Focus on helicopters in Middle East
The Middle East has a voracious appetite for helicopters. It is a hunger fuelled by the region's plentiful reserves of oil and a decade of rapid economic expansion. PAUL DERBY reports
With oil prices reaching record highs of $147 a barrel in July 2008 the financial impetus for oil exploration was at its peak. It marked the zenith of sustained high prices which for years had been driving operator demand for new aircraft.
Since then more than $100 a barrel has been wiped off the price of oil. Couple this with the global economic slowdown and a sharp drop in air travel in many parts of the world and the economic landscape today is very different to that of 12 months ago.
Yet the demand picture for helicopters in the region remains remarkably strong. Ask any of the world’s helicopter manufacturers and the Middle East still figures very high on their list of growth areas for the next decade.
While oil prices are substantially lower, they have not fallen to levels which immediately threaten exploration investment from the major oil companies. BP chief executive Tony Hayward reassured investors recently with the message that BP could, if necessary, continue its investment programme with an oil price at $25 a barrel for a considerable period.
Elsewhere, despite the economic gloom, the Middle East’s growing reputation as a tourist destination continues to feed demand for leisure flights by helicopter and its powerhouse credentials as a hub for business mean that the corporate and VIP segment remains one of the world’s strongest outside the domestic USA. Investment in emergency medical services (EMS) aircraft in countries across the region is also on the increase.
Honeywell’s 11th Turbine-Powered Civil Helicopter Purchase Outlook paints a mixed picture for the industry and for the Middle East. It suggests that new purchase expectations among operators fell by 20.5% in the Middle East/Africa region compared with an identical survey in 2008. Oil and gas exploration was ranked the highest application at 48.6% followed by corporate use at 31.4%. Approximately 75% of planned purchases are for multi-engine aircraft, reflecting the mission requirements and increase cabin size and technologies these aircraft provide.
The oil and gas production and exploration segment’s share of new aircraft fell to 5.6% in the 2009 survey after posting a 9% share in 2008 and a 14% share in the 2007 survey. This falloff is linked directly to the sharp declines in oil prices and demand.
In the medium to long term the helicopter industry’s wide array of applications is a helpful buffer against the worst of the global recession. US-based Forecast International underlines the size of the light commercial market for helicopters globally. It projects production of 8,839 turbine-powered helicopters between 2008 and 2017 valued at $37.7 billion. Expect the Middle East to be responsible for a large chunk of that spend.
Sikorsky sets sights on Middle East with S-76D
Sikorsky is targeting the Middle East as a key market for the latest version of the S-76, which completed its first flight in February. The S-76D features additional hot and high capability, Pratt & Whitney Canada 210S engines and a new Thales avionics system. Sikorsky says 25 of the 100 deposits on the aircraft are from Middle East customers.
“There’s no doubt that the Middle East is a vital market for Sikorsky,” says Steve Estill, Vice President, Strategic Partnerships. “If you go back five years we had some Black Hawks in Saudi Arabia and some in Bahrain, but not a lot else.
“We are really focused on this region now. We believe that with the S-76 and the S-92, the offshore oil market which is so important in this part of the world has great potential for us. The S-76D is very much tailored to Middle East missions.”
Sikorsky has underlined its intent to build a stronger presence in the Middle East through a partnership with Falcon Aviation Services (FAS). Sikorsky Aerospace Services and FAS will establish a
Customer Support Centre in Abu Dhabi for S-76 helicopters. The facility will be the first of its type supporting S-76 aircraft in the Middle East.
Falcon Aviation Services (FAS) has already signed delivery position agreements for four S-76D helicopters with Sikorsky. The aircraft will be used for VIP and corporate transport missions
"We are experiencing significant growth in the Middle East and the establishment of the Falcon Aviation Services Customer Support Centre furthers our commitment to customers around the world,” said Frank DiPasquale, Vice President, Business Development for Sikorsky Aerospace Services. “The service centre will not only allow us to deliver the highest level of support to Falcon Aviation Services, but will also provide support to other S-76 helicopter customers in the region."
Sikorsky is also in negotiations with Gulf Helicopters of Qatar to create a fully-capable depot to perform component replacement and overhaul work. Estill says Sikorsky plans to increase its training capability in the region, possibly through a joint venture with Gulf Helicopters that would place S-76 and S-92 simulators in the region.
He says: “It is expensive to send pilots and mechanics out of the region to train. We believe that a training and support centre would provide a cost-effective alternative, allowing training to be completed closer to the base of operations.
“We have worked very hard to establish the S-92 in a Head of State role in the Middle East and that has been a great success. The aircraft is performing that mission in Bahrain, Kuwait, Qatar and in Saudi Arabia where the royal family is now flying in the S-92.”
Bell targets offshore oil, security and EMS missions
“The Middle East has increased in importance for us significantly in the past five to eight years,” says Dane Pranke, Bell’s Regional Manager for Sales and Marketing in the Middle East and Africa. “In the next 10 years it will be one of our two largest growth areas. Really, since 9/11 with the oil price at a sustained high level there has been a major expansion in the offshore market. This has translated into sales opportunities.
“The oil price is one of three key drivers for us. The second driver is the security segment. Both on the civil and military side, law enforcement agencies in the Middle East are increasing their fleet size. Thirdly, the EMS mission is becoming increasingly important here. Just about every country we speak to is looking very seriously at EMS investment.”
Bell already has large numbers of aircraft in the Middle East, with more than 100 212s and 412s operating with Abu Dhabi Aviation, Aerogulf Services, Falcon Aviation Services, Gulf Helicopters and Saudi Aramco. In Egypt, Petroleum Air Services operates 10 212s and the same number of 412s.
Pranke says the impending entry into service of the Bell 429 will strengthen its opportunities in the Middle East for EMS sales. Bell has also secured nine commitments from Middle East customers on the BA609 civil tiltrotor: “Every day people are finding new uses for the 609. We see opportunities in corporate transport, and potentially in EMS and security missions as well.
“Clearly the oil price is a factor in the Middle East, but we are not seeing any major impact on demand from this region due to the economic slowdown, except possibly in the corporate sector.”
Eurocopter increases Middle East presence
Eurocopter has increased its foothold in the Middle East in recent years, with more than 650 military and civil helicopters now flying in the region.
An agreement with Falcon Aviation Services (FAS) to establish an authorised maintenance centre was concluded in 2007 and since then Eurocopter also sold the first VVIP Hermes version of the EC135 to FAS.
Petroleum Air Services of Egypt has agreed to buy an additional EC135 with two options, bringing its EC135 fleet to three. The aircraft will be used to support offshore oil operations. Eurocopter also has EC135s and EC635s in operation in Kuwait and Jordan.
“In recent years Eurocopter has experienced 15 % annual sales growth in the region. In the Corporate and VIP segment we have seen strong regional demand and the development of tourism represents excellent platforms for corporate transport by helicopter,” says Xavier Hay, Eurocopter's Vice-President for Middle East and Africa.
Agusta Westland focuses on Turkey
AgustaWestland’s opening of a regional business headquarters in Turkey in 2008 signified its intention to increase its presence in the Middle East market.
The Ankara base is seen as an ideal platform to build on the company’s growing share of the market in Turkey and will also manage the Tactical Reconnaissance and Attack (ATAK) programme, under which AgustaWestland will supply 50 T129 helicopters to Turkey.
The programme, which is worth 1 billion Euro, will see Turkish Aerospace Industries (TAI) take the role of prime contractor, while AgustaWestland and Aselsan will be key sub-contractors.
Elsewhere, the AW139 is enjoying success in the region. In recent times AgustaWestland has sold 10 AW139s to Gulf Helicopters in Qatar and agreed the establishment of a service centre in the country, plus two AW139s in VVIP configuration for the Dubai Air Wing. Other AW139 customers include the Qatar Emiri Air Force, Saudi Aramco and Abu Dhabi Aviation including the Abu Dhabi police force.
Profile: Falcon Aviation Services
Since its inception in March 2006 Falcon Aviation Services (FAS) has grown rapidly and its Bateen Airport base in Abu Dhabi is now home to more than 120 staff and a mixed fleet of helicopters and corporate jets.
FAS currently operates 14 helicopters plus a Gulfstream G450 and an Embraer Legacy 600. It also has a further 24 aircraft on order as part of ambitious growth plans through to 2012.
The company’s core business is split between tourism, which accounts for the single largest share of revenue, an increasing presence in the offshore oil and gas market, plus corporate/VIP transport. FAS has also developed niche products including an aerial banner offering.
“On balance tourism represents the largest part of our business,” says Sara Brandinelli, Sales Manager. “We have also begun a contract with Total, providing an offshore shuttle service. It’s a three-year contract which started in July 2008 and we operate a new Bell 412EP.”
Helicopter tourism continues to be a growth area for FAS. In July 2007 Alpha Tours selected the operator as a strategic partner and it began operations with a single Eurocopter EC130, adding a second aircraft of the same type three months later.
In November 2007 FAS began operating from Dubai Festival City and in August last year opened a new passenger lounge there. The company has flown more than 10,000 passengers to date under the helicopter tourism programme.
FAS plans to replicate this successful Dubai model in Abu Dhabi. It is working with Abu Dhabi Tourism to develop plans, which include creation of a city helipad to support tourism services. There are also plans to branch out into provision of emergency medical services.
Already established as a Eurocopter authorised service centre, FAS is expanding this part of its business and later in 2009 will perform a similar function for Sikorsky S-76 aircraft. A 5,500m2 corporate jet maintenance facility is also nearing completion.
Corporate clients have a choice of an AgustaWestland Grand or a Eurocopter Dauphin and FAS has secured approval to operate from the Burj Al Arab.
Base: Al Bateen Airport, Abu Dhabi
Fleet (rotary): 4 x Bell 412EP, 2 x Bell 206, 4 x Eurocopter EC130, 1 x Eurocopter EC135 Hermes, 2 x AgustaWestland Grand, 1 x Eurocopter Dauphin
Key sectors: Helicopter tourism, offshore oil, corporate transport, aircraft management, aerial banners, search and rescue
Approvals: Eurocopter approved service centre, Sikorsky S-76 approved service centre
Profile: Aerogulf Services
Aerogulf Services is set to become one of the first Middle East operators to introduce the BA609 tiltrotor into operation. The Dubai-based operator has placed deposits on two 609s and plans to use the aircraft for charter operations, beginning in 2011.
With a heritage dating back to 1976, Aerogulf Services has been providing support to Dubai’s offshore oil and gas industry for more than 30 years. Based at Dubai International Airport, the company has been expanding its services into the leisure industry in recent years, creating a ‘Fly Dubai’ experience, allowing visitors to experience all the emirate has to offer from the sky.
Captain David Buttler, formerly Aerogulf Chief Pilot and now Operations Director, says offshore work still accounts for the bulk of the company’s business: “I would say that 90% of our work is in offshore oil support. We have four Bell 212s under contract to Dubai Petroleum every day.
“Our workforce is about 75 people and of those 23 are pilots. We have lots of nationalities, including Germans, Kiwis, Swedes, South Africans and Venezuelans. I’ve been here for 11 years.
“The economic situation means that the tourism side is a little slower, but on the offshore side we haven’t seen a marked impact. Whatever the barrel price of oil, companies still need to get workers out there to extract it.” Aerogulf is the only operator in the region to provide a scheduled night service to offshore locations 365 days a year.
Aerogulf operates one Bell Longranger and one Bell Jetranger, mostly handling tourism work. With Bollywood directors choosing Dubai as a location for filming in increasing numbers, Aerogulf has increased its media-related work, as well as other sectors including heavy lifting, seismic surveys and adventure tours.
The company also provides maintenance services on Bell and Agusta/Bell model aircraft including the 206, 407, 212 and 412.
Aerogulf Services factfile:
Base: Dubai International Airport
Fleet: 6 x Bell 212s, 1 x Bell Jetranger, 1 x Bell Longranger
Key sectors: Offshore oil support, tourism charters, heavy lifting, seismic surveys, aerial filming, adventure tours
Profile: Abu Dhabi Aviation
The largest commercial helicopter operator in the Middle East employs some 750 people, including more than 120 pilots and more than 220 maintenance engineers.
Since its formation in 1976 Abu Dhabi Aviation (ADA) has expanded quickly, growing its fleet to 34 by 1983 and gaining authorisation to operate fixed wing aircraft in 1985. It now operates three Bombardier Dash 8s alongside a rapidly increasing rotary wing fleet.
The company’s key market is to support Abu Dhabi’s offshore oil, construction and engineering companies. It has contracts throughout the Middle East, including in Saudi Arabia, Qatar, Kuwait, and Oman, as well as a firefighting contract in Spain.
In an average month ADA carries 15,000 passengers and 162,000kg of freight to offshore locations and 11,000 passengers between offshore locations.
ADA provides search and rescue (SAR) support for the UAE armed forces, operating from four strategic bases within the UAE and using a fleet of seven AgustaWestland AW139s.
ADA also has a heavy maintenance capability for AgustaWestland, Bell and Eurocopter aircraft, alongside a component overhauls facility and other services including engine support, structural repairs and refurbishment.
Abu Dhabi Aviation factfile
Base: Abu Dhabi International Airport
Fleet (rotary): 8 x AgustaWestland AW139s, 15 x Bell 412s, 19 x Bell 212s, 4 x Bell 206s. 13 x AW139s on order
Key sectors: Offshore oil support, medical evacuation, survey, photography, charter, crop spraying