International growth in the helicopter market David Louzado Business Development Director Prepared by Date David Louzado Sep 2013
Content 1. Airclaims introduction 2. Helicopter market 3. Airclaims activity 4. Operating leasing 5. Summary
Company Structure Claims Management Risk & Asset Management
Global Presence
Military helicopter production in 2013 forecast to reach 615 rotorcraft. Thereafter, yearly production will enter into decline, falling to only 380 by 2022. (Financial Times)--World military spending last year fell for the first time in 14 years, with the US share of the global total slipping below 40 per cent
~ 1% Growth (if we are lucky!) Population: 739,165,030 Registered Helicopters: 8,000
Population: 427,000,000 Registered helicopters: 2,500+
Population: 1,344,130,000 Registered helicopters: 800 Opportunity?
Decline in Military Spending 1 hour flying = 30 hours maintenance!
Decline in Military Spending
Decline in Military Spending Bristow Group to take over UK search and rescue from RAF The 1.6bn deal ends 70 years of search and rescue from the RAF and Royal Navy. Bristow will replace ageing helicopters with modern Sikorsky S-92s and AgustaWestland 189s.
Grown in Helicopter Industry 14000 New Deliveries 1989 to 1999 2000 to 2010 2012 to 2022 12000 10000 8000 6000 4000 2000 0
Grown in Helicopter Industry NEW SALES 35% USED TRANSACTIONS 65%
Grown in Helicopter Industry TOP 4: AgustaWestland Bell Helicopters EADS - Eurocopter Sikorsky Aircraft Corporation
Growth in Helicopter Industry
Growth in Helicopter Industry
Growth in Helicopter Industry TOP FOUR: 1. Corporate / private 2. EMS 3. Oil and gas / offshore transport 4. Police 18
Airclaims Key Helicopter Clients 1. Milestone - around 100 aircraft already, rapid growth 2. BNP Paribas 3. Lombard 4. GE Capital 5. Lloyds / BOS 6. Deutsche Bank -growing 7. Waypoint new entrant in acquisition mode 8. Macquarie new entrant in acquisition mode 19
Milestone Aviation nigeria, 0 Papua New guinea, 0 French Guyana, 1 Equatorial Guinea, 0 Myanmar, 0 India, 1 Switzerland, 0 Ireland, 1 Portugal, 1 UK, 16 Spain, 2 Malaysia, 2 Thailand, 2 Australia, 3 Canada, 3 Brazil, 14 Italy, 3 Denmark, 5 Mexico, 8 Indonesia, 5 USA, 12 Norway, 9
Airclaims helicopter asset management services in 2010 21
Airclaims helicopter asset management services in 2012 22
Growth Trend 23
Aircraft Operating Lease Cycle Modify/ maintain Delivery Store Asset Inspection Redelivery
Operating Lease Why? 1. Off balance sheet no depreciation 2. Low risk 3. No final payment 4. 100% finance 5. Choice of term break points 6. Hand it back and lease a replacement
Contributing Factors 1. Fixed wing market saturated 2. Banks reaching capital limits with clients spread of clients is limited so operating lease solves problem 3. Lending is limited and harder to secure 4. Operating lease keeps asset off balance sheet 5. Accounting standards rules driving away from debt funding 6. Key operators (such as CHC) so big that they need many sources 7. Continual growth of off-shore oil and gas industry 8. Enhanced surveillance and due diligence by financiers new investors and recession driven 9. Private equity investments into lessors 26
Residual Value Compared to Fixed Wing Values hold a lot better No ultimate life 40,000 parts in formation! No pressure cycles 30-50 years in operation ROI realised in first term, profit thereafter Lots of 2 nd and 3 rd tier uses Equipment easy to replace/remove 50% depreciation in first 10 years
Residual Value
Safety Stats Airline fatalities 0.9 per million flight hours Helicopter fatalities 7.6 per million flight hours Source: Mark Steven, Shell, CHC Helicopter Safety Summit, 2013
Summary Huge growth potential Emerging markets Privatisation of government services Finance moving to operating leases Long life = ROI + profit Higher risk environment
Thank You Courtesy National Geographic