CHC LLC purchases Babcock
Whoever is brave enough will be hoping that the economy of scale of their already existing operation will enable them to thin-out most of the HQ function overheads and possibly real estate and leave just the bare contracts.
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Babcock appear to be refocusing on their core businesses, looking at disposing of all of their other helicopter investments. This will be a very interesting sale, as some of these assets if properly managed and operated have considerable market share in some significant market sectors. But like everything in this business today, who knows who will buy them and what they'll do with them.
https://dailybusinessgroup.co.uk/202...ny-remodelled/
https://www.bloomberg.com/news/artic...r-asset-review
https://dailybusinessgroup.co.uk/202...ny-remodelled/
The company said the Avincis acquisition in 2014 has not delivered shareholder value with low returns on high amounts of invested capital.
“We are selling our oil and gas aviation business and we are reviewing our options for the each of the aerial emergency services businesses,” it said in an update.
“We are selling our oil and gas aviation business and we are reviewing our options for the each of the aerial emergency services businesses,” it said in an update.
Lockwood announced plans to sell Babcock’s offshore helicopter operations to rival CHC Group last month after launching a strategy overhaul in November, weeks after taking charge. The CEO said in an interview he’s had approaches for all remaining parts of the Avincis chopper unit and is sure the group can avoid an equity raise, even if disposals take more than a year.
“We wouldn’t say it unless we were confident,” he said. “Those assets we’ve identified as not fitting our go forward strategy are good businesses. We believe from feedback from banks and others that there will be good interest".
“We wouldn’t say it unless we were confident,” he said. “Those assets we’ve identified as not fitting our go forward strategy are good businesses. We believe from feedback from banks and others that there will be good interest".
PPI Zulu wrote
Interesting, where did you get the $30m loss figure? I think it may be more. But with a relatively small number of helicopters in the oil and gas division of Babcock, just thinning out HQ functions will never deliver the kind of savings CHC will need to make. We know there has been a race to the contractual bottom by the helicopter operators, right now most are making operating losses, clearly evident by the published financials we can see.
There is little prospect of a turnaround until current contracts are re tendered at realistic prices, which is itself a challenge, maybe the industry consolidation will inject some financial realism into the helicopter operating business. The first job is for the helicopter operators to counter the oil and gas company expectation that every tender leads to a price reduction.
Any marketing and commercial department can win a cheap job, its been an easy life for the marketing and commercial teams for the last 10 years or so. The helicopter operator marketing and commercial teams are going to have to learn a new skill set to re define oil company expectations, raise prices back to where they need to be so the helicopter business can make a return.
Babcock. Neat trick: Win big contracts (at a loss) making yourself look 'order book attractive'. Sell $30m annual losses and on-going leasing costs to whomsoever wants the market share and is willing to take on the debt.
Whoever is brave enough will be hoping that the economy of scale of their already existing operation will enable them to thin-out most of the HQ function overheads and possibly real estate and leave just the bare contracts.
Whoever is brave enough will be hoping that the economy of scale of their already existing operation will enable them to thin-out most of the HQ function overheads and possibly real estate and leave just the bare contracts.
There is little prospect of a turnaround until current contracts are re tendered at realistic prices, which is itself a challenge, maybe the industry consolidation will inject some financial realism into the helicopter operating business. The first job is for the helicopter operators to counter the oil and gas company expectation that every tender leads to a price reduction.
Any marketing and commercial department can win a cheap job, its been an easy life for the marketing and commercial teams for the last 10 years or so. The helicopter operator marketing and commercial teams are going to have to learn a new skill set to re define oil company expectations, raise prices back to where they need to be so the helicopter business can make a return.
They are reviewing their options. So i would presume more announcements to come over the next 12 months. Reading their statements they want out of the aviation arm completely. But time will tell
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“We are selling our oil and gas aviation business and we are reviewing our options for the each of the aerial emergency services businesses,” it said in an update.
Direct quote from an internet news article .........
Looks like the UK Onshore division with its mixed bag of Offshore Wind Farm and Air Ambulance work may well be in the mix of items being considered ?
Will be interesting to see if another existing operator (at Staverton) and possibly the yellow outfit might be interested in certain purchases if
the "for sale" signs go up.
Direct quote from an internet news article .........
Looks like the UK Onshore division with its mixed bag of Offshore Wind Farm and Air Ambulance work may well be in the mix of items being considered ?
Will be interesting to see if another existing operator (at Staverton) and possibly the yellow outfit might be interested in certain purchases if
the "for sale" signs go up.
Last edited by dustycraphopper; 14th Apr 2021 at 11:46.
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Race to the bottom?
The oil & gas companies led this debacle, not the helicopter companies. They should be hung drawn and quartered to pay for their bullish, arrogant and frankly disgusting behaviour. The management of the helicopter companies always appear to be hammered on here. Honestly, if you knew about the behaviours on show even now you would be shocked. I’m giving up soon as I honestly can’t stomach working in such a twisted rotten to the core business which ruins good people just trying to keep something afloat. I’m sickened by it all.
PPI Zulu wrote
Interesting, where did you get the $30m loss figure? I think it may be more. But with a relatively small number of helicopters in the oil and gas division of Babcock, just thinning out HQ functions will never deliver the kind of savings CHC will need to make. We know there has been a race to the contractual bottom by the helicopter operators, right now most are making operating losses, clearly evident by the published financials we can see.
There is little prospect of a turnaround until current contracts are re tendered at realistic prices, which is itself a challenge, maybe the industry consolidation will inject some financial realism into the helicopter operating business. The first job is for the helicopter operators to counter the oil and gas company expectation that every tender leads to a price reduction.
Any marketing and commercial department can win a cheap job, its been an easy life for the marketing and commercial teams for the last 10 years or so. The helicopter operator marketing and commercial teams are going to have to learn a new skill set to re define oil company expectations, raise prices back to where they need to be so the helicopter business can make a return.
Interesting, where did you get the $30m loss figure? I think it may be more. But with a relatively small number of helicopters in the oil and gas division of Babcock, just thinning out HQ functions will never deliver the kind of savings CHC will need to make. We know there has been a race to the contractual bottom by the helicopter operators, right now most are making operating losses, clearly evident by the published financials we can see.
There is little prospect of a turnaround until current contracts are re tendered at realistic prices, which is itself a challenge, maybe the industry consolidation will inject some financial realism into the helicopter operating business. The first job is for the helicopter operators to counter the oil and gas company expectation that every tender leads to a price reduction.
Any marketing and commercial department can win a cheap job, its been an easy life for the marketing and commercial teams for the last 10 years or so. The helicopter operator marketing and commercial teams are going to have to learn a new skill set to re define oil company expectations, raise prices back to where they need to be so the helicopter business can make a return.
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The oil & gas companies led this debacle, not the helicopter companies. They should be hung drawn and quartered to pay for their bullish, arrogant and frankly disgusting behaviour. The management of the helicopter companies always appear to be hammered on here. Honestly, if you knew about the behaviours on show even now you would be shocked. I’m giving up soon as I honestly can’t stomach working in such a twisted rotten to the core business which ruins good people just trying to keep something afloat. I’m sickened by it all.
So quite how this can be laid at the feet of the Oil Companies, doesn't compute with me. It is always easiest to blame your Customers, but if they can't pay your rates, they'll look elsewhere. And guess what? Another helicopter company is ALWAYS prepared to do the work for less money - market forces at work. You can either keep flying, or shut the doors, and we have all seen what happened as a result. The only people who won were the incompetent Boards and Managements that allowed this situation to foment, grossly enriching themselves in the process, and the losers were anyone unfortunate enough to own stock in these companies, who saw their entire investment wiped out completely, and the employees that actually make the company run and generate the revenue, who ended up unemployed.
I do agree with you about getting out; today's helicopter business is not the one that the business was built on and has very little resemblance to the past organizations filled with talented, experienced people who garnered the respect of all around them, rather than the contempt of their staff. We are not at the end of it yet, and there will be more consolidation and likely much more pain before it ends. It is almost predictable that there will be other significant failures, sales, consolidation and changes in 2021, the scale of which is undetermined at this time. If there is no change into 2022, there may be widescale collapse of the largest operators who have now committed every asset with the hope of a turnaround, as the global business returns to smaller, more competitive, regional operators.
Or, maybe something completely different will turn the World on its head.
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Well my friend from my own experience I simply can’t agree wholly with you. You do make some valid points, however to suggest that all management in the 4 operators have been and are incompetent buffoons is quite simply not true. Don’t get me wrong I have worked with some undeniably questionable people in my time, but to a certain extent those behaviours were born from a sickening pressure from the oil & gas operators and yes, corporate leads higher up the chain in London, Vancouver and Dallas. That is also undeniably true. My own experience is that of trauma, regret, anger and sadness. I genuinely feel sorry for some people on here who say horrible sweeping generalisations and perhaps forget that not every manager is a complete incompetent hapless fool who doesn’t care. The truth probably does not exist because these forums are never wrong and people like me never speak up because they know they will be shot down as a non entity. I’ve had my fill of this industry. It’s murders good will and generates behaviours which are monstrous. I feel sorry for Babcock Oil & Gas staff who only wanted a future and now for many there is none as CHC will never accept the existing structures due to unprecedented cost cutting across business. I personally think the worst is yet to come, an inevitable negative event that will change everything. Good luck to you, im well and truly done with it all. Last post.
I think you may have this backwards? The Helicopter Operators got bigger and bolder and Offshore Helicopters became a boom business, with every carpet-bagging chancer showing up to slurp from the trough. Managing the companies, changing financial strategies, cashing out of equity, leasing everything, it all changed in the last decade. Then you need to look at the management personnel themselves - we already know the behaviours of the "leaders" who enriched themselves, hired their friends and then ran each of these companies into the ground (Quote. "They should be hung drawn and quartered to pay for their bullish, arrogant and frankly disgusting behaviour"). So which company should we consider first? CHC, PHI, Bristow, Era or Babcock as the big ones that made the biggest splash. The beneficial owners of the helicopter companies did this to themselves. They appointed people with zero knowledge, experience or interest in helicopters, then wondered why it didn't work out? And then the unthinkable happened, the bottom fell out of the oil market, (which for some of the more senior people in the industry, wasn't a first), and the entire house of cards collapsed. Manufacturers, Leasing outfits, Operators and anyone remotely involved in the offshore field watched it all fall apart.
So quite how this can be laid at the feet of the Oil Companies, doesn't compute with me. It is always easiest to blame your Customers, but if they can't pay your rates, they'll look elsewhere. And guess what? Another helicopter company is ALWAYS prepared to do the work for less money - market forces at work. You can either keep flying, or shut the doors, and we have all seen what happened as a result. The only people who won were the incompetent Boards and Managements that allowed this situation to foment, grossly enriching themselves in the process, and the losers were anyone unfortunate enough to own stock in these companies, who saw their entire investment wiped out completely, and the employees that actually make the company run and generate the revenue, who ended up unemployed.
I do agree with you about getting out; today's helicopter business is not the one that the business was built on and has very little resemblance to the past organizations filled with talented, experienced people who garnered the respect of all around them, rather than the contempt of their staff. We are not at the end of it yet, and there will be more consolidation and likely much more pain before it ends. It is almost predictable that there will be other significant failures, sales, consolidation and changes in 2021, the scale of which is undetermined at this time. If there is no change into 2022, there may be widescale collapse of the largest operators who have now committed every asset with the hope of a turnaround, as the global business returns to smaller, more competitive, regional operators.
Or, maybe something completely different will turn the World on its head.
So quite how this can be laid at the feet of the Oil Companies, doesn't compute with me. It is always easiest to blame your Customers, but if they can't pay your rates, they'll look elsewhere. And guess what? Another helicopter company is ALWAYS prepared to do the work for less money - market forces at work. You can either keep flying, or shut the doors, and we have all seen what happened as a result. The only people who won were the incompetent Boards and Managements that allowed this situation to foment, grossly enriching themselves in the process, and the losers were anyone unfortunate enough to own stock in these companies, who saw their entire investment wiped out completely, and the employees that actually make the company run and generate the revenue, who ended up unemployed.
I do agree with you about getting out; today's helicopter business is not the one that the business was built on and has very little resemblance to the past organizations filled with talented, experienced people who garnered the respect of all around them, rather than the contempt of their staff. We are not at the end of it yet, and there will be more consolidation and likely much more pain before it ends. It is almost predictable that there will be other significant failures, sales, consolidation and changes in 2021, the scale of which is undetermined at this time. If there is no change into 2022, there may be widescale collapse of the largest operators who have now committed every asset with the hope of a turnaround, as the global business returns to smaller, more competitive, regional operators.
Or, maybe something completely different will turn the World on its head.
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I think you may have this backwards? The Helicopter Operators got bigger and bolder and Offshore Helicopters became a boom business, with every carpet-bagging chancer showing up to slurp from the trough. Managing the companies, changing financial strategies, cashing out of equity, leasing everything, it all changed in the last decade. Then you need to look at the management personnel themselves - we already know the behaviours of the "leaders" who enriched themselves, hired their friends and then ran each of these companies into the ground (Quote. "They should be hung drawn and quartered to pay for their bullish, arrogant and frankly disgusting behaviour"). So which company should we consider first? CHC, PHI, Bristow, Era or Babcock as the big ones that made the biggest splash. The beneficial owners of the helicopter companies did this to themselves. They appointed people with zero knowledge, experience or interest in helicopters, then wondered why it didn't work out? And then the unthinkable happened, the bottom fell out of the oil market, (which for some of the more senior people in the industry, wasn't a first), and the entire house of cards collapsed. Manufacturers, Leasing outfits, Operators and anyone remotely involved in the offshore field watched it all fall apart.
So quite how this can be laid at the feet of the Oil Companies, doesn't compute with me. It is always easiest to blame your Customers, but if they can't pay your rates, they'll look elsewhere. And guess what? Another helicopter company is ALWAYS prepared to do the work for less money - market forces at work. You can either keep flying, or shut the doors, and we have all seen what happened as a result. The only people who won were the incompetent Boards and Managements that allowed this situation to foment, grossly enriching themselves in the process, and the losers were anyone unfortunate enough to own stock in these companies, who saw their entire investment wiped out completely, and the employees that actually make the company run and generate the revenue, who ended up unemployed.
So quite how this can be laid at the feet of the Oil Companies, doesn't compute with me. It is always easiest to blame your Customers, but if they can't pay your rates, they'll look elsewhere. And guess what? Another helicopter company is ALWAYS prepared to do the work for less money - market forces at work. You can either keep flying, or shut the doors, and we have all seen what happened as a result. The only people who won were the incompetent Boards and Managements that allowed this situation to foment, grossly enriching themselves in the process, and the losers were anyone unfortunate enough to own stock in these companies, who saw their entire investment wiped out completely, and the employees that actually make the company run and generate the revenue, who ended up unemployed.
Totally agree with every word rotor-rooter, spot on!
... ... ... The beneficial owners of the helicopter companies did this to themselves. They appointed people with zero knowledge, experience or interest in helicopters, then wondered why it didn't work out? And then the unthinkable happened, the bottom fell out of the oil market, (which for some of the more senior people in the industry, wasn't a first), and the entire house of cards collapsed. ... ... ... ...
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Well my friend from my own experience I simply can’t agree wholly with you. You do make some valid points, however to suggest that all management in the 4 operators have been and are incompetent buffoons is quite simply not true. Don’t get me wrong I have worked with some undeniably questionable people in my time, but to a certain extent those behaviours were born from a sickening pressure from the oil & gas operators and yes, corporate leads higher up the chain in London, Vancouver and Dallas. That is also undeniably true. My own experience is that of trauma, regret, anger and sadness. I genuinely feel sorry for some people on here who say horrible sweeping generalisations and perhaps forget that not every manager is a complete incompetent hapless fool who doesn’t care. The truth probably does not exist because these forums are never wrong and people like me never speak up because they know they will be shot down as a non entity. I’ve had my fill of this industry. It’s murders good will and generates behaviours which are monstrous. I feel sorry for Babcock Oil & Gas staff who only wanted a future and now for many there is none as CHC will never accept the existing structures due to unprecedented cost cutting across business. I personally think the worst is yet to come, an inevitable negative event that will change everything. Good luck to you, im well and truly done with it all. Last post.
The issue isn't specific to the helicopter business, it is the impact for every player in every facet of the offshore O&G industry, as it undergoes a forced evolution due to a baseline commodity repricing and a major change in market dynamics - the oil market pricing is now Customer, as opposed to Cartel, driven. If you are unable to evolve, you will simply disappear within a very short period of time. Change drives more change, and the market will simply evolve with or without you, so you had better be ready to adapt and radically alter your business model or simply shrink into irrelevance and non-existence, although unfortunately it may be a bit more dramatic than that! Small, nimble, regional and financially efficient operators with sound operating and safety practices are going to change the landscape completely, and this is a market ripe for disruption. Every remaining competitor now has the same basic business model and requirements; Leased assets, PBH support, Personnel and facilities. Great mission configured aircraft are readily available inexpensively, PBH is a fixed cost that will increase predictably, high quality trained and experienced personnel are readily available (and even more are looking), support facilities are available. So it really comes down to how efficiently and effectively you can run and manage your business, and that is where the new players will enter, or potentially the end-users establish new business models. If you look around at some of the quality people that have left the major operators, you will see them involved in other aspects of operation, but the experience and expertise is never lost. They may become the new O&G operators of the future, or be hired by them. I tend to share your view, that there is more, much more, to come.
I wish you all the best in whatever direction life takes you, Witret, and really do understand your position. There are people affected here that may be on their third employer in as many years, and they never quit a single job, but may now be left without employment through no fault or decision of their own. Very sad situation.
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As we approach the purchase date......
How mercenary will CHC be with the UK purchase? Will they simply grab anything worth having (SAR) and screw everyone else?
Airlines Investment Group - Loganair and BMI Regional. That's my forecast written in virtual stone!!!!
How mercenary will CHC be with the UK purchase? Will they simply grab anything worth having (SAR) and screw everyone else?
Airlines Investment Group - Loganair and BMI Regional. That's my forecast written in virtual stone!!!!
