Boom in helicopter leasing is good news for medevac industry
Friday, August 22, 2014
The stampede to cash in on the burgeoning deepwater offshore energy market has spawned a series of helicopter-leasing companies with billions of capital to invest. Initially the deals were for just large and medium helicopters servicing the oil and gas industry, but it now looks like some of these companies are making serious efforts to penetrate the medevac and parapublic markets — and that could be good news, especially for smaller players in the industry.
Companies such as Waypoint Leasing are moving into the light-twin space, recently announcing a deal to acquire 25 Airbus EC145T2s. Waypoint and other helicopter companies are growing like Georgia kudzu and are being backed by some smart money, including institutional investors such as Goldman Sachs. From its formation in 2013 through this May, Waypoint had acquired a portfolio of 37 helicopters worth $400 million and placed all of them.
Helicopter manufacturers like leasing. Leasing companies often make large buys, bringing added demand predictability to the assembly line, especially in uncertain economic times. The leasing companies usually get a volume discount that shows up on their bottom line. They also often are in the enviable position of monopolizing a manufacturer's output during economic boom times.
Leasing and safety intersect on several fronts. In many cases, leasing allows operators to free up capital that would otherwise be tied up in accumulated equity in the helicopters to grow or improve their businesses. It also allows them to operate a newer fleet with all the modern safety advances and turn that fleet over on an accelerated basis.
Leased helicopters also are less likely to suffer from neglectful maintenance as lease covenants frequently contain requirements that helicopters and engines be enrolled in flight-hour maintenance plans either independently or as an added cost right on the lease. This protects the residual value of the helicopter for the leasing company, but it also makes it less likely that the ship will suffer a catastrophic failure related to skipped or incomplete maintenance.
Waypoint, for example, recently inked a deal with helicopter engine-maker Turbomeca to provide engine support services to Waypoint's current and future customer base, including operators using Turbomeca's Makila 2A and 2A1 engines and Arriel 1S1 and 2S2 engines. The deal includes Turbomeca's monitoring of the engines and providing recommendations to operators "to improve engine reliability and performance."
That's good news for the crews and patients who fly in leased helicopters.
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