IN FOCUS: Southeast Asia’s helicopter market spirals upwards

Singapore
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One of the themes certain to run through this month's Singapore air show is the vibrancy of Southeast Asia's helicopter market. Major suppliers such as Eurocopter, AgustaWestland, Bell and Sikorsky will all have a major presence at the event.

"The Southeast Asian helicopter market is resistant to the world economic crisis," says AgustaWestland chief executive Bruno Spagnolini. "In the region's offshore, utility and commercial helicopter market the crisis does not appear to be so huge. We're continuing to enjoy strong sales of the AW139, which is very well suited to this market."

agustawestland aw189, agustawestland

 © AgustaWestland

AgustaWesltand's AW189 has found favour with Malaysia's Weststar Aviation

At December's LIMA air show in Langkawi, the world's helicopter heavyweights signed a raft of deals and agreements with Malaysian companies. And although top executives of major fixed-wing airframers delegated LIMA to regional colleagues, the cream of the world's helicopter executives were on hand to entertain Malaysian customers in expansive chalets.

AgustaWestland and Malaysia's Weststar Aviation produced one of the show's few hard news stories. On 7 December, the companies disclosed a $150 million contract for 10 helicopters: five AW139s configured for offshore transport, one AW139 for VIP transport, two AW169s, and two AW189s. This was the first sale of the AW169 and AW189 in Malaysia. One rationale AgustaWestland gave for the multi-type deal was the common cockpit layout and maintenance concepts.

Eurocopter also signed several deals at the show, including two EC225 sales. Malaysia's MHS Aviation ordered its sixth EC225, to be delivered in 2014, while Awan Inspirasi ordered an EC225 for offshore operations.

It was at LIMA that Eurocopter revealed plans to develop a helicopter centre at Subang in conjunction with Malaysia Airports Holdings. The centre will open in 2012 and offer maintenance, repair and overhaul (MRO) facilities, a heliport and a parking hanger.

The manufacturer had opened a new MRO facility in Singapore in January 2011. Located in Seletar Aerospace Park, this is designed to support operators through the region. It can house 24 helicopters, compared with 12 at the previous facility, and incorporates Eurocopter's Singapore Helicopter Training Centre.

Eurocopter also used LIMA to disclose a letter of agreement with Malaysia's BHIC Defence Technologies to develop an EC225/EC725 regional flight simulator centre. The simulators will be located at the new helicopter centre at Subang. The deal stems from the July 2011 offset plan for the 12 EC725s the Royal Malaysian Air Force is acquiring.

Finally, Eurocopter signed an agreement with Malaysian firm CTRM, which will build the fenestron (ducted tail fan) of the EC130. Under the CTRM deal, Eurocopter will help the company develop helicopter systems integration competencies.

Southeast Asia's helicopter market extends far beyond Malaysia and Singapore. Fast-growing nations such as Indonesia and Vietnam have a huge demand for new rotorcraft, as does the Philippines. In the case of Indonesia and Vietnam, a major growth segment is offshore supply and mining support. In the Philippines there is also a strong VIP transport market.

DYNAMIC MARKETS

"The Southeast Asian market is not homogenous," says Bernhard Brenner, the Singapore-based chief executive of Eurocopter Southeast Asia. "There is not a single market. We serve 15 countries from Singapore, but all are different. Many of them are very dynamic."

At LIMA, Eurocopter chief executive Lutz Bertling highlighted the company's dominant market share in several of the region's civil and parapublic helicopter markets. Eurcopter claims a 64% market share in Thailand, 82% in Malaysia, 58% in Indonesia and 58% in the Philippines. The offshore clientele includes Vietnam's Southern Service Flight Company, Indonesia Air Transport, Indonesia's Pelita Air and Malaysia's MHS Aviation.

Brenner says Eurocopter's strongest market in Southeast Asia is probably Vietnam, "the most global and complete market - and all segments are strong, [especially] the energy and military market".

vietnamese ec225, eurocopter

© Eurocopter

Vietnam has been a particularly strong market for the EC225 Super Puma

Vietnam has been a particularly strong market for the EC225 Super Puma, a contender in Vietnam's MiL Mi-17 replacement market. Southern Service Flight Company already operates two EC225s and four EC155s, and has ordered a third EC225. Eurocopter also sees opportunities in Vietnam's VIP segment.

Russian Helicopters is also strong in Vietnam owing to the historic ties between Moscow and Hanoi. In December, Russian Helicopters opened a representative office in Hanoi to provide better access to the Southeast Asian and Australian markets.

"As one of the rapidly developing countries of the region and a long-term partner of Russia, Vietnam is an important aviation market for the company and a firm foothold for further development of business and the popularisation of Russian rotorcraft in Southeast Asia," says Russian Helicopters.

From its Hanoi office Russian Helicopters will support parts delivery, leasing and maintenance services in Vietnam and regionally. It says 300 Mil and Kamov helicopters are operated in Southeast Asia and Australia. Sixty are in Vietnam, where Russian helicopters comprise 50% of the civil market and 90% of the military market.

The other huge helicopter market in the region is Indonesia, with a resources sector comprising mines as well as offshore oil and gas fields. It is inefficient to take highly skilled personnel to offshore platforms by sea, and mining areas are often difficult to access by road.

Reflecting the importance of helicopters in Indonesia's economic growth, local airframer PT Dirgantara Indonesia produces both the Bell Helicopter 412-EP and Eurocopter's NAS332 Super Puma under licence. The Bell 412 has an especially strong position in Indonesia, with about 70 in operation throughout the archipelago. In early December, Bell announced five firm orders and two potential follow-on orders for Bell 412s in the country.

INDUSTRIAL COLLABORATION

"Bell Helicopter has had a long partnership with PTDI in Indonesia," says Larry Roberts, senior vice-president of Bell Helicopter's commercial business. "The sale of these helicopters is part of the framework of an ongoing industrial collaboration between our two companies. We believe our partnership will continue to grow and possibly expand in the future." Under the arrangement, PTDI transported the helicopters to Bandung, Indonesia, where it added local systems and mission equipment.

Mirroring Eurocopter and AgustaWestland's investments in the region, in June 2011 Bell and its sister company Cessna broke ground on a new service and support center at Seletar in Singapore. The location will house a range of operations, including sales, technical support, spare parts distribution and MRO.

Wealthy Indonesians are also waking up to the convenience a personal helicopter offers, particularly in Jakarta, a city blighted by standstill traffic. One helicopter sales executive says his company frequently gets enquiries from people with no helicopter background. He refers them to existing customers so that they can gain a sense of the complexity and issues involved in operating rotorcraft.

But the Philippines has a more established VIP market. "The Philippines is a strong, major and stable market in terms of VIP transport," says Eurocopter's Brenner. "People are used to flying helicopters, and the market is predictable." In 2011, Eurocopter sold several single-engined Ecureuil family helicopters in Indonesia. It is now seeing more interest in larger, medium-twin Dauphin types.

Southeast Asia's parapublic market is also strong, particularly for coastguard operations and police work. While individual orders tend to be small, Southeast Asia's parapublic operators buy sophisticated, flexible helicopters. As the region become richer, the need for helicopters can only continue to grow.