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Anton Tisov, Avia Solutions Group, explains that although the growth of the helicopter market is still mainly driven by the demand in the military sector, the civil market is steadily increasing its share in the segment due to the accelerating regional demand for civil helicopters in the global economy
Along with military budget cuts in various countries, the change is largely driven by the need to replace the ageing aircraft and support the organic growth of commercial and private operators. Furthermore, some industry players see a potential for civil helicopters to enter the regional aviation segment. However, regardless of the fact that a rotorcraft-based regional aviation can potentially offer prompt connectivity without the need for costly development of the infrastructure, the market still remains rather hesitant about replacing regional jets with helicopters.
Growing demand for civil helicopters
At the time when fuel prices were low and cities were enjoying large investment flows, the idea of helicopters operating in and out of the urban heliports seemed feasible. Today, however, when the fuel prices alone correspond to almost a third of all operators’ costs, only a handful of passenger helicopter services remain in operation around the world. Moreover, the issue of noise-related concerns still remains one of the most prominent obstacles for a more intense use of helicopters within urban areas.
However, the aforementioned factors haven’t stopped the global rotorcraft industry from rapid development and change. As governments continue scrutinising their spending on defence, the market seems to be ready for a shift from military to civil helicopters. The latter are projected to become the main source of demand for manufacturers as early as 2020.
“The growth of the civil rotorcraft segment is being driven by a set of various factors, one of which is the shortage of the transport infrastructure, particularly in larger urban areas. In the middle of the 20th century there was only one true megalopolis - New York. Today we have almost 25 cities with the population topping 10 million, and a dozen more to come in the following decade. As the traditional means of transportation are already incapable of supporting the existing urban areas, the need for alternative commuting solutions has become a matter of urgency,” comments Anatolij Legenzov, the CEO of Helisota.
The rapidly growing urban population, increasing prosperity and further business development will eventually spur up the demand for inner-city air travel, particularly in the emerging markets. The civil rotorcraft market is also counting on the support from the energy industry which remains heavily focused on maintaining the development of its offshore oil and gas exploration segment.
Future deliveries aim at emerging markets
In the meantime, the traditional civil helicopter markets - North America and Europe - have been subject to a noticeable decline for several years now. For instance, the UK civil helicopter market has been shrinking for five years in a row - from 2306 helicopters in 2009 to 2247 in 2013. Moreover, according to the UK CAA, the demand for helicopter air services within London (Heathrow) and London City Control Zones has been also quite volatile over the years, decreasing from approx. 19 300 operations in 2010 to 13 700 in 2012, showing only minor signs of recovery in 2013.
Meanwhile, the situation in such rapidly developing markets as Brazil is completely different. This South American country has more than doubled the number of its helicopters over the last eight years. According to the Brazilian ANAC, there are currently around 2040 choppers roaming the Brazilian skies.
In terms of growth, the South African market is not that far behind. In 2006 there were only 898 rotorcrafts operated in its territory. In 2013 there were already approximately 1200 helicopters registered in the country.
In the meantime, GosNIIGA reports that over the last 5 years the Russian market has welcomed 355 new helicopters, 287 of which were non-Russian-built light and medium-lift machines.
Regional destinations - potential niche for helicopters
According to the CEO of Helisota, the emerging markets remain the strongest force behind the positive global trend in the helicopter industry, the same as in the overall aviation market. However, the latter is mostly driven by the increasing popularity of the narrow and wide body fixed-wing aircraft, as opposed to the growth in the regional aircraft segment. This trend is reflected in the expert prognosis that the share of regional airplanes in the global market will decline from 13% to 6% during the next 20 years. As a result, manufacturers have grounds to anticipate that helicopters will overtake a certain share in the segment of short-haul flights, currently occupied by regional aircraft.
“One of the reasons why helicopters have long remained an unpopular means of transportation is related to the levels of noise associated with their utilisation,” says A. Legenzov, the CEO of Helisota. “But relatively recently this issue which has previously kept operators away from the idea of rotary-wing passenger services has also started to affect most large airports which serve major cities. The ongoing growth in air traffic and the associated concerns about the noise and environmental impact have kept airport infrastructure from expanding in line with the growth in demand resulting in airport congestion. Thus the idea of using helicopters to service commuter and regional routes has been brought back to life.”
For instance, recently, the authorities in Moscow have decided to include rotorcraft air transportation in its strategic transport development plan. It is anticipated that 10 new heliports will be launched around the Russian capital by 2015 and serve, amongst other, approximately 200 private helicopters which are currently being operated in the Moscow’s region. Moreover, local market players are planning to expand the network and cover several other nearby regions in order to facilitate access to a number of short-haul regional destinations.
Capacity versus demand
Meanwhile, each take-off and landing, whether it is a 19-seat Beechcraft or a 180-seat Airbus - requires a runway slot. Therefore, when solving the ‘capacity versus demand’ dilemma, it often makes more sense to take smaller fixed-wing aircraft out of the equation and free up the slots for larger aircraft, which indeed has become a common practice among a lot of carriers. Nevertheless, as the demand for regional air travel remains high, airport congestion issues pose the need for immediate action, which is exactly where new rotorcraft engineering solutions could come into play.
“Of course, in some cases it is considerably easy to create additional capacity. However, in most cases, subject to the availability of the surrounding land, if one wishes to build a new runway any time soon, the time to take action has already passed. Otherwise, an additional runway will appear
only sometime in the next decade, meaning millions of lost passengers. Therefore, if expanding the infrastructure is not an option and you need to get a relatively low number of passengers off the runway, a vertical lift is one of the most viable solutions that comes to mind, since for that you only need a helipad,” says A. Legenzov.
Supporting the growing rotorcraft fleet
In the meantime, while Honeywell experts expect to see the delivery of 4900-5600 new helicopters over the period of five years, the industry should also prepare for the growth in demand for relevant MRO support. Today the European civil helicopter MRO market alone corresponds to approximately USD 1.5 billion with a stable several per cent annual growth.
“It is highly likely that aircraft modernisation and upgrades will be one of the main drivers behind the local MRO industry as European operators are keen to invest in the current fleet rather than acquire a new one. Moreover, it is anticipated that the light single-engine helicopters will have the largest share in the upcoming deliveries. Unlike heavy helicopters, left alone military ones, this aircraft type requires less MRO attention due to less complex equipment, avionics, etc. As a result, the volumes of the civil helicopter MRO market will be developing further but at a relatively moderate pace,” shares the CEO of Helisota. “However, the main issue is associated with quality rather than size. With the continuously growing emerging markets, it is vital for local players to choose reliable and experienced MRO providers which would ensure the compliance with the international standards at any location worldwide.”
CEO of Helisota, Anatolij Legenzov