• New Civilian Helicopter Deliveries to Reach 4,200-4,400 During 2011-2015 Period
• European Purchase Plans Seeing Strong Recovery; U.S. and Asian Purchase Plans Steady
• Light-Single and Twin-Engine Models Account for 66% of Expected Purchases
• Honeywell Portfolio Positioned to Support Large Fielded Fleets and Potential Future Growth
HELI-EXPO, Orlando, Fl., March 6, 2011 – Global deliveries of new civilian-use helicopters will increase 5 percent higher over the five-year period 2011 – 2015 according to projections in Honeywell’s (NYSE: HON) 13th Turbine-Powered Civilian Helicopter Purchase Outlook report. Improved economic growth prospects in key markets, combined with new models offering increased customer value are key variables driving improved purchase expectations.
In the short term, lingering tight credit conditions combined with high inventories of used current production models for sale continue to dampen order intake. The China market could be a strong contributor to broader demand for rotorcraft as the country opens its airspace to civil helicopter operation and begins production of indigenously-designed civil turbine-powered rotorcraft.
Global five-year fleet replacement and expansion plans increased to 25.4 percent in 2011, up from 24.9 percent in 2010. Although modest, the increase concludes a two-year period of declining demand, indicating the beginnings of a market recovery. Substantially higher purchase mentions in Europe drove the increase in total survey expectations. Purchase plans in major U.S and Asian centers of demand remained steady during the same period. Other regions declined modestly compared to 2010 though their purchase plans remain above the world average rate. Although specific purchase plans for 2011 remain subdued, expectations for new aircraft ordering in 2012 and 2013 increased 40 percent over 2011 levels, suggesting the recovery will gain momentum starting next year.
Global five-year demand for new turbine-powered helicopters is split almost 50-50 between the America’s and Europe, the Middle East, Africa and Asia. Latin America has the highest fleet replacement and expansion expectations of all world regions. In terms of demand for new helicopters, this region is the world’s third largest, following North America and Europe.
Reasons for Replacement
Operators who indicated the intent to replace a currently owned helicopter with a new one within the next five years cited “age of current aircraft” or “normal planned replacement cycle” as key drivers for their decision. This rationale is commonly seen in every survey. Other frequently mentioned reasons for purchasing a new helicopter included higher speed, upgrading to new technology and the need for bigger cabins. Requirements for improved useful load capability, lower maintenance costs and improved reliability/durability were also among the most frequently mentioned reasons.
Operator Preferences by Class of Helicopter
Light single-engine helicopters continue to be the most popular product class for five-year fleet replacement and expansion. Forty-five percent of all make/model mentions were for single-engine models in the 2011 survey, down slightly from the five-year average of 49 percent. The most frequently mentioned light-single models were AS350B series, Bell 407 and Robinson R66. Light-single helicopters had the highest concentrations of regional purchase interest in the Americas, while purchase interest was lower in Europe, Asia, the Middle East, Africa and India.
Due to the large active fleets and continued popularity measured in the survey of models such as the Bell 407 and AS350, Honeywell developed a series of RMU’s (Retrofits, Modifications and Upgrades) to provide improved value to operators of B407 and AS350 light single models within the large fleet of light single-engine class of helicopters.
Light twin-engine helicopters were the second most popular product class mentioned for purchase during the next five years. Approximately 23 percent of total survey mentions were for light twins. The most frequently mentioned models were Bell 429, EC135 and A109 series. The highest concentrations of demand for light twins were measured in Europe and Asia.
The third most frequently mentioned product class was medium twins at 22.5 percent of all make/model expectations. The AW139, Bell 412 and Sikorsky S76 series helicopters were most frequently mentioned for five-year purchase in this class. Medium twins appear to be most popular in Asia, the Middle East, Africa and India. Between 50 percent and 60 percent of all make/model mentions in these two regions were for medium twins. In North America, Europe and Latin America, medium twin mentions accounted for less than 30 percent of total mentions.
The vast majority of global civil helicopter mentions were concentrated in products manufactured by three OEMs, Eurocopter, Bell Helicopter and AgustaWestland. Less than 15 percent of mentions were for helicopters manufactured by all remaining OEMs.
New to this year’s survey, Honeywell asked all respondents to indicate their "current" satisfaction over the last year with each model of aircraft they operate. Respondents answered the question, “How likely is it that you would recommend this model to a friend or colleague?" Listed in alphabetical order, the top five make/models with the highest net scores in this year’s survey are:
• A109 Grand
• AS350B series
• AW139
• Bell 407
• EC145
These five models account for almost 50 percent of all survey make/model mentions. There were many other make/models currently in production that also received excellent scores that did not make it into the top five listing. These top five models can be considered the benchmarks of current production helicopters in terms of customer satisfaction and likelihood to promote.
Helicopter Utilization Expected to Increase
Plans for increased helicopter fleet utilization in 2011 were reported by operators in all but one region. Planned increases in each region were:
• North America (+18 percent)
• Europe (+7 percent)
• Latin America (+10 percent)
• Africa/Middle East (+23 percent)
• Asia (-6 percent).
The Middle East and Africa region reported the highest expected 2011 average utilization (560 hours per helicopter). When examining utilization trends across usage segments, oil and gas is the highest at an average 822 hours per aircraft followed by law enforcement at 598 hours and EMS at 577 hours. The lowest average utilization was reported by corporate segment operators at only 350 hours per helicopter.
Civilian Turbine Helicopter Survey
The 2011 Turbine Powered Civil Helicopter Outlook is based on Honeywell’s recently conducted customer expectations survey, an assessment of consensus forecasts, a review of factory delivery rates and analysis of future new helicopter introductions. The 2011 outlook excludes uniformed military demand for civil helicopters, but resulting civil estimates do include government and security force demand.
Methodology
This year’s survey queried more than 1,000 chief pilots and flight department managers of companies operating over 2,150 helicopters worldwide. The survey excluded large fleet or “mega” operators which were interviewed separately. The input received from the large oil and gas support and EMS fleet operators is factored into the overall outlook in addition to the individual flight department responses. The survey detailed the types of aircraft operated and assessed specific plans to replace or add to the fleet with new aircraft.
The 2011 outlook presents a snapshot of the helicopter business at a point in time and does not reflect unforeseen events such as an unexpected economic downturn, the impact of government stimulus programs, sharp increases or decreases in fuel costs, a fuel availability crisis, imposition of heavy user fees or other unfavorable regulations/taxes that could affect results in future years. Nor does it include speculation of aircraft manufacturers to offer discounts or raise prices, which can have a significant influence on sales activity of affected models.
NOTE: the recent sudden outbreak of political instability in the Middle East resulting in rapidly rising oil prices and supply uncertainties was not factored into the current survey and forecast results. Demand for civil rotorcraft is potentially sensitive to fuel price volatility and possible supply disruptions.
Based in Phoenix, Arizona, Honeywell’s aerospace business is a leading global provider of integrated avionics, engines, systems and service solutions for aircraft manufacturers, airlines, business and general aviation, military, space and airport operations.
Honeywell International (www.honeywell.com) is a Fortune 100 diversified technology and manufacturing leader, serving customers worldwide with aerospace products and services; control technologies for buildings, homes and industry; automotive products; turbochargers; and specialty materials. Based in Morris Township, N.J., Honeywell’s shares are traded on the New York, London, and Chicago Stock Exchanges. For more news and information on Honeywell, please visit www.honeywellnow.com.
This release contains certain statements that may be deemed “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, that address activities, events or developments that we or our management intends, expects, projects, believes or anticipates will or may occur in the future are forward-looking statements. Such statements are based upon certain assumptions and assessments made by our management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. The forward-looking statements included in this release are also subject to a number of material risks and uncertainties, including but not limited to economic, competitive, governmental, and technological factors affecting our operations, markets, products, services and prices. Such forward-looking statements are not guarantees of future performance, and actual results, developments and business decisions may differ from those envisaged by such forward-looking statements.
HAI 2011 Media Deck.pdf
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