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Despite the growing economic power - and despite an unparalleled growth in the number of High Net Worth Individuals (HNWIs) across the Middle East- India and Southeast Asia - business helicopter use has been slow to take off in the region.

AvBuyer   |   1st November 2011
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The tribulations of the helicopter within Developing Markets

Despite the growing economic power - and despite an unparalleled growth in the number of High Net Worth Individuals (HNWIs) across the Middle East- India and Southeast Asia - business helicopter use has been slow to take off in the region.

There are now more HNWIs in Asia than in Europe. The region is wealthy- and becoming wealthier- and is the number one market for luxury playthings and high-end business tools. The Middle East is not far behind. Yet- the use of business helicopters continues to lag the use of fixed-wing business aircraft- because there remain continuing obstacles to the growth of rotary-wing Business Aviation in the wider region.

Superficially- at least- this situation would seem to be counter-intuitive- since there is no shortage of exactly the customer-type who appreciates (and can afford) the convenience and flexibility of travel by private helicopter. The fact remains that across the region- from the Middle East to Japan- business helicopter use is less common than it is in Europe and the USA.

India/Southeast Asia
India has not been as badly affected by the global recession as many other nations- and economic growth and wealth creation continues apace. Business Aviation is rapidly gaining a toe-hold- as a new class of entrepreneur and business leader is increasingly seeing the business aircraft as an enabler- saving them valuable time and increasing productivity.

India’s civil aviation market is among the fastest growing in the world- but helicopter use remains very limited- and India currently has fewer civil helicopters on its register than Switzerland. Yet many industry forecasters make optimistic predictions of rapid future growth! In the light of such predictions- helicopter manufacturers are working to position themselves to best serve this growing market.

AgustaWestland- Eurocopter and Sikorsky (for example) are all working to establish joint ventures in India- hoping that local production will give them an edge as they compete to win orders. However- much of this growth will likely be driven by the burgeoning offshore oil and gas industry as major obstacles remain to Business Aviation growth.

Operations are constrained by a surfeit of bureaucracy and a shortfall in the required infrastructure. India is a land of onerous and complex regulation- and this can place major stumbling blocks in the way of Business Aviation (fixed- or rotarywing). For example- business aircraft require at least seven days’ advance notice in order to obtain the necessary permits to enter the country.

Though India has world-class international airports- there are relatively few well-equipped smaller regional and local airfields- let alone heliports and helipads. There is subsequently a real lack of full-service FBOs making maintenance- repair and support problematic- while Government (which has largely failed to recognize the potential value of Business Aviation) has so far done little to ease the burden of trivial regulation- and failed to impose and apply consistent standards for safety and training.

Taxation and regulation also inhibit the acquisition of aircraft by business organizations- with stringent import duties of up to 20 percent- and obstacles to the international transfer of money imposed by the Reserve Bank of India.

Similar obstacles are experienced elsewhere in Southeast Asia- with the additional complication that elsewhere the economic recession has tended to suppress orders - especially in the business/corporate sector. Only the government/military- homeland security- oil and gas and search and rescue segments are currently helping to keep the order-books ticking over.

Middle East
Double-digit economic growth in the Middle East over the past five years has led to an unparalleled growth in the number of HNWIs who ought to form a ready market for business helicopter use- just as they have already driven the development and rapid growth of an active Business Aviation sector in the region.

The number of registered business jets in the Middle East has grown by 30- 40% in recent years to an estimated total of about 500 across the region (about 6% of the global total). But while the number of business aircraft accurately reflects the number of HNWIs there- business helicopter use lags far behind.

There is a clear need for the kind of ‘airport-to-city-center’ and ‘city-centerto- neighbouring-city-center-(avoiding-theairport)’ travel that has driven the demand for business helicopters elsewhere around the globe: many of the region’s cities are plagued by severe road congestion- and many business journeys in the region are within easy helicopter range.

The skies over Abu Dhabi and Dubai theoretically should be thronged with business and corporate helicopters- but while there are some major helicopter operators in the region- corporate and business flying accounts for a fraction of their activity. Instead these companies mostly focus their activities on support for offshore oil and gas exploration/ exploitation- with a relatively small number of short-term- ad hoc contracts onshore.

In the UAE- HeliDubai goes against the usual pattern (to a degree) and is arguably the most business-focused of the major Gulf helicopter operators. Nevertheless- tourist flying remains at the core of its business. HeliDubai has- however- developed the new City Heliport (claimed to be the first dedicated heliport in the UAE) at the heart of the new Dubai financial district - and it also plans to open new heliports on the Bur Dubai and Deira sides of the Creek.

There is some VIP helicopter flying in the region- but it remains largely the preserve of local royalty and senior military officers.

Problems of congestion- airspace capacity/restricted airspace and a lack of regional co-ordination further exacerbate the issues for business helicopters. In the UAE- for example- half of the national airspace is set aside for military use- including a large restricted area to the south of Abu Dhabi. Commercial traffic is thereby concentrated in the northern half of the UAE- where ATC limitations further restrict capacity and traffic flow.

In Qatar- Gulf Helicopters’ Air Operators’ Certificate only permits offshore operations. Separate permissions are required for all onshore flights. Nor is there much immediate prospect of any significant change- though the existing helicopter operators in the region badly need to diversify.

This is especially so in the wake of the global recession that has had a significant impact on the oil and gas industry. Yet- rather than turning to business and corporate operations- those operators who are working hard to find new work for their helicopters are looking at other means of achieving growth.

Qatar’s Gulf Helicopters is already operating in East Timor and India (as well as in Libya- Oman- Saudi Arabia and Yemen) and is pursuing offshore oil and gas opportunities in both Italy and the UK.

Such diversification is a matter of necessity to the region’s established helicopter operators- since there is little official appetite for the kind of change that would be needed to facilitate private and corporate helicopter flying. Instead- priority is given to the needs of the big airlines and freight carriers- and the needs of business helicopter users are still not being considered.

Existing users of VIP helicopters guard the privilege of being able to make direct helicopter flights outside established airports- and have the power and influence to be able to prevent wider access to such flying. Thus major obstacles still have to be overcome before the helicopter can become anything like as important a business tool in the Middle East- India and parts of Southeast Asia as it already is in the rest of the world.

Yet- such obstacles will be overcome - and manufacturers- brokers and financiers all believe that the Middle East and Asian regions will be the fastest growing business helicopter markets in the foreseeable future.

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