Malaysia buying 40 Mil-17's?

[Cyclic Hotline]

The last line of this story is very interesting. I know they bought 2 ships last year, more on the way?

Ulan Ude Acft Factory Sends First Mi-171 'Copter to Iran.
ULAN UDE, January 13 (Itar-Tass) - The Ulan Ude aircraftmaking factory has begun to deliver five MI-171 transport helicopters to the Iranian Navy. The first helicopter has been shipped to the client, an official in the factory management told Itar-Tass on Thursday. The other four helicopters are to be sent in the first quarter of this year.

The aircraft builders will get payments under the contract only after it is fully filled. This is why credit resources were used to make the helicopters.

However, despite such rigid conditions set by the client, the aircraft factory is interested in filling the contract due to prospects which open up for the mastering of a new market for the commodity.

Until now, China was the main export partner of the factory. However, a contract for the delivery of 40 MI-8 helicopters to Malaysia is in the signing stage along with the Iranian one

[leading edge]

What is your point Cyclic? If it is just info, then thanks but it isn't going to do much to help any ppruners.

[Cyclic Hotline]

Leading Edge,
I was simply wondering if there was anyone out there with more information on this purchase, as I have neither read, nor heard anything about it previously?
It is primarily for information, but also is of interest as a portent of the possible direction of not only military, but commercial, helicopter operations in S.E. Asia.
The Malaysians have purchased Russian jet fighters in the last couple of years, so the business and political connection is established.
The Mi-8/17 purchase will be a replacement for the Sikorsky S61A (Nuri) helicopters operated by the RMAF for the past few decades. The Malaysian military has operated Western equipment since (and before) independence and has significant support capability in country. The significance of a sale of this magnitude should not be underestimated, as it might also influence commercial operations, not only in the country, but elsewhere within the region.
Commercial Russian machines impacted the fledgling helicopter logging business in East Malaysia, with pricing in a different tier from Western equipment. The success of a Logging operation however is dictated by the organization and the production of the operation, ie: price cannot substitute for production on the landing,-you might get what you pay for.
The 2 Blackhawks purchased by the Malaysian government are currently for sale, although the US State Department has apparently been paying attention to potential customers. With the purchase of the Lynx and the Wasp, I am sure that many manufacturers thought they would continue to make sales there.
Last year the Government bought 2 Mi-17's for firefighting, over the attempts to sell the Kamax and the Sikorsky Firehawk. This also removes commercial operators from this prospective operation.
As the commercial operators look at replacing some of their older, larger, offshore equipment, maybe the Russian equipment will become fully certifiable in Malaysia, and thus, competitive in this marketplace? This might provide a Malaysian operator a significant pricing advantage over competitors in the marketplace, not only within Malaysia, but elsewhere in the region.
This lead, might in turn, be followed by other S.E. Asian nations, and the operating and employment opportunities in the region might be lost. There are still a significant number of ex-pats and foreign operators working throughout S.E. Asia and I know for sure that some are PPRuNE'rs.
Russian helicopters are making significant inroads into Western operations. The significance of this on the future for all of us employed in the business, should not be lost.
Full Canadian certification of the KA-32 may occur as soon as late 2001. Bi-lateral certification of this product could have it in World-wide operation almost immediately following. Restricted operation of Russian helicopters is already occurring in Canada, Australia, Malaysia, South Africa, Chile, Europe, plus elsewhere. In addition to commercial operations in the Maldives and India, the U.N. has been contracting these machines extensively in the last decade.
Just want to stay abreast of the helicopter world, as the rotor turns. http://www.pprune.org/ubb/NonCGI/redface.gif

[leading edge]

I don't entirely disagree that some Russian machines will undoubtedly find their way into utility operations in SE Asia.

The Vietnamese have been operating MI 17 and MI 8s for many years in support of their domestic Vietsovpetro joint venture with the Russians but they also operate 330J Pumas and Mk 2 Super Pumas (with EFIS etc) in support of any Western oil companies.

Both Bristow and Helikopter Service had a presence in Vietnam for quite a few years during the 90s. They are no longer there because the Vietnamese have become extremely professional at operating Western helicopters and there is no significant Western oil company presence right now due to poor results from their fields. In fact, most of the fields developed by Western comapnies have been sold back to the Vietnamese.

The Malaysian civil offshore market is dominated by MHS who have a virtual monopoly and work primarily for Shell and Esso. The chances of either of those two companies using Russian equipment in Malaysia is zero.

The likely impact of Russian machines on the offshore market is small when the majority of oil and gas development is for Western companies and their criteria for helicopter equipment and standards effectively rules out much of the Russian equipment.

There are no current operations (including fire fighting) in Australia which use Russian aircraft. The KA 32 had a restricted licence to operate for a short time on a specific project under a discreet AOC. A long way from opening the flood gates to Russian helicopters, I think you'll agree. The largest fire fighting aircraft currently in use in Oz is the Sky Crane. The Sky Crane is also used extensively in Malaysia for logging in a market which presumably would be ideal for Russian helicopters using your assumptions.

Most Asian countries have used and continue to use Russian helicopters for military ops but their impact on the civil sector is still limited. Poor spares backup and support is the main reason that commercial companies have a hard time with Russian aircraft. The UN is different and will always go bottom line on price. Lloyd recently lost 2 Super Pumas in East Timor to the Russians for UN work. The sweet taste of low price often turns bitter when the UN start to work with some of the Russian crews though.

So to reply to your thread properly, by all means keep a watchful eye on the proliferation of Russian helicopters. Military sales do not always influence civilian operators to purchase the same equipment because the issues of certification are so complicated and expensive. I don't see CHC or Bristow busting their guts to buy Russian helicopters, they are smarter and know how the cheap purchase price often hides the true operating costs.

I wouldn't go spending money on any endorsements just yet.

LE

[Captain Catastrophy]

I don't entirely agree with the complacent attitude of leading edge - the bottom line in the offshore market these days is cost and oil companies tend ot develope selective amnesia when they start to compare safety and running costs v. initial downpayments. The reason a lot of Western companies no longer operate in the Far East is because the national companies bought Western equipment and started to operate it ( with varying degrees of ability ) at a lower cost. With oil companies looking to cut costs wherever possible, the next step is to operate cheaper machinary with local crews. The Mil 17 is a good aircraft properly supported and cheap and that is all that our clients want these days - so beware

[leading edge]

Catastrophy, you are not factually correct.

Operators in the "Far East" as you quaintly call it (must be a hangover from the days of the Empire but you don't have one any more) do not operate Western Helicopters cheaper than international operators.

If you knew what the international contract rates actually were for Western helicopters (and you obviously don't know)then you would realise that you speak with opinion rather than knowledge.

Anybody can operate Russian equipment cheaper than Western equipment because it costs less to buy.

Have you spent much time in the Asia Pacific (sorry, Far East) dealing with any oil companies? If you had then you would know their aviation policies and procedures and would not assume that Russian equipment will take over the region in offshore support.

If you are so convinced then go and pay for your conversion course, if you are right, you should get immediate work in the "Far East" and become wealthy.

At least you'll see a big bright thing in the sky called the sun which would be a novelty for you because it doesn't spend much time in Lincs does it?

[Captain Catastrophy]

Ouch! Think I trod on a couple of toes there. Not exactly sure why you wish to shoot people down rather than discuss things and I'm not entirely sure I agree with everything you say - you have the advantage of knowing who I am so drop me an e-mail to ************ and we'll talk about this in a more civilised manner. You'll know a few names to drop in so I know who you are!

[This message has been edited by Captain Catastrophy (edited 20 January 2000).]

[leading edge]

Captain Catastrophy

I don't know who you are, I only know you are in Lincs from your profile.

You have your points of view regarding the proiferation of Russian helicopters and I have mine.

My opinions are based on many years in the industry and the Asia Pacific region. I like to base my arguments on the best information I have available. I also try to enlighten people when they ask for information such as Magumba's request for information on Bristow Caribbean.

I'm afraid if I e-mail you then I will no longer be anonymous and, with respect, I would like to stay that way.

I only throw in jokes about Lincs to wind you up which I enjoy doing!! I don't mean to be offensive and if I am then take it with a pinch of salt!!

LE

[Captain Catastrophy]

Ok, Fair enough and we're getting off the thread. I will just say that just because it says Lincs on a profile doesn't mean that is where someone works, that he has webbed feet and gapped teeth. The Far East, empire and all is a mighty fine place to work, Mil 17's or no Mil 17s and I still think that there is a possible market for CIS machinary ( or would you prefer 'Soviet' ).

[Cyclic Hotline]

At the risk of becoming tedious, and boring the innocent bystander;

It is not a case of Russian machines "finding" their way into commercial utility operations in Asia-Pacific, they have been there for years. The KA-32, Mi-8, MI-17 and Mi-26 have all operated in commercial operations during the last decade. A number of operators (and contractors) worked Western and Russian equipment concurrently, so a reasonable comparison has certainly been made, and the shortcomings, for there may be many, noted.

The point regarding the demise of Western Operators in Vietnam, is well made. It must also be considered that as the Oil Majors departed the area, the local production companies would have considerable leverage to manipulate pricing of indigenous contractors, including helicopters. The ability to create and operate a domestic helicopter service, also relieves the need for all those tedious expats and repatriated profits, (must be another hangover from the days of the Empire)!

Case in point is indeed MHS, who succesfully assumed the role of primary Offshore provider for the country and continue to do so. As times and fortunes change, MHS continues to be an interesting example of the ability to create a National domestic operator, control it's pricing and wean itself from it's predecessor's support, to function in it's own right. Of course in the shadow of Esso and Shell, (whom I would agree, would probably not take highly to the concept of operating Russian equipment offshore), is good old Petronas. If the Government tells Petronas and MHS to operate Mi-17's, then thats what they will do. As you are no doubt aware, the Malaysian Government is quite adept at making things go its own way, ask Anwar!
The Russians are supposedly offering technology and R&D transfer, so the Malaysians will obviously be very interested.

This is also a great opportunity for the Russians. As you noted, the Russian equipment has suffered from limited support from the factory. Much of this can be directly attributed to the lack of domestic orders and the inability to adequately capitalize the industries. This has resulted in many potential purchasers shying away from the products offered, as any succesful helicopter operator became that way, from having safe, reliable, maintainable equipment balanced with strong support from the manufacturer and the certifying Airwortiness Authority.
This again becomes a key for the Malaysian deal, the Russians have lacked credibility, they no longer have the funding and resources to play in the competitive world marketplace. The placing of an order by the Malaysian Government would give them a significant, credible, order to (literally) take to the bank.

Although other Nations may have operated this equipment, the majority were in, or emerging from, the shadow of communist inspired politics. For a growing and ambitious nation to even consider this product, must be extremely exciting to the Russians. That they have only ever operated Western Helicopters, must be doubly exciting. Perhaps they would be keen to capitalise on the (surmised) ability of Malaysian industry to perhaps create a commercial marketplace and offer the levels of support, at least regionally, to induce others to purchase the same product.

There are currently no Russian Helicopters operating in Australia, however, the KA-32 was granted a restricted licence to operate domestically, thus creating a precedent. When the KA-32 was first introduced into Canada, they were granted a similar operating dispensation. The basis was to verify the viability of the machine for helicopter logging operations. Upon the expiration of the permit, the aircraft sat parked for some considerable time. In the next stage of the operation, the Operator was granted a "Restricted" operation certificate to permit further operation whilst the complete details of Canadian Airworthiness were worked out. A well publicised law-suit, attempted to challenge the permit, to no avail. (Perhaps Jean Cretien and Boris Yeltsin traded off Russian Helicopter operations for Bombardier sales?).
The KA-32 certification is now complete, with full unrestricted passenger carrying approval on the horizon. Certified under the same authority as all the recent new Bell products! Proposals have surfaced at various times regarding military applications for this machine in Canada. (Must be trying to get away from those quaint colonial products?)

The Russian equipment also tried the US as a market. James Baker, as Secretary of State, ordered the FAA to allow Russian helicopters to operate in the US, without any certification requirements being met. In a rare display of defiance, the FAA refused to do such a thing. Ultimately the Government relented, but the orders arrived from the highest level. There is still some activity going on, but nothing toward operating them. (Future thread perhaps).

As the Asia-Pacific region extends beyond the shores of Oz, I am sure you are aware of the Heli-Havest operation in NZ, where they have succesfully operated the Mi-17 for a number of years in logging, fire-fighting and utility operations.

The Skycrane and Chinook were used extensively in East-Malaysia until the Russian equipment showed up to work at rates significantly less than anyone else was prepared to get out of bed for! The lack of production, coupled to the collapse of the Asian economy, led to the end of the projects, and only recently has work re-started there with Western equipment.
The UN was the pre-eminent user of Russian helicopters for pax operations. As the death-toll from these aircraft grew, the UN started to look very seriously at the cause and effect. Although the cost of operations in dollars might have realised savings, the toll in lost lives did not. The review was ordered, and occurred, at the highest levels of UN management. The UN also proved that you can contract helicopter operations at a significantly lower cost than the Western operators, not only from the lower equipment procurement prices, but also from significantly lower manpower costs.

Finally (Thank God), the Western commercial operators have all reviewed the equipment in the Russian inventory, they would be foolish not to. At some time or another, many of them have proposed operation of these aircraft and have carried out, to a greater or lesser degree, engineering, operational and flight test analysis. Amongst these proposals was of course the operation of the Mi-26 on the North Sea for utility work!
Like any market driven business, if the means to operate a commercially viable piece of equipment, offering you a significant cost advantage over your competitor exists, you will go and get it. If you don't, your competition will.
If the customer is prepared to accept the equipment offered (for whatever reason), then somebody, somewhere will find the niche, because you can guarantee that someone is trying every day. The current poor performance of the majority of the major offshore helicopter operators is apparent to everyone in the business, a quick review of the stock pages can tell you all you need to know about the current prospects in the field.
I am neither pro, nor anti Russian helicopters. If I were confident of their ability to safely, reliably and consistently perform the missions I operate, I would have no hesitation in operating them. One of the key issues is of course support, and the existing operators all have horror stories about their respective suppliers.
Of course, not one of us operating Western Helicopters has the same instances to note about Bell, Sikorsky, MD, Eurocopter, Agusta or Westland?
Common to virtually all helicopters, the purchase price is in no way reflective of the true operating cost of the equipment. The monthly payment to the bank, is often the least of the overall monthly expenditures! Worse still is one your making payments on, that is continually broken down and unable to generate revenue.

Must run along now. As you have noted L.E., you are fortunate enough to be in Oz, summer time there now. So for the rest of us, who suffer in the Northern Hemisphere, be sure to put your sunscreen and hat on, and soak up a little sun for all us deprived PPRuNERs. :)
Always remember though, only Mad Dogs and Englishmen go out in the mid-day sun! ;) ;)

[leading edge]

Cyclic

What an excellent performance.

No disagreements really but if you went out today and purchased a new 332L2 the repayments to the bank probably would be the bulk of your expenditure and with that size of Western equipment, the capital probably does make up the largest part of the overall costs.

Captain Catastrophy

Yes, I noticed by your e-mail before you edited it that you are indeed in the Asia Pacific. sz online is in Shenzen, China I think. You must be one of the Bristow guys working out of Xili. You are most fortunate, still having a job with Bristow and working in China.

Zaijian

LE

[Captain Catastrophy]

So much for remaining anonymous. Captain Catastrophy signing off.......

Dieu Ni