HeliValue$, Inc. held its quarterly review of The Official Helicopter Blue Book®
on August 19, 2020. Resale pricing adjustments were made for the following helicopter manufacturers:
Airbus, Bell, Columbia Helicopters, Enstrom, Leonardo, MD, Robinson, Schweizer and Sikorsky
|BK117D2/EC145T2/H145||--||Resale pricing made ACTIVE|
|407GXi||--||Resale pricing made ACTIVE|
|429 WLG||--||Resale pricing made ACTIVE|
|505||--||Resale pricing made ACTIVE|
|107-II||--||Resale pricing made ACTIVE|
|234-LR||--||Resale pricing made ACTIVE|
|234-MLR||--||Resale pricing made ACTIVE|
|234-UT||--||Resale pricing made ACTIVE|
|600N||--||Added 2016 pricing|
|R22 Beta||↓||Pricing change|
|R22 Beta 2||↓||Pricing change|
|R22 Mariner 1||↓||Pricing change|
|R22 Mariner 2||↓||Pricing change|
|R44 Astro||↓||Pricing change|
|R44 Raven 1||↓||Pricing change|
|R44 Clipper 1||↓||Pricing change|
|S76C||--||Pricing page INACTIVE|
|S76C+||↓||VIP configuration down|
VIP configuration increase
Resale pricing adjustments are based on actual sales transactions and current market conditions such as overall trends in asking prices, increase or decrease in supply, demand, and sales volume. We obtain sales pricing data from owners and operators, lenders and lessors, brokers and equipment manufacturers worldwide.
While we do review all models each quarter, frequently traded models are updated as soon as they begin to show variation from the previously published values.
Stay up to date on resale pricing changes by purchasing an annual subscription.
2Q Market Overview
All Blue Book adjustments as well as our comments below have been based on the general global economy, and specifically the helicopter resale market, leading up to August 19, 2020.
When are we going to wake up from the nightmare 2020 continues to dish out? The helicopter industry just can’t catch a break.
As you can see in the list of aircraft impacted by this quarter’s pricing meeting, values are decidedly heading in the wrong direction.
Many operators have been working diligently to downsize and restructure their existing fleets. By removing older models and models no longer in demand, they are continuing to thin out nonoperational aircraft and to consolidate the number of different models they operate. In our last newsletter, we mentioned the operators were benefiting from “parting out” their unused aircraft and selling off parts. Sadly, this has in turn left them with many unsaleable parts and unflyable aircraft. This downward spiral has been a direct result of the COVID pandemic and the global economic shut down, of course, but it came on the heels of an already weak helicopter market. Operations and related businesses are still not operating at full capacity: some have had to close down all together. We expect to see further consolidation between operators (and lenders!) as we progress through 2020. Worse, we expect to see the heli-tour industry decimated by the end of the year, with Sundance Helicopters leading the pack last week in closing their doors forever.
Really there are only two bright-ish spots. 1) A fairly significant number of helicopters actually provide essential services: emergency medical, offshore oil transport, and firefighting all spring immediately to mind. 2) The price of WTI Crude more than doubled between April 17, 2020 (at $20.43) and August 18, 2020, ($43.12). We can only hope this is a sign that the contracts for heavy helicopters will remain steady. If we wanted to be very optimistic, perhaps even that those contracts will start to grow again.
Sorry, we don’t really feel that optimistic. The oil companies and the operators who serve them have become so efficient that we’re unlikely to see any significant increase in helicopter contracts until the price of oil exceeds $60/bbl again for an extended period, which will probably not be in the next 2-3 years. Sharon reminded me (and therefore all of us), however, that industry participants go in generations as much as families do. In 20 years the people who have learned these lessons so painfully will largely be retired, and the next gen of brash, forward-looking managers will decide that the by-then-$90/bbl-and-still-rising oil economy demands more workers on the platforms and more platforms and more exploration and more helicopters to service all of that. New financial entrepreneurs will look at the helicopter industry and decide it’s underfunded and ripe for exploitation. They will pump up the helicopter economy and everyone will make a massive amount of money. Again. Until the price of oil comes down. Again. This is not the first time this has happened; it’s just the first time we’ve had a pandemic we can conveniently blame.
This will pass, eventually. Our industry will look different, for a while. Until people forget, and efficiencies start to feel like restrictions, and the bubble starts to inflate once again.
If by chance you are a helicopter owner or operator and are seeing something other than what is being published, please give me a call at 1-847-487-8258 or shoot me an email at [email protected] and I will be happy to discuss with you. If you have any sales you would like us to know about I would also be happy to discuss with you. Without your willingness to share information, we wouldn’t be here to keep the industry informed and up to date.