Timing Is Still Unsure, But One Analyst Thinks The Answer Is "Soon"

Helicopters have a lot of moving parts -- as do all the different and intertwining markets driving sales in this industry. And GA analyst Brian Foley sees a bright spot in this, at least for the rotorcraft market.

Foley

"Complexity is actually good from a diversity perspective. When one market segment is performing poorly it's always good to have another one, whose cycles may be different, to take up the slack. The good news we're finally seeing is that helicopters look poised to climb up from their current slump."

Foley cites a recent case where opposite ends of the market (civil and military) helped to balance one another. The civil corporate helicopter market was compromised as the recession and credit freeze forced buyers to cancel orders. But while this was happening, the military helicopter business proved more resistant, which kept the industry working. During the same period business jets, whose military market is tiny in comparison, saw deliveries and payrolls plunge by nearly half.

Robinson R66

"There's an interesting dichotomy between helicopter civil and military markets," Foley said. "Civil deliveries represent about two-thirds of unit deliveries but less than one-third of the total dollars. So the industry would have to sell a lot of tiny R-44's to civilian customers to equal the value of just one Bell-Boeing's V-22 Osprey.  But now we're entering a period of reversal, characterized by military budget cuts on the one hand and rising corporate profits on the other. This should spur recovery in the offshore-oil and executive-transportation segments which are part of the civil industry's bread and butter."

Noting that helicopters were one of the last segments of general aviation to enter the downturn and should therefore expect to be among the last out, Foley believes that 2011 will be remembered as a "trough year" in which deliveries finally bottomed out before trending upwards.  He also anticipates that the large and fast-growing economies of India and China, for example, with their lack of airport infrastructure and their likelihood of huge construction projects, are ripe for rotorcraft.

FMI: www.brifo.com