are still expected to hold a dominant share in the Greater China market. The medium and heavy helicopter segments in Greater China represent approximately 30% of the market by numbers but over 80% by aircraft replacement value. There are 159 piston engine helicopters in Greater China, representing 34% of the market by numbers but only 2% by replacement value. 4 The GREATER CHINA CIVIL HELICOPTER FLEET REPORT - YEAR END 2013 The GREATER CHINA CIVIL HELICOPTER FLEET REPORT - YEAR END 2013 5 CIVIL HELICOPTER MARKET IN GREATER CHINA In line with a surging Chinese economy in recent years, China’s general aviation market is also expected to take off, with many predicting it could become one of the world’s largest markets. As noted in previous market studies and by the media, there have historically been several key impediments to the growth of general aviation in Greater China. These factors include air space restrictions, a lack of supporting infrastructure, a lack of available civilian helicopter pilots and technicians, and the difficulty in qualifying for an Air Operators Certificate (AOC) due to strict regulatory requirements. Tax and other regulatory issues, including the differences between state-owned and independent operators, have also contributed to the slower development of the industry. Despite China’s land mass and population, high GDP growth and a large industrial sector, it has traditionally been more difficult to set up private general aviation companies, corporate flight departments or other dedicated helicopter