Market Comments 08/30/2016

We’re sure everyone is aware of the big events in recent months impacting the helicopter market: the Airbus H225 crash and grounding of the H225 and AS-332L2 Super Pumas, and CHC’s swiftly-following bankruptcy announcement.  Together they spur many complicated questions about the future of the Super Pumas and the resale market in general, especially for offshore oil support helicopters. 
 
Since the grounding of the Super Pumas, demand for the S-92A and AW139s has increased noticeably.  Operators hesitant to purchase aircraft with the current state of the oil and gas industry are turning to lessors.  This demand for alternate aircraft has allowed lessors to proactively find new homes for aircraft that were originally slotted for return in the CHC bankruptcy process.  With at least 98 of CHC’s fleet, and possibly up to 155, on the chopping block, this is a potential bright spot that may result in a less chaotic and overcrowded market as the CHC court-approved assets are returned or abandoned. 
 
For now, HeliValue$ has made the decision to switch off the Blue Book resale pricing pages for the H225 and AS-332L2.  We have been working closely with the OEM, lessors, operators, financial institutions, and brokers to gather as much information as possible to help us determine the best way to handle the questions regarding the current values and the future of this model. At this moment, there is no resale value, since there are no resale buyers. 
 
We anticipate some resolution to the current Super Puma market uncertainty once the AIBN determines the cause of the accident and Airbus determines the repair that may be needed.  Meanwhile, there is plenty of speculation, both around the world and here inside HeliValue$, but until the investigation has been completed the future is too uncertain to draw a reliable conclusion. 
 
The rest of the market has been fairly quiet since our last update.  There continues to be a glut of aircraft available.  This is especially true in the single light turbine market.  There has been some transaction activity in the single light turbine market and in some medium twins operating in EMS or VIP roles. 
 
On the bright side, if you’re ready to invest in the helicopter market, today is an awesome day to become a buyer.  You have your choice of the best helicopters in the world at the lowest prices of all time.  Allow yourself a large risk margin and a 20-year time frame, because we’re not at the bottom of the barrel yet.  But the effervescent Clark McGinn (of Waypoint Leasing) has the right idea: the helicopter market is highly cyclical and will rebound, even if Sharon is predicting it won’t be until March 11, 2018, at 10:17 AM.  We might not see $100/bbl oil again before she retires (this milestone seems to come around every 30 years or so, in inflation-adjusted currency, and she’s been “privileged” to see two of these milestones already), but there are still no viable alternatives to helicopter transport for offshore oil support, patient arrivals direct to a hospital, or pinpoint fire suppression. None of these jobs are UAV-compatible, nor is there any better way to accomplish them than a helicopter. 


For those following the oil and gas market here are some reports that may be of interest.

The US Energy Information Administration August Short Term Energy Outlook
The International Energy Agency August Oil Market Report