Aero Asset, a Canadian Helicopter brokerage firm, said in its half-year helicopter market trends report this week that a dwindling supply of used single-engine turbine helicopter inventory also caused sales volume to shrink.
Lower Sales Due to Lower Inventory
Aero Asset tracked retail sales of select helicopter models for purchase by Airbus, Bell, and Leonardo. It said the 106 units sold collectively during the year’s first half, worth $200 million, was down 10 percent compared to the same period in 2021. Moreover, 65 percent fewer aircraft were available this year. The supply market is so tight that Aero Asset says the outstanding sales inventory could be exhausted in three and a-half months. For instance, during the second quarter, of the units it tracked, only 64 aircraft worth $135 million were available for sale, according to the report.
To be clear, Aero Asset defines retail sales as the number of used aircraft sold to end users, on and off the market. That number doesn’t include new aircraft, leases, sales and leasebacks, internal transactions, early buy-outs, government sales, or sales for parts.
Here’s What Buyers Want
With North American buyers accounting for two-thirds of all the transactions during the period, the company said the most traded helicopters were the Airbus AS350 B3/B3e/H125 variant, followed by the Bell 407/GX/P/I, and the Airbus EC130 B4/H130. Per the report, the absorption rate, or the time it would take to sell all the available inventory for those aircraft, was merely 90 days, which means there are very few helicopters to go around, and people are finding it harder to find the one they want. In a helicopter Investor Town Hall earlier this week, Will Sturm, Aero Asset’s vice president of sales, attributed the demand to first-time buyers. However, the supply of available EMS helicopters fell to a historic low, and the inventory for helicopters in a utility configuration decreased by 75 percent compared to the same time in 2021. Sturm said the economy’s rebound meant finding utility helicopters for things such as aerial work was challenging. The helicopter that has been the hardest to sell during the first half was the high-performance Leonardo AW119K/Ke/Kx, which the firm said is taking up to 10 months for sellers to find a buyer.
European Market Disrupted by Crisis
With the disruption following in the wake of the Russia-Ukraine war, European sales decreased by 50 percent year over year, though Europe accounts for nearly 40 percent of overall inventory available for purchase. Looking ahead to the year’s second half, Sturm said he expected demand for turbine helicopters to remain strong as buyers look to leverage the bonus depreciation tax break. Presently, bonus depreciation allows businesses to immediately deduct up to 100 percent of the purchase price of eligible assets. Sturm said the ongoing energy crisis could affect prices and inventory in Europe.
