Helicopter makers woo oil sector with speed and comfort

Thu Jun 20, 2013 1:46pm EDT
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By Maria Sheahan

PARIS (Reuters) - Companies like Eurocopter EAD.PA and Sikorsky are making their helicopters faster, bigger and more comfortable to attract more customers from the offshore oil and gas industry to generate sales as military budgets shrink.

Oil companies already use helicopters to ferry workers to and from offshore rigs. These choppers may rack up 1,500 hours of flight time every year, much more than corporate or even military equivalents.

More than 62 million passengers flew to and from offshore installations in the British North Sea by helicopter between 1976 and 2012, according to the UK's Civil Aviation Authority.

Demand is likely to increase, with JP Morgan estimating investments in offshore oil drilling will grow by just over 8 percent a year on average through 2020. Mining operations also use helicopters extensively to reach sites.

"The oil and gas market is really where the opportunity seems to be right now," said Jean Lydon-Rodgers, president of GE Aviation's (GE.N: Quote) military business.

In 2011, 70 percent of GE's rotorcraft engine sales were to U.S. and foreign military forces. By 2016, that figure will shrink to only 30 percent, with commercial uses and especially the oil and gas sector accounting for the rest.

"You're going to see this enormous shift," she said, adding overall sales would remain stable at about 800 engines a year.

Oil majors like BP (BP.L: Quote) spend tens of millions of pounds on helicopter flights every year, which they rent from operators such as Bond Offshore or Bristow at prices around 4,000 pounds ($6,270) to 4,500 pounds per hour.   Continued...

Eurocopter Tiger H61 helicopters take part in a flying display, during the 50th Paris Air Show, at the Le Bourget airport near Paris, June 20, 2013. REUTERS/Pascal Rossignol