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State of the Industry

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State of the Industry

Old 5th Aug 2020, 16:59
  #241 (permalink)  
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There have been many changes to the Industry since this post started, all more than adequately covered elsewhere, each deserving detailed discussion and analysis. Two recent stories, however, illustrate the systemic collapse of the valuations and demand for assets that still haven't reached their bottom, or ended in a viable transfer of ownership to a new entity. The last discussions of the future of Milestone and even the greater GECAS fleet, highlighted the impaired asset value, and I would hate to think what any of those numbers look like today, in either the Airline or Helicopter business. This announcement last week with the write-down of assets aligns very closely with the previous negotiation to sell the Organization and the interested parties' valuation of the assets. I'm not sure if this action is the portent of a sale, but it potentially seems quite possible.
https://www.ainonline.com/aviation-n...nes-value-729m

GECAS Slashes Milestone's Value by $729M

by Mark Huber
- July 31, 2020, 7:58 AMThe continuing decimation of the depressed offshore helicopter market writ large anew earlier this week when GECAS wrote down the value of its Milestone Aviation helicopter leasing unit by $729 million. Milestone holds the world’s largest fleet of Sikorsky S-92 heavy helicopters, used primarily in support of the offshore energy market.

The write-down was revealed this week in GECAS parent GE’s second-quarter 2020 10Q SEC filing in the form of a goodwill impairment. It represents a 41 percent devaluation of the $1.775 billion GECAS paid to acquire Milestone in 2015.

Milestone was founded by former NetJets chief Richard Santulli in 2010 with an initial capitalization of $500 million and based in Dublin, Ireland. It would go on to draw substantial investment from global financial powerhouses, including Lloyds, Barclays, and Lombard, the asset finance division of the Royal Bank of Scotland. Milestone built one of the world’s largest helicopter lease fleets that over the course of its first five years grew to 168 aircraft valued at $2.8 billion. It was quickly joined in the market space by a variety of new competitors, including Waypoint Leasing, LCI Aviation, Lobo Leasing, and Macquarie Rotorcraft Leasing.

The fallout from the 2008 recession and tumbling oil prices has had a lasting overhang on the offshore helicopter business, triggering a crescendo of bankruptcies and consolidations among operators and lessors in recent years.

https://www.ainonline.com/aviation-n...copters-parked

One in Five S-92 Helicopters Parked

by Mark Huber
- August 3, 2020, 10:32 AMWhile the offshore helicopter market is showing signs of recovery, 39 Sikorsky S-92s, comprising 19 percent of the global market, remain parked. Among the active fleet, flying hours are down 27 percent. Those are among the findings from the most recent “S-92 Fleet Census” from Air & Sea Analytics.

The report notes that offshore helicopter services companies Babcock, Bristow, CHC, and Lider are returning aircraft to lessors against the backdrop of one-quarter of the world’s mobile offshore oil rigs being scrapped since 2015. Nevertheless, Air & Sea Analytics director Steve Robertson said, “Relative to other [oil field services] segments, we’d argue it’s [the S-92] one of the best performing over the last 12 months.” But he acknowledged that many owners and operators are “having a rough time.” The largest concentration of based S-92s continues to be in the UK, with 41, but of that number only 29 are active.

Nevertheless, glimmers of hope remain. GECAS helicopter leasing unit Milestone Aviation is adding to its S-92 fleet, already the world’s largest, and finding placements for them. The overall count of heavies and super-mediums has increased slightly, from 214 to 224, a function of increased deliveries of the latter to offshore operators. The report found that “super-medium units continue to be delivered and find work in the market.” And at least two operators, Cougar and Chevron, are increasing their super-medium fleet size.
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Old 6th Aug 2020, 14:13
  #242 (permalink)  
 
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More bad news: https://helihub.com/2020/08/06/brist...News+Update%29
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Old 14th Oct 2020, 19:10
  #243 (permalink)  
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This is an interesting article, as it demonstrates the strategies that a business might utilize in a fight to grow market share in a shrinking market, put a Competitor out of business, or drive further consolidation through the acquisition of Babcock by an Organization even more desperate to remain in business than Babcock's stated goal of getting out of it. It is always worth considering that having a contract and operating it at a loss may be a better (cheaper) option than owning the assets and infrastucture and continuing to pay the cost of maintaining, insuring, and staffing it, with no revenue generation. This may trigger the next consolidation round, as the simplest mechanism to maintain pricing, is to reduce excess capacity and limit the Competition in the marketplace. It may be too late to recover the pricing in the short term, but just still being in business may be the ultimate survival goal of all the offshore operators. It's really starting to have major impacts now, beyond all the incredible things that have already happened in the last couple of years, and the almost unbelievable things that have happened so far this year. https://www.energyvoice.com/oilandga...pter-contract/

Babcock begins Total helicopter contract after rivals criticised ‘unsustainable pricing’

Babcock has started a North Sea helicopter contract with Total which rival CHC criticised as “unsustainable pricing”.by Allister Thomas
14/10/2020, 12:01 am
© Babcock Babcock has started a North Sea helicopter contract with Total which rival CHC criticised as “unsustainable pricing”.

In August, Babcock won the long-term contract from CHC to transport Total workers to its central North Sea platforms.

The US helicopter firm took a thinly-veiled swipe at Total over loss of the work, saying “unsustainable pricing, will ultimately see an end to future industry investment in technology, safety improvements and the next generation of engineers and pilots.”

Babcock has now started flights using its fleet of S-92 helicopters, with over a hundred men and women having safely been flown offshore in the first week.

Contract performance manager Michelle Innes said: “It’s great to see this contract get underway smoothly and efficiently. We’re looking forward to continuing to work with Total for years to come.”

Babcock is an established helicopter operator and Total already has first-hand experience of working with the company in the UK North Sea.

Flights to the Culzean and Gryphon fields are currently provided by Babcock under a separate agreement. Total has operated both fields since its acquisition of Maersk Oil in 2018.

Babcock will begin another contract to transport Total workers in Denmark in January, which has also been subject to criticism.

NHV, which lost out on the Danish deal, said in August that Babcock and Total were engaging “in a race to the bottom”.

Despite not having a presence in Denmark, Babcock undercut NHV in its bid, including the promise of new aircraft.

NHV CEO Steffan Bay said: “What I can say is that Total got what they wanted, even cheaper rates than they already had.

“Similar to CHC we had to give concessions to Total in the past, so it was not a very profitable contract for us anyway, hence the surprise that Babcock could perform it at even lower rates.”

Babcock did not respond to either CHC or NHV’s remarks.
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Old 14th Oct 2020, 19:53
  #244 (permalink)  
 
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[QUOTE

NHV, which lost out on the Danish deal, said in August that Babcock and Total were engaging “in a race to the bottom”.

Despite not having a presence in Denmark, Babcock undercut NHV in its bid, including the promise of new aircraft.

NHV CEO Steffan Bay said: “What I can say is that Total got what they wanted, even cheaper rates than they already had.

“Similar to CHC we had to give concessions to Total in the past, so it was not a very profitable contract for us anyway, hence the surprise that Babcock could perform it at even lower rates.”

Babcock did not respond to either CHC or NHV’s remarks.[/QUOTE]

What REALLY amuses me is that the ones who actually initiated the race to the bottom in the North Sea running contracts at a loss (ie Den Helder with Wintershall for example) now are criticizing the competitors.....go figure......
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