Jetrader - Autumn 2015 - 39

In short, there is no shortage of
liquidity from banks and at very attractive rates; however, airlines still turn to
capital markets, such as EETCs or ECAs for
large-scale financing.

Helicopter Market
The announced sale of Sikorsky to
Lockheed for $8 billion will probably be
the biggest headline regarding helicopters
this year. Lockheed and Sikorsky already
work together on several helicopter programs, and it is likely that Lockheed will
allow Sikorsky to continue operating as a
standalone business and ensure that the
brand is preserved. On the other side of
the pond, both Airbus Helicopters and
AgustaWestland (AW) have been busy
introducing new products. The all-new
super medium H175 from Airbus Helicopters
designed for the offshore oil/gas industry
entered service late last year. AW entered
this segment as well, with the slightly
larger AW189 for offshore and search
and rescue (SAR) operations. Both have
received positive feedback from operators.
AW is also developing AW169, a twinengined medium-size helicopter, which was
recently certified by EASA with deliveries
commencing this year. AW is also placing
its bets on the AW609, a second-generation tilt rotor aircraft for charter, offshore
and SAR market. The design, along with
its safety features, looks promising, but
we have yet to see major endorsements
from the market apart from Bristow who
is helping to develop the platform. Earlier
this year, Airbus Helicopters revealed its
new helicopter, the H160 twin-engined
medium helicopter, to compete with the
popular AW139 which essentially replaces
the AS365 Dauphin and EC155 platforms.
Lessors have been active in closing sale
and leaseback deals and have been successful in increasing their portfolio year-onyear. Milestone, seen as the largest lessor
under GE's ownership, has expanded to
more than 200 helicopters. Others such
as Waypoint, Lobo, LCI and Amur have
been active in adding helicopters to their
fleets. There is, however, a concern that oil
prices have put some pressure on helicopter
appraisals, which is likely to affect current
lease arrangements. CHC, one of the largest
operators serving oil and gas platforms,
is going through troubled times, adding
to the worries of lessors who have leased

into CHC. We believe this has a potential of
affecting the market and lease rates; however, it will be short-lived, and the market
is likely to bounce back due to demand
from other sectors, such as emergency
medical services, surveillance, and search
and rescue.

Final Word
The overall European air transport market has improved greatly over the last two
years. The forecasts issued by IATA and
OEMs look promising. IBA endorses them

with the caution that airlines must continue to find cost efficiencies despite fuel
not being the biggest concern-at least for
now. There are areas such as maintenance,
optimizing operations, organizational
improvements and review of contracts,
which can bring in additional cost savings. It is clear that lower fuel costs are
providing relief and helping the airlines to
recover; however, airlines should see this
as a short-term measure and must prepare
for the time when fuel returns to between
$90 and $100 per barrel.

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