Rotorcraft Delivery Values Rival Business Jets | Aero-News Network
Aero-News Network
RSS icon RSS feed
podcast icon MP3 podcast
Subscribe Aero-News e-mail Newsletter Subscribe

** Airborne 07.21.14--CLICK HERE! ** HD iPad-Friendly Version--Airborne 07.21.14 **
** Airborne 07.18.14--CLICK HERE! ** HD iPad-Friendly Version--Airborne 07.18.14 **
** Airborne 07.16.14--CLICK HERE! ** HD iPad-Friendly Version--Airborne 07.16.14 **

Tue, Feb 26, 2013

Rotorcraft Delivery Values Rival Business Jets

Analyst Brian Foley Says Market Is Undervalued

Business jets seem to get all the headlines. After all, they accounted for close to $18 billion of the $22 billion total value of general aviation deliveries last year. By contrast, civil rotorcraft came in a distant second contributing $3 billion. Fixed-wing turboprops and pistons made up the remaining sliver.

“This may lead some to conclude that helicopters are less significant than business jets in the overall scheme of things,” observes aviation analyst Brian Foley (pictured). “That is, until they take the defense component of the rotorcraft market into consideration. By adding the value of military helicopters, a diversification that corporate jets by and large don’t have, the yearly delivery value of rotorcraft is comparable to business jets. From this perspective, helicopters are just as economically relevant.”

Civil and military markets often run counter-cyclical to one another. This makes for a more stable sales environment for helicopters, with military frequently compensating for any civil slack and vice-versa.

Foley points out another unique advantage of the helicopter market. “With business jets there are really only two primary buyers; corporations and individuals. Civil rotorcraft share that same customer base, but with the added benefit of other buyer segments such as Emergency Medical Services (EMS), police, utility, Search and Rescue (SAR) and offshore oil-and-gas.   In the same fashion, the military market contains broad, multiple segments including scout/attack, naval warfare, squad transport, Combat Search and Rescue (CSAR), special operations and others. As a bonus to manufacturers, the same helicopter platform that’s used as a heavily armed scout for the Army can be cross-marketed to the civil side in EMS configuration.”

During the recession these rotorcraft market characteristics helped to smooth out the bumps. When civil sales activity was down as a whole, firm government contracts from the military helped to offset this. Now, just as military contracts are threatened by shrinking defense budgets, civil is making a timely comeback. The industry is even able to self-heal itself on an intra-segment level, such as when the healthy civil offshore market recently compensated for a steep drop in civil corporate sales. This is a broad diversification luxury the business jet market lacks, as evidenced by a halving of deliveries during the downturn.

All of these factors coupled together spell a bright future for rotorcraft makers. Over the next decade, Foley is forecasting some 24,000 deliveries comprised of around 12,000 civil turbines, 6000 military turbines and 6000 piston-powered helicopters valued at roughly $250 billion – equivalent to business jets. 

“For years the helicopter industry has had something of a wild west, maverick image. With numbers like these there’s no denying that they’re just as relevant as the business jet crowd, only better diversified which makes the space even more attractive,” Foley said.

FMI: www.BRiFO.com

Advertisement

More News

Airborne 07.21.14: Koontz' Barber Award, ESA Spaceplane, Model Flyers Fight FAA

Also: Boeing's 787-9 Demo, Hartzell's TBM Wonder-Prop, More Santa Monica Maneuvering, Garmin Global Pilot, Even more TSA Stupidity Greg Koontz has been named the recipient of this >[...]

Airborne 07.18.14: MH17 Shootdown Tragedy, ForeFlight Update, Honoring Apollo 11

Also: UK To OSH--By Microlight, On The Eve of Oshkosh 2014, FAA OKs SpaceX TX Launch Site, Extra-Capacity Q400 NextGen Details of the shoot down of MH17 are changing rapidly and ve>[...]

FAA Grants Re-Issues Hawker Beechcraft STC To Flyht

Covers AFIRS for 700/800/900 Models The FAA has granted a re-issued a Supplemental Type Certificate (STC) for the Hawker Beechcraft 700/800/900 model aircraft to Flyht Aerospace So>[...]

OSH2013, Day One, Revisited: ICON, Pelton, Cessna, SubSonex, BendixKing

Also: Jam-Packed Opening Day Promises That "This Isn't Over" in EAA v FAA Fight ICON Aircraft has been granted a waiver by the FAA to allow a maximum gross takeoff weight to sixtee>[...]

ANN's Daily Aero-Linx (07.22.14)

Diamond Aviators Association The Diamond Aviators Association (the DAA) is a membership organization established to educate, promote the safety of, and support the owners and pilot>[...]

blog comments powered by Disqus



Advertisement

Advertisement

Podcasts

Advertisement

© 2007 - 2014 Web Development & Design by Pauli Systems, LC