State of the Industry
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State of the Industry
In the course of my work and researching a multitude of detail across the entire industry, it is becoming increasingly apparent that various and disparate sectors of the helicopter industry are entering an adjustment phase quite unlike anything that has ever been experienced before. There have been plenty of them in the past, and many of us have been caught in the cycle, either at a global or regional level and they are very painful and often humbling experiences.
My immediate focus was the large players in the Oil and Gas business, principally because of the scale of their business and revenues, the size of their fleets and workforce, but also their global reach. They are also a major driver in the Manufacturing, Leasing, MRO and technology development arenas as well, specifically as they completed a total fleet upgrade cycle during the past decade, which resulted in massive investment in very diverse large young fleets, that have now suddenly found themselves with precipitously declining demand. With the continued low price of oil, in my opinion, there is a genuine risk to all businesses in this sector, due to falling demand for helicopters, the massive debt carried by all the players, the size of their businesses and the real likelihood that any real recovery will lag the oil price so far, that potentially within the next two years the landscape may be quite unrecognizable.
Focussing on O&G, the current lack of Capital investment in the exploration and subsequent production phases, other than projects already funded and in most cases being delivered in 2016/17, predicts there is going to be a void in new business for some time. As the necessary Capital commitments will only be made once there is a sustainable recovery of the Oil and Gas price, this could be potentially end up being measured in years as opposed to months, depending on the duration of depressed pricing. There is no shortage of oil in current global production, despite what people have been predicting for years, and the current price and oversupply demonstrate this quite clearly. The global helicopter demand in the existing current O&G production business is very predictable, although perhaps more inclined toward further reduction driven by further efficiencies and cost savings. Therefore the number of operational helicopters could fall across the board, impacting every company out there. Contracts may change between operators, but essentially the fleet size and demand will remain constant, or slowly decline.
So what is going to happen? I don't know and these are only my opinions, so I am very interested in counter arguments and the opinion of others. If the decline continues, there will be a pretty constant number of helicopters in operation, with no new business opportunities, a large number of helicopters are going to end up parked and generate no revenue, no payments to banks or lessors, and no employment for their staff. Assuming that this will ultimately affect each operator equally (more or less), what is the market going to look like and what are these individual businesses going to look like?
There are a couple of lessons to be learned from the recent CHC Chapter 11 filing, although the root causes for this specific business were set back almost to the time of the acquisition. Some very important caveats became apparent, because the debt/lease load could not be sustained by a long term downturn in their Customers business. These business predictions and assumptions based upon a historic cyclical oil business, and a relatively reasonable assumption of market oil prices, immediately jeopardize the financial health of the business, should the bottom drop out of it, and prices start falling and maintaining low levels based on global economics. As we saw with CHC, shrinking demand left significant excess non-revenue generating capacity. More alarmingly, was the threat to their continued existence once the normally highly confidential terms of their leasing and banking covenants were revealed, the leases they were carrying left them with no option other than file for Chapter 11 protection and immediately terminate a large number of leases. Their current restructuring plan, sees a further removal of all leased helicopters in their fleet in the very near future.
This could potentially happen to most other operators out there, as the industry comes into focus and investors pull out of their stock positions driving the stock price down. This limits the ability to borrow, but a Chapter 11 filing by arguably the largest operator in the world at the time, will spook the lenders; who are going to become risk averse in the sector, affecting every type of affected business, the appetite for continued current and future investment and ready access to cash.
Are other operators going to end up forced into the same position as CHC, simply by the volume of expensive and parked non-revenue generating assets?
Will the overall reduction in demand be shared amongst all the operators in the O&G sector?
Will the declining value of collateralized assets owned by operators affect their continued access to credit for normal business operations?
Will matching expenses to revenue result in continued significant terminations of leased assets and employees?
Will there be a shared downsizing of all the major players in the same manner as CHC, to scale each business to the current and anticipated future demand?
Will helicopter lessors be able to sustain and survive not only the impact of CHC's actions, but potentially other operators in the same situation?
Will the resultant price reduction/valuation from large numbers of surplus helicopters effectively negate any equity in the asset?
Will the large number of aircraft in the secondary resale market curtail the new helicopter manufacturing sector and any new models in development and pre-production?
With the significant reduction of operating hours, what effect will this have on the entire MRO and support business, both OEM and independent?
Have OEM's applied limitations to manufacturing and inventory orders that will impact supportability in the short to medium term.
I don't want to focus on the EC225, but it is such a significant unknown at this time and is a the largest single variable in this market - there are other threads discussing this at length. What happens if it's marketability and market share fall significantly due to customer determination?
I am a very optimistic person, but also a realist. This is not intended to be alarmist or negative, but I am genuinely interested in the thoughts and opinions of others in the business. These are only opinions, and I have no belief that my opinions or assumptions are either correct or the only ones out there. I'm quite open to being shot down on any opinion I share.
I do know however, that a there are a significant number of intelligent and informed individuals on PPRuNe that have insight and very valid opinions on the current and future state of the business.
It is my intent to post various contemporary reviews and analysis on this thread regarding the various companies, and would encourage anyone else so inclined to please do the same.
There's a lot in play right now. I would much rather see a rapid oil price and business recovery and consequent return to normality.
My immediate focus was the large players in the Oil and Gas business, principally because of the scale of their business and revenues, the size of their fleets and workforce, but also their global reach. They are also a major driver in the Manufacturing, Leasing, MRO and technology development arenas as well, specifically as they completed a total fleet upgrade cycle during the past decade, which resulted in massive investment in very diverse large young fleets, that have now suddenly found themselves with precipitously declining demand. With the continued low price of oil, in my opinion, there is a genuine risk to all businesses in this sector, due to falling demand for helicopters, the massive debt carried by all the players, the size of their businesses and the real likelihood that any real recovery will lag the oil price so far, that potentially within the next two years the landscape may be quite unrecognizable.
Focussing on O&G, the current lack of Capital investment in the exploration and subsequent production phases, other than projects already funded and in most cases being delivered in 2016/17, predicts there is going to be a void in new business for some time. As the necessary Capital commitments will only be made once there is a sustainable recovery of the Oil and Gas price, this could be potentially end up being measured in years as opposed to months, depending on the duration of depressed pricing. There is no shortage of oil in current global production, despite what people have been predicting for years, and the current price and oversupply demonstrate this quite clearly. The global helicopter demand in the existing current O&G production business is very predictable, although perhaps more inclined toward further reduction driven by further efficiencies and cost savings. Therefore the number of operational helicopters could fall across the board, impacting every company out there. Contracts may change between operators, but essentially the fleet size and demand will remain constant, or slowly decline.
So what is going to happen? I don't know and these are only my opinions, so I am very interested in counter arguments and the opinion of others. If the decline continues, there will be a pretty constant number of helicopters in operation, with no new business opportunities, a large number of helicopters are going to end up parked and generate no revenue, no payments to banks or lessors, and no employment for their staff. Assuming that this will ultimately affect each operator equally (more or less), what is the market going to look like and what are these individual businesses going to look like?
There are a couple of lessons to be learned from the recent CHC Chapter 11 filing, although the root causes for this specific business were set back almost to the time of the acquisition. Some very important caveats became apparent, because the debt/lease load could not be sustained by a long term downturn in their Customers business. These business predictions and assumptions based upon a historic cyclical oil business, and a relatively reasonable assumption of market oil prices, immediately jeopardize the financial health of the business, should the bottom drop out of it, and prices start falling and maintaining low levels based on global economics. As we saw with CHC, shrinking demand left significant excess non-revenue generating capacity. More alarmingly, was the threat to their continued existence once the normally highly confidential terms of their leasing and banking covenants were revealed, the leases they were carrying left them with no option other than file for Chapter 11 protection and immediately terminate a large number of leases. Their current restructuring plan, sees a further removal of all leased helicopters in their fleet in the very near future.
This could potentially happen to most other operators out there, as the industry comes into focus and investors pull out of their stock positions driving the stock price down. This limits the ability to borrow, but a Chapter 11 filing by arguably the largest operator in the world at the time, will spook the lenders; who are going to become risk averse in the sector, affecting every type of affected business, the appetite for continued current and future investment and ready access to cash.
Are other operators going to end up forced into the same position as CHC, simply by the volume of expensive and parked non-revenue generating assets?
Will the overall reduction in demand be shared amongst all the operators in the O&G sector?
Will the declining value of collateralized assets owned by operators affect their continued access to credit for normal business operations?
Will matching expenses to revenue result in continued significant terminations of leased assets and employees?
Will there be a shared downsizing of all the major players in the same manner as CHC, to scale each business to the current and anticipated future demand?
Will helicopter lessors be able to sustain and survive not only the impact of CHC's actions, but potentially other operators in the same situation?
Will the resultant price reduction/valuation from large numbers of surplus helicopters effectively negate any equity in the asset?
Will the large number of aircraft in the secondary resale market curtail the new helicopter manufacturing sector and any new models in development and pre-production?
With the significant reduction of operating hours, what effect will this have on the entire MRO and support business, both OEM and independent?
Have OEM's applied limitations to manufacturing and inventory orders that will impact supportability in the short to medium term.
I don't want to focus on the EC225, but it is such a significant unknown at this time and is a the largest single variable in this market - there are other threads discussing this at length. What happens if it's marketability and market share fall significantly due to customer determination?
I am a very optimistic person, but also a realist. This is not intended to be alarmist or negative, but I am genuinely interested in the thoughts and opinions of others in the business. These are only opinions, and I have no belief that my opinions or assumptions are either correct or the only ones out there. I'm quite open to being shot down on any opinion I share.
I do know however, that a there are a significant number of intelligent and informed individuals on PPRuNe that have insight and very valid opinions on the current and future state of the business.
It is my intent to post various contemporary reviews and analysis on this thread regarding the various companies, and would encourage anyone else so inclined to please do the same.
There's a lot in play right now. I would much rather see a rapid oil price and business recovery and consequent return to normality.
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This analysis of Bristow is 6 month old, but makes interesting reading due to the events that have taken place since it was published.
http://freemanweb.freeman.tulane.edu...ad/pdf/BRS.pdf
http://freemanweb.freeman.tulane.edu...ad/pdf/BRS.pdf
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This analysis of Era is 6 months old, and equally interesting reading due to events since the publication date.
http://freemanweb.freeman.tulane.edu...ad/pdf/ERA.pdf
http://freemanweb.freeman.tulane.edu...ad/pdf/ERA.pdf
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From today's Wall Street Journal, update on Bristow strategy.
Bristow Sees Drop in Energy-Related Work, Might Cancel Some Helicopter Orders - WSJ
Bristow Sees Drop in Energy-Related Work, Might Cancel Some Helicopter Orders - WSJ
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At least some analysts looking for an upturn. I wonder if this pay cut extends to Management?
Bristow Group Inc Stock Is Rising Now | Franklin Independent
Bristow Group Inc Stock Is Rising Now | Franklin Independent
CHC are in Chap 11 due to their incredibly poor leadership and decision making. The oil price certainly did not help but they would have entered bankruptcy regardless. They had majority of their leased assets sat idle because they failed to win or did not compete for contracts which did not give healthier returns.
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Brazil
In Brazil, after the Petrobras corruption scandal following the oil price dip they ended up cancelling many contracts and opted for high speed boats to transport passengers to many oil rigs in effort to reduce costs, not all of them, of course. Some companies here had the same or worse financial crises as CHC, although I don't think any of them filed for bankruptcy, they were either acquainted bigger players or ceased to operate. Many helicopters "left" the country as there was no work for them here.
I agree with a lot of what RR says.
My 10c worth:
The barriers to entry in the offshore industry are not so high that the market is closed. The lack of huge barriers, especially vs 10 years ago and the explosion in ac financing, means that markets get competition. Competition means is that returns are getting generally worse on all contracts. This is how the market is supposed to work.
Over time, these returns settle into an acceptable level or 'market price'. The market price is dictated by a number of factors including difficulty of execution, availability of assets, asset type, desperation for the work, client relationships etc. As aircraft are chosen as 'industry standard' - 139, 92, 225 etc, operators only pick these ac. They pay their pilots roughly the same, the bases are in the same place, they use the same subcontractors for ground handling, the same simulator systems etc. The contracts become a commodity as to all measureable metrics they are the same and with likely roughly the same profitability.
The offshore industry is now in that state where it is unlikely there is a significant difference in standards between the top operators. I would be surprised if at the operational level there are many contracts which are hugely profitable anymore but there are plenty that are acceptably profitable to the operators who fly them.
IMO - Keeping above the waterline in this industry in the future will be one for sensible management teams with diversified customer bases across industries, EMS, offshore, SAR, military, training, utility, maybe even VIP and tourist. If one thing comes from CHC Ch 11 it should be that an O&G only model is too susceptible to oil price fluctuations. It would be ok if during the good times everyone was making enormous sums of money but they aren't (because of the competition) so the industry finds itself unable to make huge $ in the good times and crucified in the bad times. Aviation has always been this way (FW is the same). The only hedge to this issue is diversifying the model, running lean all the time (incl the good times) and never closing out an opportunity to make money because 'it's not core business'...
I think Babcock MCS already grasped this quite well, BRS too to an extent. The issue is if there is enough diversifying available for CHC, PHI, ERA etc to jump on to it too. I suspect not. The survivors will get bigger and the smaller operations will sink. I think the next 3 years will redraw the offshore operators business models radically.
The effect this will have elsewhere in the service providers to the offshore industry will be profound. Here are my predictions:
1. A couple of leasing companies will go bankrupt following CHC's ac returns which will be followed by other operators doing likewise with excess capacity, albeit not necessarily via the Ch 11 mechanism.
2. Unionised salaries will drop by 15% (cheating here as I see that BRS already started this)
3. At least one of the following will cease to exist: CHC, BRS, PHI, ERA, Heli Union, NHV, Everett. Maybe 2.
4. (States and) Oil companies will divest their heli operations as they become a drain on resources and an unwanted distraction leaving most work in private hands.
5. More centralisation of offshore training and adoption of OGP wide standards for sim work and flying, removing large chunks of ambiguity within operating and training manuals.
6. Regionally powerful operators (Pawan Hans, Weststar, Heliconia et al) will form partnerships with surviving large operators to take advantage of their scale and resources to drive efficiency in their own business.
Head above parapet - any thoughts?
My 10c worth:
The barriers to entry in the offshore industry are not so high that the market is closed. The lack of huge barriers, especially vs 10 years ago and the explosion in ac financing, means that markets get competition. Competition means is that returns are getting generally worse on all contracts. This is how the market is supposed to work.
Over time, these returns settle into an acceptable level or 'market price'. The market price is dictated by a number of factors including difficulty of execution, availability of assets, asset type, desperation for the work, client relationships etc. As aircraft are chosen as 'industry standard' - 139, 92, 225 etc, operators only pick these ac. They pay their pilots roughly the same, the bases are in the same place, they use the same subcontractors for ground handling, the same simulator systems etc. The contracts become a commodity as to all measureable metrics they are the same and with likely roughly the same profitability.
The offshore industry is now in that state where it is unlikely there is a significant difference in standards between the top operators. I would be surprised if at the operational level there are many contracts which are hugely profitable anymore but there are plenty that are acceptably profitable to the operators who fly them.
IMO - Keeping above the waterline in this industry in the future will be one for sensible management teams with diversified customer bases across industries, EMS, offshore, SAR, military, training, utility, maybe even VIP and tourist. If one thing comes from CHC Ch 11 it should be that an O&G only model is too susceptible to oil price fluctuations. It would be ok if during the good times everyone was making enormous sums of money but they aren't (because of the competition) so the industry finds itself unable to make huge $ in the good times and crucified in the bad times. Aviation has always been this way (FW is the same). The only hedge to this issue is diversifying the model, running lean all the time (incl the good times) and never closing out an opportunity to make money because 'it's not core business'...
I think Babcock MCS already grasped this quite well, BRS too to an extent. The issue is if there is enough diversifying available for CHC, PHI, ERA etc to jump on to it too. I suspect not. The survivors will get bigger and the smaller operations will sink. I think the next 3 years will redraw the offshore operators business models radically.
The effect this will have elsewhere in the service providers to the offshore industry will be profound. Here are my predictions:
1. A couple of leasing companies will go bankrupt following CHC's ac returns which will be followed by other operators doing likewise with excess capacity, albeit not necessarily via the Ch 11 mechanism.
2. Unionised salaries will drop by 15% (cheating here as I see that BRS already started this)
3. At least one of the following will cease to exist: CHC, BRS, PHI, ERA, Heli Union, NHV, Everett. Maybe 2.
4. (States and) Oil companies will divest their heli operations as they become a drain on resources and an unwanted distraction leaving most work in private hands.
5. More centralisation of offshore training and adoption of OGP wide standards for sim work and flying, removing large chunks of ambiguity within operating and training manuals.
6. Regionally powerful operators (Pawan Hans, Weststar, Heliconia et al) will form partnerships with surviving large operators to take advantage of their scale and resources to drive efficiency in their own business.
Head above parapet - any thoughts?
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Situation seems to be like a perfect storm for the helicopter industry.
Fracking, low demand, high output by the Saudis, CHC carrying large amounts of debt after the sale to an investment firm, heli pilots out of work.
However, perhaps in a few years when demand increases/supply decreases there could be a mad scramble to ramp up for offshore drilling and support.
Fracking, low demand, high output by the Saudis, CHC carrying large amounts of debt after the sale to an investment firm, heli pilots out of work.
However, perhaps in a few years when demand increases/supply decreases there could be a mad scramble to ramp up for offshore drilling and support.
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Wise words from Llanelli, (Know Where? Special)
xept the barrier to entry which they've all tried to engineer doesn't work, so they're all 'screwed', they're in bed with the regulators (who don't understand what they are doing), and think it's cleaver to insist on the most expensive solution (as all incumbent contract holders do/always have).
So they've come up with helicopters designed by electrical engineers, that will capsize and drown you WHEN (not 'if') they have to land on the water (that they will have to do at about the same rate that singles do, xept not because of the engines, mostly the other issues, arising from insisting on engine redundancy), pricing boats into being a more viable solution. Not understanding 'anti-fragile', no diversity leads to catastrophic collapse by all, together, as the shared thresholds of survivability are all hit at the same time, (xept those that ditch their investors instead, well done CHC, cynical rebirth).
BIG twins, fun while it lasts
xept the barrier to entry which they've all tried to engineer doesn't work, so they're all 'screwed', they're in bed with the regulators (who don't understand what they are doing), and think it's cleaver to insist on the most expensive solution (as all incumbent contract holders do/always have).
So they've come up with helicopters designed by electrical engineers, that will capsize and drown you WHEN (not 'if') they have to land on the water (that they will have to do at about the same rate that singles do, xept not because of the engines, mostly the other issues, arising from insisting on engine redundancy), pricing boats into being a more viable solution. Not understanding 'anti-fragile', no diversity leads to catastrophic collapse by all, together, as the shared thresholds of survivability are all hit at the same time, (xept those that ditch their investors instead, well done CHC, cynical rebirth).
BIG twins, fun while it lasts
II - happy for people to disagree with me but BRS's results last week were terrible and they lost 28% in a day, including 21% while the call was on. I'm not saying it will be them but the finance guys think as a stock it's a dog with fleas right now. It's a major cash flow issue.
PHI - I'll defer to greater knowledge. Wasn't seeking to tar all with same brush, more that kind of size organisation needs to go before equilibrium in the industry takes hold.
PHI - I'll defer to greater knowledge. Wasn't seeking to tar all with same brush, more that kind of size organisation needs to go before equilibrium in the industry takes hold.
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Clearly there are major current issues in O&G and the leasing business with a lot of excess aircraft inventory.
Nowherespecial mentioned diversification and certainly that is desirable but it seems to me that there is excess capacity in many sectors - EMS in the US for one. One of the things I would like comment on is asset valuation which in many cases is leveraged (quite probably with covenants). At some point one would think that these valuations might be questioned, which will impact many facets of an organizations trading/operational capability. Planned fleet renewal and disposition, finance structures, existing obligations, debt ratios, depreciation expense charges or write downs would all come into play but a bit like leading up to the housing bubble, no one is looking at it or the potential impact in the supposedly healthy areas of the industry.
Acknowledging that there is a difference when considering O&G with medium/heavy twins and everything else using singles/light twins but I don't see how you separate the two in terms of appetite or concern where fleet value exceeds $800m in one case I'm looking at. I would enjoy reading comments from those more in tune with the aircraft market.
Nowherespecial mentioned diversification and certainly that is desirable but it seems to me that there is excess capacity in many sectors - EMS in the US for one. One of the things I would like comment on is asset valuation which in many cases is leveraged (quite probably with covenants). At some point one would think that these valuations might be questioned, which will impact many facets of an organizations trading/operational capability. Planned fleet renewal and disposition, finance structures, existing obligations, debt ratios, depreciation expense charges or write downs would all come into play but a bit like leading up to the housing bubble, no one is looking at it or the potential impact in the supposedly healthy areas of the industry.
Acknowledging that there is a difference when considering O&G with medium/heavy twins and everything else using singles/light twins but I don't see how you separate the two in terms of appetite or concern where fleet value exceeds $800m in one case I'm looking at. I would enjoy reading comments from those more in tune with the aircraft market.
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The writing is on the wall, for everyone.
As an outsider, with no industry knowledge, might I suggest that you look at the real world, out with the rotary wing environment?
A reduction, as we are seeing in E&P means that not only helicopter crews are seeing a surplus of capacity in relation to demand. All levels of staff on platforms are now subject to it being a buyers market. Longer periods offshore, boat transfers and the ability to drop anyone, no matter their skill set, all point to reduce op costs and no downside.
Of course it is important that the chance to cull is taken wisely and the right guys get chopped, but in the real world, well, some good guys will get binned for no good reason.
For everyone working offshore saying they will not do four on one off, there is someone back home asking what he will do instead of working offshore.
Take a look at the Nimrod cancellation. How many people, apparently in the know, were adamant that LRMPA could not be abandoned? The whole case for the Nimrod was built upon the unquestioned requirement for such a beast. Take away the airframe and it becomes very obvious that the unthinkable is the reality.
Not having the Nimrod is of no consequence, because the client (MOD) has decided that the RAF do not need to carry out the tasking.
When the oil companies decide to half the number of change overs, they will expect to do half the number of helicopter trips and therefore pay half the cost. They will of course face in an increase in fees for boats, but still save substantial money.
Half of your industry sector wiped out. The knock on into SAR, EMS, Law Enforcement, VIP and retention rates for military pilots should not be ignored.
As for the finance aspect... I don't see the money men supporting the next round of expansion of fleets because the Oil companies are back in the game.
A reduction, as we are seeing in E&P means that not only helicopter crews are seeing a surplus of capacity in relation to demand. All levels of staff on platforms are now subject to it being a buyers market. Longer periods offshore, boat transfers and the ability to drop anyone, no matter their skill set, all point to reduce op costs and no downside.
Of course it is important that the chance to cull is taken wisely and the right guys get chopped, but in the real world, well, some good guys will get binned for no good reason.
For everyone working offshore saying they will not do four on one off, there is someone back home asking what he will do instead of working offshore.
Take a look at the Nimrod cancellation. How many people, apparently in the know, were adamant that LRMPA could not be abandoned? The whole case for the Nimrod was built upon the unquestioned requirement for such a beast. Take away the airframe and it becomes very obvious that the unthinkable is the reality.
Not having the Nimrod is of no consequence, because the client (MOD) has decided that the RAF do not need to carry out the tasking.
When the oil companies decide to half the number of change overs, they will expect to do half the number of helicopter trips and therefore pay half the cost. They will of course face in an increase in fees for boats, but still save substantial money.
Half of your industry sector wiped out. The knock on into SAR, EMS, Law Enforcement, VIP and retention rates for military pilots should not be ignored.
As for the finance aspect... I don't see the money men supporting the next round of expansion of fleets because the Oil companies are back in the game.
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This analysis focuses and updates on a number of issues that have been reported on these pages recently concerning Bristow. There are some very serious issues that need to be addressed, and obviously the timing is becoming critical.
Bristow Group: Near Term Catalyst For 45% Drop - Bristow Group Inc. (NYSE:BRS) | Seeking Alpha
Bristow Group: Near Term Catalyst For 45% Drop - Bristow Group Inc. (NYSE:BRS) | Seeking Alpha
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Short
Interesting article and analysis RR. A compelling reason for a short BRS at Friday's closing price 12.21 although there was high trade volume and maybe too late. Looks like it is breaking below the 50ma and poised for lower.
For all those at BRS including some friends, I wish the best.
For all those at BRS including some friends, I wish the best.
This SA article is as bad as the CHC one a few months ago with one crucial distinction: CHC was badly managed by people who believed their own hubris, BRS seems (emphasis on the appearance from the article) to be nakedly dishonest. If BRS end up in front of the same judge in Texas as CHC (entirely possible) looking for Ch 11 protection in the future, the Judge might not be so helpful.
The comments on UK SAR echo what I have heard before, including that BRS' deal captain left BRS shortly after the deal was concluded as mgmt were confused at how they'd ended up taking the contract at tiny if not negligible rates of return.
This is going to be a wild ride.
The comments on UK SAR echo what I have heard before, including that BRS' deal captain left BRS shortly after the deal was concluded as mgmt were confused at how they'd ended up taking the contract at tiny if not negligible rates of return.
This is going to be a wild ride.
It's interesting that BRS management keep talking up the amount of revenue from UK SAR, but don't discuss margins.
The amount of global corporate tax evasion that takes place seems to be absolutely monumental. What a shame the tax authorities hammer workers and individuals, simply because they are easy to get at.
Hopefully BRS can weather the storm, but out of the big three in the UK they do seem to be facing the biggest headwind at the moment.
The amount of global corporate tax evasion that takes place seems to be absolutely monumental. What a shame the tax authorities hammer workers and individuals, simply because they are easy to get at.
Hopefully BRS can weather the storm, but out of the big three in the UK they do seem to be facing the biggest headwind at the moment.
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RR thanks for the link - the article is a bit strong and drawing conclusions that may be loosely based on fact. There is an obvious incentive for him to sling mud so that they can make money from the short. You don't have to be a rocket scientist to know that BRS share price is likely to fall further given that they have the largest idle fleet and some of the highest carrying costs.
A sale and lease back only helps liquidity and cash for the short term in this current environment. Having said that, BRS does have some very real issues to contend with and it won't be long before a smaller, more agile CHC comes out of Chapter 11.
There has been a lot of value wiped out of this industry and unfortunately more will have to follow before it gets better. It is going to get worse before it gets better. If I was providing advice to a training helicopter pilot at the moment, I would tell them to have a plan b just in case...
Diversification is going to be very important for many very quickly.
A sale and lease back only helps liquidity and cash for the short term in this current environment. Having said that, BRS does have some very real issues to contend with and it won't be long before a smaller, more agile CHC comes out of Chapter 11.
There has been a lot of value wiped out of this industry and unfortunately more will have to follow before it gets better. It is going to get worse before it gets better. If I was providing advice to a training helicopter pilot at the moment, I would tell them to have a plan b just in case...
Diversification is going to be very important for many very quickly.
Here's a question, with every other operator absolutely bleeding with idle assets all over the place and making crew redundant, why are Weststar taking delivery of up to 7 aircraft and hiring crew? Did I miss a major contract award (highly possible I admit) or are they going down the old CHC model of "growth absolutely irrespective of the market conditions"....? Seems very punchy in this climate.
Weststar is flying For Kosmos Energy.
Kosmos is going relatively well with their explorations.
(Senegal/Marocco).
Rumour is that a exploration Drilling contract is about to be issued for Offshore Suriname. (Where Kosmos has 2 blocks)
I do not know if 1+1=2.
For 1 Rig this would Be limited to about 2 Helicopters.
Some Background on Weststar:
Weststar looks to expand horizons | New Straits Times | Malaysia General Business Sports and Lifestyle News
SLB
Kosmos is going relatively well with their explorations.
(Senegal/Marocco).
Rumour is that a exploration Drilling contract is about to be issued for Offshore Suriname. (Where Kosmos has 2 blocks)
I do not know if 1+1=2.
For 1 Rig this would Be limited to about 2 Helicopters.
Some Background on Weststar:
Weststar looks to expand horizons | New Straits Times | Malaysia General Business Sports and Lifestyle News
SLB