With a new generation of light single-engine helicopters on the horizon, continued strong demand for twins and aggressive fleet replacement plans worldwide, the rarefied rotorcraft market is “approaching capacity,” according to the annual new helicopter delivery forecasts being released here today by Honeywell (Booth No. 2137) and Rolls-Royce (Booth No. 1917). Both forecasts predict more growth across virtually all turbine helicopter market sectors through 2016, with demand intensifying over the next five years.
The Honeywell five-year forecast, which covers only civil turbine helicopters, predicts deliveries of 4,450 units through 2012, while Rolls-Royce’s 10-year outlook projects deliveries of 15,711 civil and military helicopters worth $154 billion through 2017. Rolls-Royce breaks out the civil component of this total, predicting deliveries of 9,095 helicopters with a combined engine/airframe value of $35.7 billion.
Ken Roberts, acting president for Rolls-Royce’s helicopter engines business, said, “The projections of deliveries for the next 10 years show an industry operating at levels approaching capacity.”
The Honeywell forecast predicts civil turbine unit deliveries in excess of 800 this year. It also notes that civil helicopter deliveries were up 25 to 30 percent from 2006 to 2007 and predicts this sector will increase by 50 percent for the five-year period from 2008 to 2012 compared with sales from 2003 to 2007. Within the North American civil sector, Honeywell broke out current sector demand as 20-percent law enforcement, 20-percent corporate, 23-percent utility and 26-percent EMS. Honeywell said North America will represent 40 percent of the worldwide demand for new helicopters and 80 percent of all purchases comprising replacement of existing equipment with like-class models.
Both forecasts are continuing to predict significant growth in the single-engine market triggered by the expected introduction of new, lower-priced entrants such as the Robinson R66. “The gains seen in the 2008 outlook are also supported by potential new OEM entrants offering affordable, high-value platforms stimulating demand and drawing new operators into the turbine segment,” said Mike Cuff, Honeywell vice president, helicopters and surface systems. Honeywell predicts that 58 percent of all new purchases will be singles in North America and 47 percent worldwide. Globally, demand for new light singles is down 10 to 11 percent compared with the last three years, while demand for twins is up 12 percent.
Rolls-Royce values the overall 10-year demand for civil light-medium twins at $20.5 billion, or 65 percent of the market.
The growing light- and medium-twin markets also represent the majority of the civil market valuation, according to Honeywell. “The only segment with significant trade-up aspirations is the light-twin class, with 53 percent planned trade-even purchases and 47 percent trade-up plans into the medium-twin class.”
Honeywell noted that most twin demand is continuing to come from Europe, driven in part by regulatory considerations. “Consistently, since 2003, over half of all European purchase expectations have been for twin-engine models,” Cuff said. “This year’s findings show 54 percent of purchase plans falling in the multi-engine helicopter class.”
Corporate Sector Leads
Outside Europe, demand for twins is also up in Latin America (50 percent of the market) as well as Africa, Asia, the Middle East and Oceania, according to Honeywell. This region also shows the most aggressive fleet-replacement plans. While fleet replacement is driving 25 to 27 percent of the demand in North America and Europe, it is put at 32 to 37 percent in these other markets.
As a percentage of total global demand measured by “purchase expectation,” Honeywell reported that light twins rose to 22 percent from 16 percent last year; intermediate twins at 29 percent (50 percent in Asia, Africa and the Middle East); and heavy-lift twins at 8 percent.
Measured by sector utilization, corporate use continues to lead all civil sectors worldwide, accounting for 38 percent of new turbine helicopter sales, according to Honeywell. However, that number varies wildly by region. “More than 70 percent of all demand in Latin America is for corporate-use machines, followed by Europe at more than 40 percent, Asia at nearly 37 percent, Africa/Middle East at 26 percent, followed by North America at an increased rate of 20 percent,” the forecast reports.
Utility, law enforcement and EMS demand showed little overall change, according to the Honeywell survey, although there were swings in regional demand. For example, the EMS market fell slightly in the U.S. and Canada but surged in Asia. Honeywell noted that demand also fell in the oil and gas sector by five points to 9 percent but said it believes this number is somewhat understated, especially in the face of rising energy prices.
Rising oil prices undoubtedly contributed to utilization rates that were down 11 percent in North America, but Honeywell cites increases in other markets: Latin America (+28 percent), Africa/Middle East (+6 percent,) and Europe (+9 percent).
Virtually all operators surveyed said they expect their utilization rates to remain unchanged in the coming year.
As significant as civil-sector developments are, they continued to be overshadowed by a global military market that Rolls-Royce estimates at $119 billion over the next decade. This comprises deliveries of 6,616 new rotorcraft, with medium (57 percent) and heavy (14 percent) helicopters leading the market. New and ongoing programs driving production include the Sikorsky UH-60M and CH-53K, Bell/Boeing V-22, Eurocopter UH-72A Lakota and the Lockheed Martin/AgustaWestland US101. The increased demand for military lift is being driven by broader missions with higher utilization rates in harsher conditions, increasing use of military helicopters for humanitarian relief and the overall need for fleet replacement and replenishment.
Rolls-Royce said the operational tempo for rotorcraft involved in the global war on terror is four times the peacetime rate, often in harsh operating environments that include sand and salt and high-and-hot conditions. Rolls-Royce also noted increased demand for new technology in military helicopters, including lower infrared signatures, digital cockpits and intelligent diagnostics.
