The economic downturn that has been affecting the global helicopter industry has been very hard on original equipment manufacturers (OEMs); the companies who design and build the world’s rotorcraft. But these OEMs have been through tough times before, and survived. Here’s what they are doing to cope, as they wait for the next inevitable market upswing.
Airbus Helicopters Emphasizes Customer Service
The economic downturn has motivated Airbus Helicopters to take a hard look at its business model. The company’s goal is to find that winning approach that will put Airbus first in customers’ minds at buying time, so that it can retain its market share, and even increase share despite hard times.
After much reflection and analysis, Airbus Helicopters decided that offering exemplary customer service and support is the way to their customers’ hearts and wallets. Kara Evanko, Airbus Helicopters’ head of communications said, “We’ve made a number of investments in customer support. The downturn gave us the opportunity to rethink how we support our customers and their aircraft.”
A case in point: Airbus Helicopters Inc. (the company’s North American division) is currently stocking more than $117 million in spare parts for its customers, to ensure that they can get the components they need when they need them. The result: Airbus’ on-time request (OTR) metric, which indicates how successful the company is in fulfilling its customers’ parts requests, is now at a record 96.6 percent fulfilment rate; up from 95 percent in 2016.
Airbus Helicopters has also enhanced its dynamic component repair capability, and bolstered its customer support center, including assigning staff to serve specific customers on an ongoing basis. “We’re committed to keeping our customers in the air,” said Evanko.
In addition to these investments in the U.S., Airbus Helicopters has launched the HCare service program. HCare’s goal is to make maintenance costs more predictable and controllable for clients while maximizing their aircraft’s availability. “Spanning material management, helicopter maintenance, technical support, training, flights ops and connected services, HCare ensures that each flight is a success and performed with the highest levels of safety,” Evanko said.
According to Airbus Helicopters, its customer focused strategy is succeeding in gaining market share for the company, even in the current economic climate. Looking ahead to 2018, “We are focusing on a number of forward looking projects, including the H160 and CityAirbus,” said Evanko.
Unveiled in 2015, the practical, 12-passenger medium twin H160 “creates value for customers in terms of performance, economic competitiveness, safety, and comfort,” she said. In contrast, the City Airbus concept is ‘blue-sky’ engineering. It is a multi-passenger, self-piloted, electric demonstrator that is, and capable of vertical takeoff and landing. “It is designed with cost efficiency, high volume production, and environmental footprint in mind,” said Evanko.
Bell Helicopter Stays the Course
As fate would have it, Bell Helicopter launched its Bell 505 Jet Ranger X (light single) and Bell 525 Relentless (super medium twin) helicopter development programs before the current economic downturn occurred in 2015. Once this happened, Bell had the choice of scaling back on its multi-million dollar investments or staying the course on these programs in hopes of them eventually achieving substantial sales.
Bell decided to stay the course. “We had already made some pretty big investments into the 505 and the 525 when sales dropped across the industry,” said Chuck Evans, Bell Helicopter’s director of marketing for Commercial Business and Support Services. “Despite the downturn, we decided to keep investing in those products and moving those products along. Then and now, it seemed the right thing to do.”
While it waits for the helicopter market to improve, Bell is making serious progress with its new flagship products. This is certainly true with the single-engine Bell 505 Jet Ranger X. Some specs: The 505 has a highly configurable cabin with room for five occupants, 125-plus knots maximum cruising speed, and a state-of-the-art Garmin 1000 HTM flight deck. It is aimed at the corporate and parapublic markets. This advanced single-engine rotorcraft achieved FAA certification in December 2016, with the first 505 being delivered to private operator Scott Urschel at Heli-Expo 2017. To date, Bell Helicopter has received about 400 letters of intent from clients interested in buying 505s.
Bell Helicopter is also continuing its heavy investment into the 525. This super medium twin is meant for the corporate VIP, HEMS, and parapublic markets. The 525 has space for up to 20 people, a 162 knots maximum cruise speed, and a range of 570 nautical miles.
“We continue to make progress towards getting that aircraft certified, and are basically deep into the flight testing/certification process,” said Evans. “The 525's capacity, advanced safety features, and fly-by-wire system have generated so much customer interest that it may exceed the 505's sales performance over time.”
During the same slow economic period, Bell Helicopter opened a new Bell Training Academy in Fort Worth, Texas. On the military side, the company has continued its V-247 Vigilant unmanned tiltrotor and V-280 Valor manned tiltrotor programs.
Versatility: The Key to Leonardo Helicopters’ Strategy
When it comes to facing down the economic downturn, Leonardo Helicopters (Leonardo) has chosen versatility as its strategic focus. In this case, the company is applying it in two key ways.
Leonardo’s first application of versatility refers to the mission-flexibility of its helicopter family, which can perform many types of missions. This versatility allows sales of Leonardo’s civilian rotorcraft to extend beyond the oil and gas industry to include the EMS, utility, and VIP markets.
Regarding versatility, Leonardo stated to Rotorcraft Pro, “Leonardo Helicopters has had initial success in the offshore wind energy sector, with customers selecting our aircraft, namely the AW169, to support customer requirements for offshore wind farms. Recently announced was a contract for the first AW169s to be delivered to a customer in Denmark, in support of an offshore wind farm contract in the U.K. These helicopters will feature a specially customized configuration, including a dedicated offshore interior and rescue hoist to support maintenance personnel working on the wind turbines.”
Leonardo Helicopters’ second strategic application of versatility refers to the company’s aggressive search for new clients. “Leonardo has worked to grow our market share, bringing aircraft to geographies previously underserved by helicopters, and expanding to entirely new market segments,” said Leonardo Helicopters.
China is one previously untapped region where Leonardo is gaining a substantial foothold. Not only is the company selling civilian helicopters there, but it “has contributed to the growth of the first national helicopter EMS program in China; having delivered 25 AW119Kx helicopters from its Philadelphia facility over the past year,” stated Leonardo Helicopters. “Additional deliveries of AW139s and AW169s, from a follow-on contract, are beginning as well.”
Looking ahead to 2018, Leonardo continues development work on the AW609, which when civil-certified, will become the first multi-role tiltrotor to enter into service. Meanwhile, “Through the Clean Sky 2 program, Leonardo Helicopters is also the leader on development of the Next Generation Civil Tiltrotor, a 20-seat civil tiltrotor that will expand on the capabilities of the AW609 and integrate innovative and environmentally friendly technologies,” stated the company. First flight of the demonstrator aircraft is expected in 2023.
Marenco Swisshelicopter Ignores Downturn
Downturn? What downturn? For Marenco Swisshelicopter, their attention is not on the current economy at all, but rather bringing the company’s SKYe SH09 multi-purpose, light single-engine composite helicopter to market.
Under development since 2009, the carbon composite SKYe SH09 can carry five to eight people, has rear clamshell doors, and a flexibly configurable large cabin. At present Marenco has two working prototypes (P2 and P3; P1 having been retired) in test flight mode, and a third helicopter (PS4) being built for EASA Type Certification tests in 2018. The company’s goal is to start production by mid-2018, and begin delivering finished SH09s in 2019.
“When it comes to our helicopter, we see the market for sales becoming more robust,” said Marenco Swisshelicopter CEO Andreas Löwenstein. “This is because the SH09's clean sheet design gives customers a roomy twin-engine-type cabin on a single helicopter platform, with lots of outside visibility and interior space.” He added that the SH-09 features fully redundant hydraulic and electrical systems; making it more akin to a twin-engine helicopter in high safety standards than a single engine.
At present, Marenco has “close to 30 SH-09s” on firm orders or pre-contracts to 10 customers, with memorandums of understandings (“I call them pre-arrangements,” said Löwenstein) for an additional 118 more helicopters. “I would say this gives us a quite a good starting point for beginning production in 2018,” Löwenstein said.
As for potential customers for the SH-09? “We are targeting EMS, law enforcement, and tourism, among other sectors,” Löwenstein replied. “The SH-09's spacious layout and easily reconfigurable cabin, plus its safety featured and low operating costs, make it a economical alternative even to traditional twins.”
MD Helicopters Stands Its Ground
MD Helicopters’ response to the downturn has been one of defiance. The company firmly believes in what it’s doing, and has refused to let the economy change its plans.
“We have remained loyal to our core strategy of delivering excellence across all phases of the helicopter lifecycle, and incorporating elegant design and technological advancements into our iconic airframes,” said Amy Romano, director of marketing & communications at MD Helicopters, Inc. (MDHI). “During this period, we have redoubled our efforts relative to fleet modernization, implementing manufacturing, component and technology upgrades across all models, and focused on initiatives to enhance the owner/operator experience.”
The best part is that MDHI’s strategy is working. Despite an overall market downtown, MDHI’s business has actually increased over the past 18 months and they are forecasting further growth in 2018. MDHI has achieved these results not only because the company enjoys high levels of loyalty in its legacy markets which consist of law enforcement and military operators, but also by undertaking several aggressive programs designed to modernize and upgrade the capabilities of its current stable of light twin- and single-engine helicopters. Glass cockpits for all models and an increased MGTOW (maximum gross takeoff weight) for the MD 530F are just two of these efforts.
As well, MDHI has received FAA approval to install all-glass cockpits in the MD 530F and MD 600N, with FAA approval for the MD 500E and MD 520N aircraft expected by the second quarter of 2018. The first MD 600N with this cockpit has already delivered, and the first MD 530F will deliver soon.
On the military side of business, the U.S. government awarded MDHI a 5-year, firm-fixed price contract in 2017 to provide an estimated quantity of 150 armed MD 530 aircraft to U.S. Army and partner nation aviation forces. “This contract is recognition of our ability to rapidly respond to the needs of our military customers,” said Lynn Tilton, CEO for MDHI, “and a testament to the effective, efficient role the MD 530 armed scout attack helicopters play in the global fight against terror. It is MDHI’s great honor to continue to serve and support the warfighter." The $1.4 billion deal also includes program management, delivery support, pilot training, and maintenance. The first delivery will go to the Afghan Air Force, which will receive 30 new MD 530F Cayuse Warrior helicopters.
Looking ahead to 2018, MDHI is “continuing development via ongoing in-depth market surveys and concept validation on the MD 6XX Concept Helicopter that debuted at HAI Heli-Expo 2017,” said Romano. “Additionally, to support current and future military contracts, and to lean forward into anticipated commercial market requirements, we have initiated development of a crashworthy main fuel system for our 369FF certified airframes.”
Robinson Tackles AOG As Sales Soar
The economic downturn that is depressing the rotorcraft industry is apparently leaving Robinson Helicopter Company alone. In fact, when Rotorcraft Pro spoke to Kurt Robinson, the president and CEO of this second generation, family firm, Robinson Helicopter Company was on its way to a banner year. “Based on our sales numbers to date, we will sell 25 percent more helicopters in 2017 than we did in 2016, when we sold and built 234,” he said.
Strong sales notwithstanding, Robinson Helicopter Company is not taking its good fortune for granted. “Over the last three to four years, we’ve been very cognizant of the trends affecting the helicopter sales market, and how these trends may affect a customer’s choice of vendors,” said Robinson. “This is why we have done our best to improve our operations, with a particular focus to enhancing customer service and addressing AOG (aircraft on ground) situations quicker than ever before. After all, when our customers’ helicopters are not flying, they are not generating revenue for them.”
Judging by the numbers, Robinson Helicopter Company is doing something right. Beyond assembling its 12,000th helicopter on December 23, 2016, the manufacturer was ranked Number One for product support in Professional Pilot’s 2017 Product Support Survey. This is the 14th year running that Robinson has won First Place for piston helicopter support.
Another likely factor in Robinson Helicopter Company’s sales growth is the firm’s insistence on keeping prices down. Every helicopter it makes -- from the entry-level R22 Beta II to the five-seat R66 Turbine – is “in the under a million dollars price category,” Robinson said. As for the company’s sales projections for 2018? “I’m a pragmatic person, so I am inclined to think that 2018's sales will be similar to 2017's,” Robinson said. “At the very least, we expect sales to continue a slow, steady climb in this time period.”
Sikorsky Maximizes Flight Hours
Customers buy helicopters to fly them; not to have them sit on the ground. Anything that can be done to maximize a given helicopters’ availability and reliability will make its owner/operator happy -- and make them more likely to buy new helicopters from the same manufacturer when the time comes.
This summarizes Sikorsky’s strategy for customer success despite the economic downturn. “Our goal is to maximize available flight hours within a customer’s existing fleet,” said Simon Gharibian, Sikorsky’s director of fleet management, supportability, and training. “This comes down to making sure our customers have the right support, the right information to maintain their aircraft, and fast access to the right parts to keep their aircraft flying. Do this right, and when it comes time for our customers to choose the manufacturer of their next rotorcraft, chances are that they’ll choose Sikorsky.”
To Sikorsky’s credit, the company is ‘walking the talk’ when it comes to delivering on its promises. It has made substantial investments and operational changes to enhance support to Sikorsky customers. Moreover, these are end-to-end changes, going right back to the design process. “We receive a tremendous amount of HUMS (health and usage management system) data from our S-76 and S-92 helicopters,” said Gharibian. “Sometimes, there are trends in this data that indicate how a component redesign could extend its lifespan and robustness.”
The wealth of Sikorsky HUMS data also aids the company in operating its Fleet Management Center at the company’s 24/7 Customer Care Center in Trumbull, Connecticut.
“Using all the HUMs data that comes from our S-76s and S-92s, we accurately forecast the need for parts and other deliverables around the world,” Gharibian said. “This is because our system not only tells us where each individual S-76 or S-92 is flying, but also where it stands in terms of its operational lifespan and upcoming locational need for parts.” By knowing what will be needed where and when, Sikorsky can now stockpile soon-to-be-needed parts at various Forward Stocking Locations (FSLs); like the one located in Stavanger, Norway, to support S-92s in the oil and gas sector.
Meanwhile, Sikorsky’s Aircraft-On-Ground Response Center keeps a constant eye on Sikorsky helicopters requiring immediate assistance anywhere in the world. Thanks to improvements in its parts prediction/delivery system, Sikorsky has been able to reduce the volume of AOGs by over 75 percent in recent years, but unpredictable events still happen. “Our AOG Resolution Center has a digital map of the world, where the status of every single Sikorsky AOG is updated every 15 minutes,” said Gharibian.
On the operator side of the equation, Sikorsky has merged its online parts inventory search engine and ordering system into the single ‘Sikosky360’ portal (Then there’s the iFly Sikorsky app. It allows pilots to do takeoff, cruise, hover, and landing calculations on their Apple iPad for the S-76 and S-92 platforms. iFly can also calculate overall aircraft weight and center-of-gravity location; eliminating the need for pilots to carry paper manuals and calculators on board.
Collectively, these are the major steps Sikorsky has taken to ensure maximum flight hours for its civilian rotorcraft products. “If we want customers to continue to choose Sikorsky products, we must lead the way in offering the most reliable and easy-to-provision-and-service helicopters in the market,” said Gharibian.