Author’s introduction. This is the end of our three-part series designed to assist new auditors and consultants in understanding the nature of the helicopter industry and associated business opportunities. Previously, we examined the exciting growth of the Australian helicopter industry and the steady growth in New Zealand. In this article we will identify opportunities now existing in our region and beyond. For example, the release of China’s low level air space to allow the development of general aviation has enormous potential for international aviation consultants and auditors.
In April 2012, the world’s civilian helicopter fleet was estimated at 22,000, of which 13,500 were based in the USA. Australia ranks sixth in the world with about 2,000. Over the past six years we have seen strong growth in the twin engine fleet in the region. There are now more than 210 twins in Australia. The growth of the twin fleet in Australia (21% pa) is nearly three times faster than the single engine rate, which is now at 8%. This market is being driven by SAR and HEMS orders. Recently more corporate buyers have appeared. Across the Tasman, New Zealand managed to take 10th place on the global listings. NZ has 790 helicopters of which 51 are twins (6%). The Australian and New Zealand aviation registers now have more twins than the military forces in our region.
Every week in Australia the CASA register increases by four helicopters
One twin is added every three weeks!
New Zealand’s growth has slowed to one new helicopter every two weeks
The insistence by the general public to have the protection of an aeromedical industry has been the driving current expansion. Recently, key players in the mining resources boom are demanding additional aeromedical coverage. Therefore, the expansion of the heavy segment will soon produce a shortage of aircrew. It is easy to overlook the fact we lack qualified and capable managers to oversee the accident prevention requirements flowing from client requirements as a result of a long history of fatal accidents.
As a result, more work will be generated for external consultants and auditors. They will have to meet the requirements of both the regulator and the client. At present, the client is usually more stringent than the regulator. This is the result of a typical operator being an offshoot of an international company which has to comply with the tougher rules in existing in other areas of the world.
New service providers will be required to educate aviation managers and technical specialists, and also to provide auditors who can be effective as this expansion takes place. As a rule of thumb the accident rate is more than twice that of an aeroplane equivalent. Typically, the chain of events resulting in a catastrophic accident are often tracked back to senior management and the inability their of line supervisors to ensure the company is operating safely.
As an aside, the consultancy and auditing service provider must have a very up-to-date internal training process to ensure their people are able to evaluate heavy helicopter company operations and provide effective feedback.
A common fault with the present system is the operator can boast about a “clean audit report” received from an external auditor, not realising dangers of poorly trained auditors. This deficiency soon becomes apparent when they fail a CASA audit. In some cases, their AOC (and insurance) is in danger of being cancelled. Of course, the auditing firm then gets a bad name due to ineffective auditors not understanding the work involved. The firm overcoming this problem would have a marked advantage in this new market sector.
CASA’s pending introduction of a safety management system is providing an opportunity for service industries. It could be assumed consultants and compliance auditors will have a significant role to play in the coming decade. The regulator has clearly indicated safety management systems will become compulsory for all – not just the larger companies.
The clients in the resources industry and their insurance companies will take every opportunity to raise the bar to ensure compliance standards are understood and carried out in the way they were designed as an accident prevention tool.
Today, the helicopter industry is struggling at present to find suitable chief pilots, even for small companies. It would appear pilots are a avoiding these positions due to an alleged failure rate of 80% for applicants at CASA interviews. Industry sources indicate an attempt is being made to develop a chief pilot’s course to be accredited by CASA and thus avoid the enormous wastage of resources by both the applicant and CASA!
Regional opportunities, in brief:
Australia. There are three major challenges. Firstly; provision of suitable SMS training for managers and chief pilots in the new protocols. Secondly; supervisors must be able to implement the new safety management system. Thirdly, upgrading skills of aviation auditors in be both effective educators and auditors in the heavy helicopter fleet.
Papua New Guinea. It is believed PNG has 200 helicopters. They use the New Zealand regulatory model, which a lot simpler than the CASA model. Due to the prevailing expansion of energy and resource exploration operations, they are undergoing significant changes within their country. It is believed training and auditing requirements will be in demand as more international investors come on to the scene.
Malaysia. At present the helicopter fleet is probably around 100 helicopters. They follow the US FAA rules. Some helicopters owners in Singapore base their machines in Malaysia.
Thailand. Approximately 100 helicopters are based in Thailand, many of which are involved with offshore operations involving overseas operators. The Thais have not really overcome all of the recent international financial setbacks. The widespread use of English, and a less restricted economy should lead to positive growth for the helicopter industry. It was noted during the Heli-Asia 2004 Conference at Bangkok, access to civilian consultants and auditors was difficult. It appeared ex-military people were being used in this role.
India. It is somewhat of a surprise to note India has less than 300 helicopters despite the enormous population of their country. They have an advantage as their skilled people can usually speak English. Often they compare themselves to China, which has only half the number of helicopters than in India. Bureaucratic processes at times seem to strangling new ventures. Despite this, the local industry is attempting to manufacture helicopters and will probably develop their industry to a point where it exceeds the Australian numbers within two decades. There is a great opportunity to establish a service facility which specialises in the Indian helicopter industry.
China. A tourist involved in a traffic accident whilst travelling in China may be surprised to find a helicopter aeromedical system does not yet exist in the world’s second largest economy. If the same person came to grief in Europe then they would probably be assisted by one of 360 helicopter rescue bases in that region. China’s lack of a helicopter emergency service industry has been somewhat of a puzzle to the international SAR and HEMS community.
It could be said the development of general aviation in China has been suffocated by the reluctance of the People’s Liberation Army Air Force to release airspace for private and commercial purposes. Airlines appear to only have access to a third of China’s airspace. Private and commercial general aviation operators are almost totally excluded. China recently became the second largest economy in the world, pushing Japan back to third place. Although the United States still retains first place, economists suggest China will take the lead by 2020.
As a result, in November of 2010, China’s State Council and Central Military Commission jointly released a circular announcing the decision to intensify the reform of China’s low altitude airspace, the new policy covering major cities including Changchun, Chengdu, Guangzhou, Lanzhou, Jinan, and Nanjing. The low altitude air-space will be gradually expanded in more areas and finally cover the whole country by 2015. China’s CAAC follows the US FAA regulations, which makes it easier for international auditors
Chinese business leaders agree the new policy represents a lucrative opportunity to exploit China’s huge general aviation market potential. In particular, the opportunities to develop a SAR and HEMS industry with international help are enormous. Currently, international air rescue authorities are coming forward to assist China. These include European Air Medical Institute (EURAMI), Association of Air Medical Services (AAMS – USA) and European HEMS and Air Ambulance Committee (EHAC). The latter represents 360 helicopter rescue bases in Europe.
Australian view point: A speaker at Australia’s Rotor Tech 2006 stated China has so few civilian helicopters; that their concept of expanding their GA industry to include a large number of multi-engine IFR HEMS helicopters is really not achievable in the short term, without extensive assistance from international logistic and training providers. Sourcing and training of Chinese general aviation managers, pilots, aircrew, engineers, safety specialists and educators will create challengers for several decades.
In conclusion, the speaker stated. “One solution for China, due to our location, is to use training resources in Australia and New Zealand”.
Food for thought?