UK Helicopter Market Vs. Brexit

The U.K. helicopter charter market is overwhelmingly — up to 90 percent — an export industry, according to Simon Mitchell of Starspeed, part of Luxaviation Group and Luxaviation Helicopters Charter Alliance.

“We have fifty years of experience in the North Sea, in SAR, air ambulance and the police,” he says. “We have the ability and expertise in our pilots, maintenance organisations and support systems and we are servicing markets in sixty countries and growing.”

However, the European and U.K. helicopter markets have been affected both by politics and finance in recent years. Brexit, with the potential decreased freedom of movement through Europe and disentanglement of the aviation services, instability in the oil-and-gas market and CHC and Waypoint Leasing falling into Chapter 11 have given the whole industry reason to ponder its future.

“The government needs to realise the value of this industry before it is too late,” said Mitchell of Starspeed. “There is pressure on small airfields, VAT is a disincentive to training in the UK and Europe and we need more government incentives, such as tax breaks for investors.”

Starspeed joined Luxaviation in 2017, shortly after the 2017 U.K. vote to leave Europe. Charlotte Pedersen, chief executive of Luxembourg-based Luxaviation, explains that the timing was coincidental but is nonetheless a fortuitous situation for Starspeed, offering some protection from Brexit.

Certainly, the decreased revenue of the oil-and-gas companies after 2015, combined with a series of accidents, led to a rethinking in that segment of the helicopter industry. The setting up of HeliOffshore in 2014 has led to many physical changes in O&G helicopters and an improved safety culture, but has also added to a leaner market with longer-range helicopters.

Between 2013 and 2015, helicopter leasing company Waypoint had a 94 to 100 percent take-up of their machines. By 2017, Waypoint had 22 percent of its helicopters parked and was taken over two years later by Australian company Macquarie Rotorcraft Leasing.

Political and financial changes have also affected Europe’s search-and-rescue segment. U.K. SAR has been run by Bristow Helicopters since 2015, and now with the possibility of the U.K. being unable to agree on a deal on how to leave the EU, the Maritime and Coastguard Agency has been amending notices and working with affected parties to minimize the implications of whichever exit route the U.K. chooses to take.

Government changes and tighter budgets have also affected the U.K. police force. The airborne police were centralised into the National Police Air Service (NPAS) in 2012. In November 2017, a government watchdog issued a damning report on the state of NPAS, which was created to cut government costs and did that by reducing policing and aviation services. Recommendations included greater flexibility, better communication and allowing the services to take advantage of new technology.

Drones are sometimes thought of as a potential threat to the helicopter industry, however in 2016, the police in Baden-Wurttemberg started a statewide project to test UAVs, and this, as reported by Martin Landgraf, acting head of the Police Helicopter Unit, has attained “a high degree of acceptance and appreciation.”

Firefighters have also been using drones in the last few years and a fire detection drone was used in the Notre Dame fire in Paris. Although drones currently have the drawback of short battery life and small carrying capacity, the combination of drones and helicopters could be used to enhance the helicopter market and reduce costs.

European helicopter EMS vary as to whether the service is government or private, but in the U.K., helicopter ambulance services are run by charities and trusts with money raised from the general public, which gives locals a voice in how their service is run. The European HEMS and Air Ambulance Committee reports over 380 HEMS operating bases in Europe and 200,000 HEMS missions flown a year.

The biggest helicopter market in Western Europe is the UK, with 1,176 helicopters. As the world’s fifth largest economy this may seem natural, but the country’s dominant posture in the rotorcraft market may not continue if Brexit destroys the U.K.’s position in Europe and the government doesn’t appreciate its value.