New Markets

The region’s helicopter market has long been confined to offshore workers, humanitarian flights and royalty. However, the growth of tourism to Dubai, especially, is opening up new opportunities in the sector.

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By  Neil Denslow Published  December 5, 2004

|~||~||~|Oilrig workers and royalty have long had a near-monopoly on the use of civilian helicopters in the Gulf, but this is beginning to change. Especially within Dubai, there is a growing groundswell that could see the development of a fleet of smaller helicopters serving the tourism and executive travel market. At present, the major role for helicopters in the Gulf is to ferry people to and from offshore oilrigs. The market is divided up between three companies, Abu Dhabi Aviation, Dubai’s Aerogulf Services and Gulf Helicopters in Qatar, which serve the oilfields surrounding their bases. The three have all long flown Bell helicopters, mainly 412s and 212s, and they are certainly profitable and busy. ADA, for instance, has 34 helicopters, and flies 38,800 hours annually, which is an average of over 100 hours per day. It also reported a 14% rise in profits to US $11.5 million for the first nine months of the year, on revenues of $58 million. These operators are also a source of regular orders for Bell, as they are seemingly immune from the impacts of geopolitical events in the region. “There is a steady growth in terms of the commercial market,” says Alan Parsons, vice president, aircraft sales, helicopter group, for Hawker Pacific, which represents Bell Helicopters in the local market. “It also seems to be a natural growth, as there have not been any long term stoppages.” “Over the last 10 years or so we have averaged around four [medium-sided] sales a year… and when you consider that we are selling a product that lasts 25 years, that is not bad,” he adds. “I do not see it changing very much, but I do see continued steady growth.” New sales are heavily reliant on the development of the oil industry, as helicopters are bought when new fields are opened or when existing fields grow big enough to need their own aircraft. However, this seems secure given the current high price of oil, which is driving further investment and exploration. “There are plans to explore other areas and put in new oilrigs, and when that happens there is generally a need for new equipment,” comments Parsons. New offshore opportunities in the region are also likely to emerge once oil exploration begins in Iraqi waters, as well as in Iranian oilfields. “Libya is also likely to be an opportunity now that has better relationships with the West,” adds Parsons. However, while the offshore market promises to provide a steady and continued flow of orders, the largely immature onshore market also promises much greater opportunities in the future. This is because of the emerging tourism and VIP market in the Gulf, especially Dubai, and also because of the rebuilding work going on in the wider and wilder parts of the region, such as Iraq and Afghanistan. “At the moment, there is a much bigger onshore market in other parts of the region rather than the UAE,” says Nigel Moore, general manager, Air Charter International, which has organised the chartering of helicopters currently flying in countries like Iraq, Afghanistan and Sudan. “There are obvious requirements for helicopters there, whether it be elections in Afghanistan, moving people safely in Iraq or work for aid organisation,” he adds. ||**|||~||~||~|The tourism and VIP market in the Gulf, however, is yet to take off, although it is beginning to. Dubai, in particular, promises to be the centre of this market because of the emirate’s booming commerce, including now year-round tourism. Increasing numbers of people are visiting Dubai on holiday or corporate junkets, and they are generating potential business for helicopter operators, whether it be sightseeing flights or carrying golfers to the fairways. “In the summer, the tourist market used to just disappear, but now the occupancy rates for the hotels are pretty much the same winter and summer,” notes Parsons. “Now, anyone looking to operate a corporate helicopter… is not looking at a seasonal income, but at a yearly income, which makes buying an aircraft possible.” A number of start-ups are looking at this possibility, and Aerogulf Services, currently the only commercial helicopter operator in Dubai, is already benefiting from it. The company grew up serving the offshore market, but it now flies an increasingly significant number of onshore flights, taking up tourists on sightseeing trips or TV and film crews. “During the busy times of the year, we can be out pretty much all day doing these flights,” says Capt. Robert Denehy, assistant general manager, Aerogulf Services. Unless the company has an exceptionally large booking, these flights are operated with a Bell Jetranger, which hold four people plus the pilot. However, Aerogulf is set to take on more aircraft to serve this market. “We are looking to expand the fleet, either getting into long-rangers or 407s, which are the next step up from the 206, to do tourism and photograph flights,” says Denehy. Alongside the tourism market though, there is also a big potential for VIP and executive helicopter traffic in Dubai. Presently, there are no VIP helicopters available for charter in the region, and the only private owners are the royal families. However, helicopters could be a valuable addition to charter operators’ fleets, as they can fly executives from their jets at the airport to where they actually want to go. “The person who owns a corporate jet would love to go range in comfort from point to point, but wherever he lands he has to get into a limo to get to another location. This is what a helicopter can do instead,” explains Mike Creed, aircraft sales director at Harrods Aviation, which represents Sikorsky in the UK & Ireland. “On the ground it might take a couple of hours to get where you want to go, but in the air it might be just 15 minutes.” The grandiose construction projects in Dubai, such as the Palm Islands and the World, are also set to trigger demand for helicopter flights. The high net worth individuals living there will have the means and need for helicopter flights, whether they be chartered flights or a shuttle-type service. This is especially true of the World, which is located 4 km offshore, as access will only be possible by boat or helicopter. “There is definitely going to be a localised growth in [Dubai’s] corporate air travel,” says Parsons. “Once the first Palm Island is finished, demand on the VIP side will really increase dramatically,” agrees Aerogulf’s Denehy. “We are looking at a new aircraft right now, which will be a VIP type, although it is going to be a year before demand really skyrockets.” Manufacturers are particularly touting tourist-type helicopters for this market, so that the flight to World will be an experience rather than just a means of getting from A to B. Eurocopter’s EC130 BA, for instance, has been built for sightseeing flights, as its wide cockpit gives all seven passengers a clear view of the outside world. “What would people travelling to the World prefer,” asks Jens Siebrecht, regional sales director, Gulf Countries, Eurocopter. “Being stuck inside a big aircraft where they cannot see anything or one with a good view, where the islands emerge in front of them just like in a movie?”||**|||~||~||~|Greater chartering opportunities driven by the World, coupled with Dubai’s rapidly worsening road congestion and growing status as a business hub, may also drive up interest among private owners in VIP helicopters. This market is presently non-existent, outside of royalty, but vendors and their agents believe it is ready to take off. Hawker Pacific is already planning a greater focus on this market, and others, such as Harrods/Sikorsky and Eurocopter, are hoping to use this month’s Dubai HeliShow as a springboard for entering into the region. “There is a market as Middle East clients are well versed in the use of corporate jets and helicopters, but nobody has really attacked the it in an aggressive marketing way,” says Creed. “We are very much in that [VIP helicopter] market in Europe with charter and sales, and we really do want to get in the Middle East as well.” “The EC130 has not been introduced into the region yet, as the [VIP and tourism] market has not been there,” adds Siebrecht. “Now, with the growth of Dubai, there is market for this aircraft.” However, while there is clear potential in the local market, it could well be frustrated by regulations and by a lack of suitable helipads. In terms of gaining clearance for onshore flights, the local market is someway behind other parts of the world, with the region’s airspace much more restricted and bureaucratically bound. “It’s not a case of just jumping in a helicopter and go flying in the Middle East,” notes Creed. “In the UK, you can get into an aircraft fly from garden to garden, without any problems, and that is what we want to see in the Middle East as well,” he adds. The issue of helipads is also critical, as while there may be a demand for flights, it will remain unfulfilled if there is nowhere for helicopters to land and take off aside from the airport. “This is one thing that needs to be addressed,” says Parsons. “There needs to be more helipads [in Dubai], so you can get away from the airport.” At present, many of the major hotels in Dubai have rooftop helipads, but these are often restricted to just emergency flights. They are also often badly designed with walls surrounding them, for instance, or antennas obstructing the landing areas. “The problem is a lot of people have built helipads up there without talking to the operators, and without looking at documents like ICAO Annex 14 Part II and Cap 437 from [the UK’s] CAA, which gives you guidance on setting up safe helipads,” comments Denehy. “Some of them have walls around them, for instance, and if anyone was dumb enough to try to land on top of one, they would hit the tail rotor.” However, the UAE GCAA is seemingly alert to the issue, and it is now inspecting all helipads in the country to ensure they do comply with the appropriate safety standards. “There are a lot of problems at the moment, but the government is going through and checking all the helipads one by one, which is good news,” says Denehy.||**||

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