On 29 April 2016, an Airbus ­Helicopters H225 (LN-OJF) suffered a catastrophic gearbox ­failure, which caused the separation of the main rotor; all 13 passengers and crew aboard the aircraft were killed.

The helicopter was being operated by CHC Helikopter Service – the Norwegian subsidiary of CHC Helicopter – on an oil and gas crew change service off Norway’s west coast.

Inevitably, the crash prompted a near universal response from aviation authorities, which grounded the H225 and the AS332 L2, that shares a similar gearbox design.

Airbus Helicopters had by July 2017 ­persuaded all regulators that the safety barriers it had introduced for the Super Puma were sufficient to allow a return to service. Nonetheless, the majority of oil and gas producers – the primary customers of services provided by the type – have indicated they have no intention of allowing the aircraft type to fly for them in the near future: not a single H225 or AS332 L2 has resumed operations in the North Sea.

The crash came in the midst of a brutal oil and gas crisis after falls in the price of crude.

About 71% of the civilian H225 fleet, or 122 aircraft, were operating in oil and gas offshore support, much of which was in the North Sea; a market suffering an estimated 40% overcapacity at the time. To exacerbate the issues, more than 20% of the fleet was with CHC and its affiliates, which filed for US Chapter 11 bankruptcy protection on 5 May 2016.

The H225 had a 40% share of the modern heavy helicopter offshore market at the time. When it was grounded, its main competitor, the Sikorsky S-92, took over its operations relatively smoothly with the support of some smaller new-generation helicopters, chiefly the H175 and Leonardo Helicopters AW189.

Given the slow recovery in the oil and gas sector, the market remains stuck with excess capacity, even without the H225, and is expected to remain so for some time.


In fact, the helicopter operators have been aware for some time that they were unlikely to ever need most of the excess H225 inventory in oil and gas operations.

Evidence of that can be discerned from the slow return to service: by July 2017, when the type was finally cleared by Norway and the UK, 85% of the fleet remained in storage. Due to CHC’s Chapter 11 filing and lease returns, 42% of the fleet were in the hands of banks/leasing companies.

The issue was, and continues to be, largely one of customers’ – and particularly passengers’ – perception of safety; Norwegian investigators have been unable to determine the root cause of the cracking which precipitated the main gearbox failure.

Some operators in Southeast Asia, with local oil and gas producers and weak labour unions, continued to fly seven of the aircraft for crew change operations. However, almost every oil and gas major has indicated that the type will not be flown in their operations (with the exception of the French ­producer Total), permanently limiting its potential return to service.

By FlightGlobal Ascend’s estimation, 114 aircraft of the 171-strong civilian fleet as of April 2018 needed to find a new mission or else face long-term storage or retirement.

It is worth noting that the 20 search and rescue aircraft in storage are expected to be placed eventually and even new orders are being recorded. However, conversions from offshore roles can be highly ­expensive. Due to the OEM dominance of aftermarket services, and a huge reduction in the operator base, part-out was an option considered. This could be attractive, as there is an 85-strong, and growing, fleet of military H225Ms to service – but it has not yet been pursued.

This raises a question about the military inventory: is there a market for the type in paramilitary/utility roles, historically reserved for ageing or Russian-built helicopters?

In May 2018, it was revealed that Airbus had signed a contract with the Ukraine government for 55 helicopters, including 21 ­“repurposed” H225s, all ex-CHC aircraft. In 2017, The Guardian had reported that Avinco, a broker with strong ties to Airbus, was marketing some 21 ex-CHC aircraft; these units, underwritten by the French taxpayer through credit insurer COFACE, had been returned to Parilease, an aircraft financial leasing operation of BNP Paribas bank.


The French government financed the Ukrainian deal, and Airbus will benefit from carrying out their reconfiguration. By this method, damage to all parties is reduced significantly. However, this still leaves 93 aircraft to be placed. That generates two questions. Firstly –what is the addressable market for paramilitary/utility transport rotorcraft in this size category? And second – could the numbers work in other cases?

Airbus Helicopters could surely repeat the exercise, but the customer base appears too small to absorb all the stored fleet, given there are already many H225Ms in military operations and 76 on firm order.

Non-OEM parties have also been exploring this route. Waypoint leased one H225 to Global Helicopter Service for humanitarian work and Agrarflug Helilift bought two recovered repossessions for utility use. However, none have yet left their bases for work.

Since April we have also seen US utility operator Air Center lease in seven aircraft – two from ITC following purchase from Era Group, two leased from Era directly and three from Milestone. Spain’s Salvamento Maritimo ­safety agency has also recently acquired an ex-CHC example (MSN2910).

Air Center currently operates older Pumas and Super Pumas – predecessors to the H225 – and other operators use alternative types. Globally, Russian-manufactured Mil Mi-8s and Kamov Ka-32s, with comparable take-off weights to the H225, have dominated the utility/heavy-lift space. Their good payloads, lower capital cost and historically good availability of parts (before Russian sanctions) have made them ideal for utility operations with high physical demands in remote locations.

Flight Fleets Analyzer indicates there to be 32 AS332 Super Pumas, 52 Ka-32s and 192 Mi-8s between 15-30 years old outside of ­Russia with non-military operators. At an average of 14 Mi-8s and 11 Ka-32s delivered into this market every year, there is a replacement opportunity for the H225, if it is positioned correctly. With 93 examples of a new generation, Western-built heavy-lift helicopter now available in the utility market, at competitive values and lease rates, this may be the first opportunity for a Western machine to make inroads into a segment dominated by Russian manufacturers.

What the H225 experience has shown is how a major market, which was in a downturn, was able to adapt quickly to a major engineering issue. It was willing to walk away from a type with serious perception issues.

What we are also seeing is how the market is searching for ways to make alternative use of a very capable current-generation technology. It is starting to adjust to the new normal for the type, and arriving at more of a consensus of value. While it is likely to take some more time for the H225 excess fleet to be absorbed, the past few months have seen the type start to return from the void.


Helicopter manufacturers and operators typically refer to OGP, or oil and gas producer support, as the "offshore" market, and it is not hard to see why – helicopters have been used for more than 50 years to support oil exploration and production offshore, and today serve some 8,000 production platforms and around 800 exploration drilling rigs and jackships.

Drilling deeper into that data, Flight Ascend Consultancy notes in its 2018-27 commercial helicopters forecast that while this offshore support market is served by over 180 operators working in 60 countries, the four biggest operators account for one-third of the fleet. Two of those – Bristow Helicopters and CHC Helicopter – operate globally; Era and PHI dominate the US market.

At its most recent peak in 2014, the world offshore support fleet totalled 1,980 rotorcraft, having added 356 aircraft since 2008 as the market arrival of new, more efficient types coincided with a period of rising oil production and exploration.

But the collapse in oil prices led oil companies to slash costs, and helicopter fleets suffered; since that 2014 peak, the in-service fleet declined by 14%, or 280 helicopters – and, critically for sales prospects, utilisation has declined significantly.

Moreover, says Ascend, deepwater field operations have borne the brunt of this cost cutting, as these technically difficult locations need higher oil prices to operate profitably – about $65/barrel in the Gulf of Mexico. Oil price history in recent years speaks volumes about helicopter sales. From around $110/barrel in mid-2014, the Brent Crude benchmark plummeted to $30/barrel by the end of 2015 and has only this year recovered to surpass that $65/barrel mark – see the deliveries chart below.

As Ascend puts it, 2016 was a bad year for the offshore industry, with CHC entering bankruptcy and returning some 90 aircraft to lessors. As detailed in the accompanying article, that year also saw the temporary grounding, following a fatal crash, of Airbus Helicopters H225 and AS332L2 heavy types.

Ascend notes that there continues to be overcapacity in the market and expects a low level of aircraft deliveries – just 32 in 2017, following a 2012-2014 average of 120 – to persist until oil prices "significantly increase and there is more impetus to grow the fleet and replace older equipment". Annual offshore deliveries are not expected to reach 50 again until the early 2020s, and in any case the trend is "toward more economic, smaller sizes" than the H225.

More broadly, Ascend forecasts a total market of some 8,350 new civil turbine helicopter deliveries, worth $46 billion, in the next 10 years. A little more than half will be bought as replacements for the roughly one-fifth of the current world fleet of 26,000 turbine helicopters due for retirement. Ascend data shows 70% have remained in service for 30 years, "so there is a large fleet ripe for replacement".

Regionally, Asia-Pacific should in the next decade take 33% of deliveries, surpassing North America at 26%. Europe will take 23% and Latin America 10%. North America will retain the largest fleet, though, with 34% of the 2027 total.

Ascend expects Airbus to lead the market, with 37% of deliveries and 44% of value. Bell will deliver 35% by number and 22% by value; Leonardo will command 25% of new deliveries by value.

Source: Cirium Dashboard