Just what the doctor ordered?
It is hard when speaking with industry members to not continuously bring up the effect the low oil price has had on revenues across the rotary-wing community. When we have been talking for so long about the downturn and its effects, the issue almost becomes a caricature of itself.
However, this black hole in OEMs’ account books, as highlighted by their half-year results, could yet be resolved through sales opportunities in the Asia-Pacific region.
One of the major symptoms of the flatlining offshore industry was the drop of nearly 50% in oil prices in 2014, from a healthy $100 per barrel to around $50-55 – a price that had not been felt since the 2008 global recession.
While many have noted the cyclical nature of the business, some spoken to by RH have argued that the market slump feels like a generational shift, a change not felt by those working within the sector before.
Some even remain optimistic on the future. One analyst said if there was a month or two where the oil price was a number beginning with a 5, much of the volatility and nervousness would dissipate. Indeed, for the first time in a year or so, a couple of quite specialist exploration bids have been released.
As the old idiom goes, as one door closes, albeit on a temporary basis, another one opens.
From the perspective of some of the main OEMs, the civil market has seen a slump in orders. But the gateway to Asia-Pacific could viably be the economic cure OEMs are seeking.
Within Airbus Group’s half year results, revenues for Airbus Helicopters had fallen in Q2 by 8% to €1.529 billion (see p5). However, the company has noted that Asia-Pacific is its fastest growing region in terms of civil/parapublic sales and it has many projects ongoing in the region.
Bell Helicopter’s half-year results also showed a fall in civil helicopter deliveries of 15 aircraft in comparison with 2015’s Q2 results.
In a similar vein, Bell has also been casting its net wider looking at opportunities in Asia-Pacific, from Vietnam to the Philippines. The company has promoting the number of customer service facilities it has introduced across the region as symbolic of its strength.
At the end of 2015, the Bell fleet in Asia-Pacific had grown by 4.5%. This may grow as countries like Vietnam and Myanmar open up to foreign investment, along with the relaxation of airspace rules in India.
Despite the seeming slowdown in China’s acquisition of civil helicopters, the country added 118 helicopters to its fleet, although this was down by 11% in relation to 2014.
That being said, China still has the potential to be the second-largest helicopter market in the world and earlier this year a deal for an additional 100 H135s was signed with a domestic operator.
In the latest issue of Rotorhub magazine, Shephard’s Asia-Pacific editor Gordon Arthur delves further into the region’s growth and the popularity of certain types in different countries.
OEMs will always be there to offer solutions to the energy sector, especially when the oil price inevitably picks up and stabilises, but until then industry must look at other opportunities to balance the books.