Waypoint Newsletter – March 2017From Waypoint Leasing to Our Valued Customers
Helicopter Values: What is it Worth?
by Marc Schechter, Vice President of Risk and Analytics
When many of us invested in helicopters, we did so on the basis that these were long-lived assets that held their value remarkably well. Indeed, we could point to helicopters over 50 years of age that were still widely found in commercial use, and to numerous examples of helicopters selling for more than what they were bought for after decades in service. Those of us that did our research found that by and large, after 20 years in operation, the best industrial-use helicopters could be expected to hold 70 to 90 percent of their initial value when resold.
It was with this information in their pockets that operating lessors sprung up, seeking to purchase as many medium and heavy helicopters as they could handle. These machines, highly-sought for use in the increasingly challenging offshore oil and gas markets around the world, would surely represent the latest generation of helicopters whose values would not decline, and hopefully would increase.
4Q 2016 Earnings Summary for International Oil Companies (IOCs) & Outlook
Revenue trends higher for past four quarters – With production levels remaining flat, revenue for the 11 selected IOCs is being driven higher by oil and gas prices which rebounded from lows in 1Q 2016. Looking ahead, some of the IOCs are touting increasing production in coming quarters due to short cycle investments. The question is if this will be enough. “We have about $450B of investment in upstream (this year). This is about 25% below where it needs to be to meet demand growth and compensate for declines in existing fields,” – Fatih Birol, Executive Director, International Energy Agency (IEA), March 7, 2016.
IOCs to remain prudent with CAPEX increases – With the increase in CAPEX for 4Q 2016 ending a downward trend, the IOCs will remain prudent with their investment dollars. Debt to equity ratio has climbed from 38% in 2013 to 55% in 2016 while total debt climbed from $329B to $426B (+29%). Demonstrating financial discipline to shareholders, the IOCs have been publicizing cost savings generated in 2016 and new lower breakeven costs for projects in the pipeline. Some of the savings goals set for 2016 were exceeded and new goals have been set for 2017.
Waypoint Medium Utility Helicopter (MUH)
Re-purposed AW139 with Enhanced Performance and Flexibility to meet the demands of Utility Market Segments
Waypoint Leasing, in technical partnership with Eagle, introduces a utility configured AW139 to meet the modern demands of operators across a range of utility missions to include firefighting, light EMS/SAR, mining, powerline support, and general aerial work and transportation services. Utilizing the short-nose AW139 platform, the Waypoint MUH offers significant empty weight reduction with enhanced performance characteristics while leveraging the latest avionics and safety systems inherent in the AW139 aircraft.
With provisions for key equipment like hoist and cargo hook installed, and with the ability to add additional utility equipment like searchlights, tactical radios, and a wire strike safety kit, the MUH is a modular and flexible platform ideally suited for the high demands of utility customers.
March Press Release Highlights
Waypoint Leasing Places Two H135s with Mackay Helicopters
Waypoint Leasing (Ireland) Limited announced March 1, 2017 that it will deliver two Airbus Helicopters H135s from its order book on lease to Mackay Helicopters Pty Ltd (“Mackay”), a leading Australian helicopter operator. Waypoint’s H135s will operate out of Mackay’s North Queensland Base on specialist helicopter marine pilot transfer operations.
Waypoint Leasing Enters Chinese Market with Multiple Helicopter Lease Agreements
Waypoint Leasing (Ireland) Limited announced March 7, 2017, that it has entered into a lease agreement with Shanghai Skyway General Aviation Company (“Skyway”), a provider of helicopter transportation and related support services in China, for one new Airbus H135 helicopter, which will be used for emergency medical services. Separately, Waypoint announced that it has agreed to lease an Airbus AS350B3 helicopter from its existing fleet to another operator in China.
Waypoint Leasing Places AW139 on Lease to PT. Air Born Indonesia
Waypoint Leasing (Ireland) Limited announced March 8, 2017, that it has closed a lease agreement with PT. Air Born Indonesia (“Air Born”), a provider of air transportation services in Indonesia, for one Leonardo AW139 helicopter previously operated by CHC, which will go on long-term lease in support of mining operations in Indonesia. Waypoint currently has 22 aircraft on lease to utility operators globally.
Waypoint Leasing to bolster fleet with 16 new Airbus helicopters
Airbus Helicopters and Waypoint Leasing (Ireland) Limited, announced March 9, 2017 that Waypoint has committed to acquiring an additional 16 Airbus rotorcraft, adding to their fleet of more than 140 aircraft, 45 of which are manufactured by Airbus Helicopters. The agreement, for more than € 100 million, covers the purchase of 16 aircraft including supplementary H135s and H145s and adding the H175 for the first time to Waypoint’s fleet. Waypoint will primarily lease the H135s and H145s to operators performing EMS and utility missions worldwide, while the H175 will be available for oil and gas, search and rescue and public service missions. Prior to the announcement, Waypoint had firm commitments for 26 H135s and H145 from Airbus.