NEW Flying the boundary layer by Mark Huber In Louisville at last year’s Heli-Expo, the world’s it was one of the worst in memory for the com- largest helicopter trade show, it snowed. Many mercial helicopter business, fueled mainly by oil demonstration flights were canceled. From the prices that sunk to a low of $26 per barrel before dais at the annual awards dinner, industry gen- beginning a slow climb back to rationality, a try led the assembled in song, My Old Kentucky domestic air ambulance industry that appears to Home, a melancholic state ballad that can evoke have reached capacity and the continuing eco- weeping amongst the citizenry. Somehow it all nomic uncertainty worldwide. seemed appropriate. Despite the brave public face The perfect storm in many ways has been unprec- the industry tried to project to the world last year, edented. Bell CEO Mitch Snyder stunned an © 2017 AIN Publications. All Rights Reserved. For Reprints go to www.ainonline.com AVIATION INTERNATIONAL NEWS • FEBRUARY 2016 New Rotorcraft audience of local Fort Worth business leaders in OEMs Feel the Bite Globally December when he told them that the worldwide Reflecting the continued softness in both the market for commercial helicopters has shrunk military and civil helicopter sectors, Leonardo by 50 percent since 2013. Bell shelved plans to said that new AgustaWestland helicopter orders build the new 505 light single at a purpose-built fell to €580 million (just over $611 million) for green-field plant in Lafayette, La., moving pro- the fall quarter from €624 million (nearly $658 duction to its commercial plant in Mirabel, Que- million) from the year-ago period and dropped bec—where there is plenty of excess capacity—as to €1.538 billion ($1.6 billion) for the first nine part of sweeping economic moves that put hun- months of 2016 from €2.881 billion ($3 billion) dreds out of work. Bell suffered a more serious from the year-ago period. The helicopter order blow when the first prototype of the 525 super- backlog also dropped, down to €9.669 billion medium twin broke up in flight in July. Flight- ($10 billion) for the first nine months of last testing for that program remains on hold. year, from €11.7 billion ($12.3 billion) from the At the beginning of last year, Honeywell adjusted year-ago period. The helicopter earnings margins its turbine helicopter delivery forecast downward have also declined, slipping to 9.7 percent for the yet again, dinging it another 10 percent, mainly to quarter and 11.1 percent for the year. The much- acknowledge continuing softness in the oil-and- heralded and long-delayed AW609 civil tiltrotor gas market. Safran’s helicopter engine deliveries program was further delayed after the second pro- were down 15 percent in 2015 compared to 2014 totype aircraft crashed in late 2015 in Italy and and the 2016 numbers promise to be worse. Last Italian prosecutors temporarily impounded the year the company delayed or shelved several pro- third flight-test aircraft last summer as part of the grams in response to market conditions. On the crash investigation. heels of posting a 17-percent decline in earnings Russian Helicopters is also feeling the bite, with this fall, Airbus Helicopters has announced a plan new civil programs such as the Ka-62 experienc- to trim its workforce by 582. For the third quar- ing significant delays. The company reported ter, revenue was off 3 percent while earnings slid plummeting income for the first six months of $219 million from the year-ago period. last year, down 24.1 percent from the year-ago The revenue slide was fueled by waning demand period to $156 million. for super-medium and heavy helicopters, as well As bad as things are at the OEMs, some oper- as an overall drop in commercial hours flown. ators have had it even worse. Bankrupt helicop- Airbus Helicopters has also been hurt by the ter OGP services company CHC announced a worldwide grounding of the H225 Super Puma financial restructuring plan on October 11 that series in June following a fatal April 29 North will recapitalize the enterprise with $300 mil- Sea crash. While the EASA lifted the ground- lion in new capital and leasing lines of $150 mil- ing in October, it remains in force in the UK and lion. GE Capital’s Milestone Aviation Group Norway. In addition to trimming its workforce, and its affiliates are taking the lead on the lat- Airbus said it is continuing “transformation mea- ter. CHC filed Chapter 11 bankruptcy in the sures and efforts to adapt to market challenges.” Northern District of Texas on May 5 and sub- One of those adaptations could be a delay in sequently announced plans to shed most of its the company’s marquis 13,000-pound-class H160 leased helicopter fleet, reducing its overall fleet medium-twin program. Projected deliveries of size to 75 from 230. At the time of the bank- that aircraft have slipped to 2019 from 2018, with ruptcy filing, the company listed debts of $2.19 a third prototype scheduled to join the program billion against assets of $2.17 billion as of Jan- early this year. uary 31 last year. © 2017 AIN Publications. All Rights Reserved. For Reprints go to www.ainonline.com AVIATION INTERNATIONAL NEWS • FEBRUARY 2016 New Rotorcraft Erickson filed Chapter 11 bankruptcy Novem- contracted, and Air Methods noted in a public ber 8 in the U.S. Bankruptcy Court Northern Dis- filing with the U.S. Security and Exchange Com- trict of Dallas, listing $561 million in debt. The mission that it was mulling deferral of some new move comes after Portland, Ore.-based Erick- aircraft deliveries on a 10-year order for 200 new son missed scheduled November 1 debt interest Bell 407GXPs. “During 2016 we began discus- payments and days after the resignation of for- sions with Bell Helicopter Textron to modify the mer chairman Quinn Morgan from Erickson’s terms of the purchase agreement, including the board. Companies controlled by Morgan bought total number of aircraft to be delivered under Erickson in 2007, took it public in 2012 and engi- the agreement and application of related depos- neered its 2013 acquisition of Evergreen Helicop- its,” the company noted while later reaffirming its ters and Air Amazonia, which burdened Erickson commitment to the model. with $355 million in debt at the same time the Against this backdrop, a case for pessimism global oil-and-gas market was collapsing. Erick- would be easy, even logical. Yet there is no short- son subsequently lost major defense support and age of new helicopter programs, while a few albeit a critical fire-suppression contract from the U.S. on stretched timetables, driven by the omnipres- Forest Service, leading it to post large quarterly ent needs for speed, range and economy from new losses over the last several years. The company is technology. Even in this market, helicopter leasing currently operating with $60 million in debtor- companies are still regularly announcing deals: in-possession financing from lien holders as it Milestone is expanding into helicopter EMS, LCI navigates court-supervised reorganization from is already fully entrenched there and Waypoint which it plans to emerge later this year. Erick- continues to do OGP deals. son employs 700 people worldwide and operates Among OEMs the consensus appears to be that a diverse rotorcraft fleet that includes the S-64 the market might be getting ready to climb and AirCrane, for which it holds the type certificate. new products need to be readied for the pipeline As early as last March, OGP operator Bris- when it does. But for now, OEMs are flying an tow Group hinted for the first time that it might uncomfortable boundary layer: Facing the twin be forced to cancel orders or at least defer some challenges of declining revenue in a down mar- new helicopter deliveries and will turn back some ket and an immediate need to continue develop- leased helicopters. Through the end of the year, ment funding to remain competitive in the future. the company continued to post large quarterly losses, and oil-and-gas revenue is down 25 per- Piston Singles cent from comparable periods in 2015, although company executives believe the market has now Robinson R44 Cadet bumped bottom. Robinson delivered the first R44 Cadets last year. Not so apparently for the helicopter air ambu- The two-seat Cadet provides greater performance lance industry in the United States, which faces margins than the standard four-seat R44, a 2,400- a two-pronged assault from over-saturation and hour TBO and a (2016) base price of $339,000 downward reimbursement pressure from public or $367,000 with floats. Robinson developed and private medical insurers. Air Methods, the the Cadet specifically for the training market. It nation’s largest HEMS provider, notes that it col- retains the same basic airframe, rotor system and lected on only 74 percent of private insurance Lycoming O-540-F1B5 as the R44 Raven I; how- claims in the first quarter of last year. For the ever, the rear seats are gone and the aft compart- first time since records have been kept, the size ment has been reconfigured for cargo. Maximum of the operational domestic helicopter EMS fleet takeoff weight is 2,200 pounds, 200 pounds short © 2017 AIN Publications. All Rights Reserved. For Reprints go to www.ainonline.com AVIATION INTERNATIONAL NEWS • FEBRUARY 2016 New Rotorcraft Cicare Model 12 of the Raven I’s. The engine is de-rated to produce two-seat TH180 in May last year, three months 210 hp for takeoff and 185 hp continuous (down after the first test aircraft was destroyed in a hard from 225/205 hp in the Raven I).