It is a curious time for helicopter manufacturers. While product development and improvement continues at the majority – a rough reckoning suggests that there are at least five Western clean-sheet programmes under way at the big three airframers – the industry is undeniably suffering a downturn.

Initially this was largely confined to the lighter end of the market in the parapublic and utility sectors, with sales of heavier helicopters remaining strong, particularly for the oil and gas market. However, with crude prices sharply down – and now forecast to stay that way for longer than initially anticipated – companies across the sector have been reining in their spending. To provide an illustration of the pain this has caused to those on the front line, it is worth noting comments contained in the most recent quarterly filing from global offshore operator CHC Helicopter.

It highlights the “significant and rapid decline” in Brent crude prices since mid-2014 which have led to a “rapid downturn in market conditions” and “now appear more prolonged in nature than initially expected”, CHC says. Customers have been managing costs, which has “translated into increased pricing pressure on us” and in the long term, the volatility “could negatively impact the future demand for offshore helicopter transportation services”, it notes.

“Though the majority of our revenue is derived from contracts tied to our oil and gas customers’ offshore production operations, which provides the company with a more stable revenue stream since the production business is typically less cyclical in nature than the exploration and development business, this trend, if sustained, could have a significant adverse effect on our business and financial conditions that we may not be able to fully recover from.”

At the same time, CHC announced $169 million of order cancellations, without naming a type or number, and said it would also return 11 leased aircraft.

Of course, the company was not in particularly rude health prior to the oil price plunge, but those quotes, while perhaps slightly more extreme, do not differ markedly from those uttered by CHC’s peers.

It is against this tough backdrop that the industry finds itself. Precisely what impact it is having is hard to quantify given the lack of transparency in airframer orderbooks. However, both Airbus Helicopters and AgustaWestland – and to a lesser extent Bell Helicopter – are forecasting lower full-year deliveries in 2015 than they recorded in 2014, figures already reduced against the previous 12 months. Sikorsky, distracted as it has been, has not offered a forecast.

Airbus Group chief executive Tom Enders warned on 31 July that the state of the oil and gas market was “not helping” the medium and heavy segments at its Airbus Helicopters division.

Although the manufacturer does not break down deliveries of individual models, overall customer handovers fell to 152 for the six months to 30 June, down from 200 a year earlier.

Similarly, its European rival AgustaWestland reported a moderately worse financial performance in its first half, partly blamed on the “performance of the oil and gas sector”.

Chris Wills, valuations manager at Flightglobal’s Ascend consultancy, notes it has recorded 10 heavy helicopter cancellations this year, with the offshore fleet growing by just six aircraft in 2015.

The two heavy helicopters in the segment, the H225 and Sikorsky S-92, have been most affected, seeing a number of order deferrals and cancellations. Rotorcraft manufacturers are better able to flex production than their fixed-wing counterparts and, anecdotally, both have trimmed output this year. Airbus Helicopters has the additional benefit of being able to switch some output to the defence market thanks to the success of the H225M military variant, a luxury that Sikorsky does not enjoy with the S-92. Despite, or perhaps even because of the weakness in offshore transportation, Airbus Helicopters is pushing ahead with the initial development phase of its eventual H225 replacement, the X6.


Airbus Helicopters

Launched at the Paris air show in June, the airframer has entered an early two-year definition phase for the new rotorcraft, with its intention to achieve service entry around 2022-23. Little has so far been revealed about the X6, save for the manufacturer's commitment to deliver a step-change in performance, efficiency and safety. Images released at the launch suggest a rotorcraft with a highly aerodynamic shape and featuring five-blade main and tail rotors. It will be equipped with new engines in the 3,000shp (2,240kW) class, although no decision on a supplier has yet been made. The one detail that has been confirmed, however, is the inclusion of fly-by-wire controls on the grounds of improved safety and capability.

The France-headquartered firm is banking on the oil and gas market being on the upward part of its cycle as the new model arrives, fuelling a need for fleet replacement.

In the meantime, Airbus Helicopters is working on an enhancement to the current H225. Intended to make its service entry in 2016, it will feature uprated Turbomeca Makila 2B engines, taking maximum take-off weight (MTOW) to 11t and improving range with 19 passengers on board to 190nm (352km) from 140nm. Sikorsky too, has developed a higher-gross-weight version of the S-92, increasing MTOW by 544kg (1,200lb) to 12.5t. Available as line- and retrofit options, the first example was handed over to operator Era Group in August. Sikorsky expects certification of the retrofit kit to be obtained by year-end. Uprated GE Aviation CT7-8A6 engines for better hot and high performance will be available from 2017.

Of course, Sikorsky has been distracted of late while its future was sorted out, but a pressing matter for its new owner, Lockheed Martin, will be to decide on a future roadmap for the S-92. The move by Airbus Helicopters to launch the X6 only serves to illustrate the need for a further enhancement of Sikorsky's flagship civil model.

As a research paper from Ascend notes, although Sikorsky will continue to take orders for the S-92 with or without an update, increased competition will erode its sales figures.

“It is this share which Lockheed Martin needs to decide if it wants to fight for. If it was simply to continue production of the S-92 it would still take a sizable part of our forecast, but we would expect to see a reduction of market share if no new derivative or whole new type was produced.”

One further effect of the difficult oil and gas market has been that manufacturers and operators have been extolling the virtues of the new super-medium-class helicopters as a means of right-sizing aircraft to take into account lower load factors. Or to put it another way, what might have been profitable in a half-full 19-passenger helicopter with crude at $100 a barrel is markedly less so with oil down by 50%. Both Airbus Helicopters and AgustaWestland argue that their respective H175 and AW189 super-mediums, each able to accommodate 16 passengers, are more efficient for a large percentage of missions than heavier rotorcraft while simultaneously being more competitive than those in the weight class below. Longer-range variants of both types are also in the works, with AgustaWestland confirming customer interest in the model.

New designs, engines, and avionics aid safety and lower operating costs too, they argue. Neither has set the world alight in sales terms, however. That said, AgustaWestland's deal with Russian oil giant Rosneft for as many as 160 locally assembled AW189s, plus an undisclosed investment in the manufacturer's Moscow-based HeliVert joint venture, appears potentially valuable in the longer term. But with only 10 firm orders from the deal so far, its rivals have been quick to question whether the full complement will ever be built.

Russia has posed its own set of problems for Airbus Helicopters, with the status of UTair's acquisition of 15 H175s still very much in doubt. Nonetheless, the programme is in positive territory this year, having seen Bristow Group, in March, more than triple its commitment for the type to 17 and lessor Milestone Aviation, at June’s Paris air show, increase its total orders and options for the type to 28. Milestone had a busy Le Bourget, in fact, also signing a letter of intent for 20 examples of the third super-medium on the market, the Bell Helicopter 525 Relentless.

Still at the development stage, the 525 performed its first flight on 1 July, and has since amassed 20 flight hours as well as 40h of ground runs. Trials have included the incremental introduction of its full fly-by-wire control system at 120kt (222km/h) and 1,200ft. Two further prototypes are in final assembly and should roll out by the end of this year.

Bell is banking on the oil and gas market regaining lift just as the 525 enters service in the first half of 2017. Bell also believes that the Relentless, which will tip the scales at almost 9.1t, can be even more successful than its super-medium rivals in chipping away at the market for helicopters in the weight class above.

“We were concerned that the 525 could be too late to market, but the current market environment has helped reduce any gap the H175 and AW189 had,” says Ascend’s Wills.

“We also see the market looking to right-size operations and this could benefit all the super-mediums, especially as they have competitive operating costs,” he adds.

In fact, Ascend estimates that around one-third of 525 deliveries will be destined to take on missions previously operated with heavier helicopters.

It is also a philosophy that both Airbus Helicopters and AgustaWestland have bought into, albeit further down the weight range. The recently certificated AW169, which boasts a MTOW of 4.6t, has long been billed as the “Dauphin killer” in reference to its likely effect on the rival AS365/H155 Dauphin models, which weigh in at 4.5/4.9t.

To some extent the slow death of the Dauphin family was already under way, with the heavier and significantly more powerful AW139 largely to blame. Now Airbus Helicopters has responded with its own “AW139 killer”, the H160. Officially unveiled in March at the HeliExpo show in Orlando, Florida, the airframer aims to take on the bigger helicopter by offering a platform which matches its performance but weighs around 1t less. Certification and service entry are scheduled for 2018 with the first flight successfully completed on the eve of the Paris show, in mid-June.

The H160 marks a significant change from initial designs floated during its X4 design concept phase, which envisaged fly-by-wire controls, two iterations of cockpit displays and a unique fuselage shape. However, Airbus Helicopters elected to pursue simplicity and system maturity rather than complexity for the development, based on a fear of programme overruns and through feedback from its customer advisory panel. The other significant change over earlier designs is the reduction in engine choice, with the manufacturer ditching the 1,100shp Pratt & Whitney Canada PW210 turboshafts to leave Turbomeca’s developmental 1,200shp Arrano as the sole engine choice. Due to the late decision to drop the P&WC powerplant, flight tests commenced using the PW210, however Turbomeca aims to deliver its first production Arrano to the airframer before year end, with first flight in early 2016.

AgustaWestland’s response to the H160 was immediate though, announcing an optional 600kg weight increase for the AW139 to 7t MTOW, 200kg more than the current 6.8t maximum, plus a 100kg weight saving on the baseline aircraft. Although deliveries of the variant have begun, it remains to be seen, however, whether the AW139 can maintain its popularity in the face of the H160’s potentially significant performance gains.

Also in AgustaWestland’s product pipeline is an aircraft which presently has no clear competitor – the AW609 civil tiltrotor. The manufacturer is continuing its development efforts on the 8.2t type, with a third flight-test aircraft due to join the fleet in late 2015, initially to focus in icing trials. This will be followed by a fourth test article – currently in build at the airframer’s Philadelphia, Pennsylvania facility – which will feature the first production cockpit. US Federal Aviation Administration certification is scheduled for 2017 under a new Powered Lift category which draws on elements of both fixed- and rotary-wing requirements. With 1,300h of flight time amassed so far, including trials of auto-rotation and glide landings, AgustaWestland is confident it can meet its deadline for 2018 service entry.

The question for the Anglo-Italian airframer is what comes next, however. Ascend’s Wills believes the immediate imperative is to ensure the AW169 and AW189 are brought to market effectively “particularly the latter, when compared with the relatively seamless service entry of the H175”.

Further out, development of a helicopter in the weight range between the 8.3t AW189 and 15.6t AW101 is possible “but it would certainly depend on Sikorsky’s move as well as the market in general”, says Wills, although he believes AgustaWestland would have little appetite for such a move.

Meanwhile, Bell continues to advance on certification and service entry for its light single 505 Jet Ranger X, with the former milestone due to be achieved by the end of 2015. Its full complement of three test vehicles is now flying, with the third having joined the fleet on 16 July. In a programme update posted to its website on 1 September, Bell says the three helicopters have now accumulated a total of 330 flight hours.

The initial prototype (C-FTV1), which Bell describes as the “workhorse” for the certification effort, had logged 250h since its November 2014 first flight, having recently completed hot and high testing. Its final evaluation will be a 100h endurance ground run later this year. FTV2 (C-FTVN), meanwhile, has amassed 60h, and will later be used for final validation of the helicopter’s cold weather performance. Lastly, FTV3 (C-FTVO) – which is configured with optional kits including TCAS and air conditioning – has flown for just 20h and is currently undergoing certification noise and handling qualities testing. Function and reliability testing will follow later this year.

Bell has passed another milestone on the programme with the late August opening of its new assembly line for the helicopter, in Lafayette, Louisiana. It has additionally received the first production Turbomeca Arrius 2R engine, with certification of the powerplant scheduled for year-end.