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Helicopter firms set sights lower

By Zhong Nan | China Daily | Updated: 2012-11-30 09:56
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The Guangdong public security department has bought an EC225 helicopter from Eurocopter, which will be used, among other things, in firefighting. Provided to China Daily

European consortium pins its sales hopes on opening up of china's low-altitude airspace

The Eurocopter Group, the world's largest helicopter maker in terms of revenue, is preparing to propel sales in China to cater for the nation's growing demand for the aircraft.

The pick-up in the general aviation sector can be put down to the country's stable economic growth, but it has long been recognized that China needs more helicopters to for wide-ranging use, including disaster relief, emergency medical services, offshore operations, utility work and commercial flights.

As a main subsidiary of the European Aeronautic Defense and Space Company, Eurocopter has 40 percent of China's civil helicopter market share with 130 helicopters in operation.

The company, a French-German-Spanish consortium, says demand has increased significantly in the past few years and hopes its fleet can be expanded to at least 500 in China by 2015.

Norbert Ducrot, Eurocopter's senior executive vice-president for the Asia-Pacific region, says it had been selling about 10 helicopters annually in China until last year, when it sold 30.

"We are anticipating this number to increase from 50 to 80 units a year in China, but it will depend on the actual rate of the opening of the skies," Ducrot says.

In 2011, Eurocopter confirmed its position as the world's largest helicopter maker with a turnover of 5.4 billion euros ($6.9 billion), orders for 457 new helicopters, and a 43 percent market share in the civil and public sectors.

The company achieved 58 million euros in revenue in China last year, a 70 percent increase on 2010. Orders also hit a record 300 million euros.

China's Citic Offshore Helicopter Co Ltd has ordered seven EC225 LP long-range helicopters in a new agreement with Eurocopter, which paves the way for future joint ventures involving the two companies in training and maintenance services to serve China's rapidly developing rotary-wing market.

The EC225 LP Super Pumas acquired in this latest order will be delivered by Eurocopter over three years from next month. They will be used in COHC's airlift duties for the offshore oil and gas industry.

The Chinese government is gradually opening more low-altitude airspace, below 1,000 meters, for private aircraft used in general aviation. This move is predicted to spur demand for general aviation aircraft, including helicopters and light aircraft.

Zhao Ying, a researcher at the Institute of Industrial Economics of the Chinese Academy of Social Sciences in Beijing, says helicopter producers and users will benefit most from the opening up of airspace.

"This market will develop fast as the government attaches more importance to the improvement of public services, and this will require more helicopters for public security, environmental monitoring, forest fire prevention, medical aid, private use, film and leisure businesses."

According to the estimates in the 2011-15 China Rotating Helicopter Market Analysis and Investment Outlook Report, from Beijing Institute Information Consulting Co, there are more than 50,000 potential users of public service and private helicopters in China. The number of helicopters in operation could exceed 1,000 once airspace regulations are relaxed.

Medical services, disaster relief and rescue mission have also become part of the new growth area for the industry, as helicopters play a key role in these operations. In the next five years China needs at least 100 helicopters for observation and relief related to natural disasters, the report says.

To develop its presence in China, Eurocopter set up a helicopter completion and customization center in Tianjin in August for its best-selling product there, the Ecureuil series. The light helicopters are popular worldwide for aerial utility work, police operations, business aviation and tourist flights.

The company and the Tianjin Port Free Trade Zone, which is a partner of Airbus for its Tianjin-based A320 final assembly line, formed a joint venture.

"Eurocopter is the majority shareholder in this joint venture," Ducrot says. "We are aiming to commence operations by the end of 2013. According to Chinese market growth and demand, we anticipate delivering around two units per month over the first two years."

Ducrot says this investment is Eurocopter's first step toward meeting the expected growth in China's helicopter demand, before developing more complex projects in the country.

The helicopter market in China can already be seen to have taken off in the wealthy village of Huaxi in East China's Jiangsu province, where the locally run company Jiangsu Huaxi General Aviation Co Ltd has bought two helicopters at a total cost of 90 million yuan ($14.41 million; 11.27 million euros).

In July, the Civil Aviation Administration of China granted a license to the new company, which mainly offers air travel services for villagers and tourists.

By the end of 2015, the village company hopes to expand its fleet to five helicopters and one business jet, and take on other services, such as emergency rescue and multi-purpose commercial flights.

Helicopters made in the United States, Italy and Russia also account for a large share of China's helicopter market. Bell Helicopter in the US is aiming to sell more light helicopters to China's rich and the public sector over the next five years.

The Anglo-Italian manufacturer AgustaWestland claimed 90 percent of the nation's public security equipment market when it gained orders from law enforcement authorities throughout China for 30 helicopters in August.

However, as the helicopter sector is not as developed as in other countries, a shortage of technicians and pilots may hamper its growth in this emerging market.

Bruno Boulnois, CEO of Eurocopter China Co Ltd, says his company has launched a number of investment activities in China, including training pilots and technicians, setting up a spare parts hub in Beijing, and developing a network of support centers.

The company has set up offices in Beijing, Shanghai, Shenzhen, Hong Kong, Harbin, Wuhan and Chengdu, staffed with 65 employees.

It has also set up a regional customer service center in Hong Kong, a logistics hub in Beijing, and a maintenance, repair and overhaul center in Shenzhen.

Boulnois says the company will bring its first full-flight simulator for pilot training to China soon.

For China's part, says Zhao of the Chinese Academy of Social Sciences, the country "needs to build more helipads and airports for private aircraft to take off and land, and these should also be able to provide proper maintenance for the aircraft".

Wang Chao contributed to this story.

[email protected]

(China Daily 11/30/2012 page19)

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