Eurocopter wants to sell more civil helicopters in the Middle East and Africa – right now the mix is mainly military. Vice-president Xavier Hay explains the company’s strategy to Liz Moscrop
Eurocopter has been getting the better of its competitors in the Middle East for the past three decades. Around 650 of its helicopters are in service in the region, both in military and civilian operations. This is good, but not good enough for Xavier Hay, Eurocopter’s vice-president, Middle East and Africa. He says Eurocopter must up the ante in order to fend off increasing competition from rivals.
Eurocopter may be the market leader in the region, but AgustaWestland, Bell, Robinson and Sikorsky are hot on its heels. “We have a challenge on our hands to build our market share in the Arab world in order to maintain and grow our fleet,” he says.
The helicopter manufacturer has enjoyed steady growth in the Middle East for the past 40 years. Today military sales account for roughly 80% of the company's orders in the Arab world. But as governments begin to spend less on fleet renewal, and as commercial companies continue to grow, Hay would like to see the civil share rise to 60%. “We are seeing more interest from the civilian market as commercial activities develop,” he explains.
The Middle East offers strong demand for VIP helicopters, and is likely to supply customers for the company’s new product introduced at the recent NBAA show in Atlanta - L'Hélicoptère par Hermès. This is an EC 135 styled by the famous Parisian design house, finished in rich brown with classic Hermes orange accents.
It can carry five passengers plus a pilot and luggage, and has an interior styled by Hermes, featuring calf leather seats and leather-trimmed controls. It even comes with binoculars so passengers can view scenery from the air. Certification is slated for next summer, and first deliveries are expected in October 2008. Hay says: “Dubai is a very good town in which to promote the EC Hermès. We have seen a great deal of VIP interest, but have no contract yet.”
Fancy interiors are not the only popular sellers. According to Hay, regional operators are looking for new fleets consisting mainly of medium platforms, thanks to capital resources grown by oil revenues. “We have had great success in the helitaxi business and VIP operation for the EC 130 and Dauphin family AS 356 N3, and EC 155 B1 for VIPs in the Gulf. The EC 135 and EC 145 are also sound platforms for the oil and gas industry,” he says.
“We have a local partner in Dubai because it is important to be close to our customers and develop our good reputation, backed up by a local hub. This means we can improve and develop suitable new products. There is a tremendous need for helicopters here with all the construction taking place.”
Eurocopter’s local partner is Falcon Aviation Services (FAS), which earlier this year expanded its helicopter fleet by 50% with an order for an additional four aircraft: two EC130's and two AS 365 N3s, to be delivered by next year. Eurocopter believes the heavy development on and off shore in Abu Dhabi, Al-ain Palm Island, Bahrain, Kuwait and the Qatar Pearl complex is a key factor in developing rotorcraft interest in the region. “A helicopter is ideal if you want to avoid congestion and the negative aspects of urbanisation. Helicopters play a key role in providing shortcuts,” he says.
He stresses that although Eurocopter has a robust civil market share, the true potential is in its infancy. “We provide good products that are quiet and known worldwide.
Although there are only a few examples of charter services in the UAE, over the next five years we will see larger populations in the big cities like Doha, at which point the market will expand.”
The company anticipates that its civilian share will eventually outpace its military market in the Gulf, but military hardware still accounts for the lion’s share of its regional success, and Eurocopter intends to maintain strong sales. Hay says: “We already have a solid footprint in the regional military markets with our EC Puma/Gazelle 725 NH 90 and Fennec families.” His projected ratio downturn is due to governments’ increasing reluctance to fork out for expensive programmes. Even so, Eurocopter recently increased its military fleet in the region significantly through additional orders of an EC 635 by the Royal Jordanian Air Force and an NH 90 contract with the Royal Air Force of Oman.
Hay remains bullish about the future, saying most fleets are coming up for renewal, which will offer further sales opportunities. “Fleet life is roughly 25-30 years and we are moving into a market where most fleets need to be replaced. There is capacity to provide military operations with new generation platforms, such as the Fennec up to the Panther and mid class EC 225, or the NH 90 for transport. All GCC states fly helicopters and apart from the traditional military market, recent years have witnessed a new demand for homeland security missions,” he says.
“There is a police role for traffic surveillance or EMS; as well as a need for border and sea patrols and pollution control. Maritime and homeland security forces and the police are particularly keen on the EC 135 or EC 635. The police in Kuwait have opted for the Dauphin N3.”
To back up its supply into the region, Eurocopter signed an exclusive contract with FAS in May to provide maintenance services out of FAS’s Al Bateen airbase. FAS now provides full maintenance services for Eurocopter helicopters in the Gulf region and has already won a contract to perform an annual inspection on an EC 155 B1 operated by the UAE Armed Forces, its first external MRO customer.
This was a real coup, Hay says: “There is a huge market for maintenance, especially because of our proximity to government customers, who are increasingly thinking of outsourcing to local parties. We are seeing the beginning of this new situation.”
So with steady military sales, maintenance activities mushrooming and a burgeoning civil market, it looks like Eurocopter will maintain its reign in the Gulf.