Reduced activity in the oil and gas industry is continuing to weigh on manufacturers and operators in the offshore transportation sector, with those on the front line particularly hard hit.
There had been hopes that the price of crude oil would recover as the year wore on, but recent developments, particularly the rapprochement with Iran, have dampened any cost rises. In fact, Brent crude is currently trading at a little under $50 per barrel, down from a recent high of over $58/barrel in early July.
As a result, the big oil and gas support operators have begun shedding staff, notably in the UK. Bristow Helicopters in July began consultations to make 130 staff redundant – including 66 pilots –from its Aberdeen operation.
And rival CHC Helicopters has now followed suit, this week unveiling plans to cut 50 pilots and engineers from its Aberdeen workforce.
The third of the big North Sea operators, Bond Offshore Helicopters also appears to be feeling the pinch. During a trading update on 30 July, parent company Babcock International revealed that thanks to “renewed weakness” in the sector, 2015 revenues for its oil and gas operations will see a “double digit” decline in 2015.
Flights in support of exploration work have been particularly affected, it says.
Overall, that will drag down the performance of its mission critical services division – which includes helicopter emergency services operations – resulting in growth of anywhere between 0-5% this year.
Helicopter manufacturers are also seeing that weakness translate to lower orders and deliveries, particularly at the heavier end of the market.
Airbus Group chief executive Tom Enders warned on 31 July that the state of the oil and gas market is “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.
However, Enders believes the division’s performance overall was “pretty resilient in the current environment” particularly when compared against its peers.
It is, he says “investing in recapitalising its portfolio” in order to be “well positioned for growth once we come out of this slump in the helicopter market”.
At present Airbus Helicopters has two development programmes on its books: the medium-class H160 which is now in flight testing and, further out, the heavy X6 which has just entered its concept phase.
Similarly, its European rival AgustaWestland is encountering unfavourable market conditions. Half-year results from parent company Finmeccanica show the helicopter manufacturer’s order intake fell to €2.25 billion ($2.46 billion) from €2.68 billion in the same period a year earlier, which it partly blames on the “performance of the oil and gas sector”.
In addition, revenues from the AW139 intermediate twin, a mainstay of offshore operations, have also been falling, Finmeccanica cautions.
But, similar to Airbus, it retains a bullish longer-term outlook. “We have the most innovative products,” says chief executive Mauro Moretti. “The AW189 and AW169 are very innovative, and that makes the difference compared with our competitors.”
Source: Flight International