Airbus Sees Strong Market for HEMS Twins

The stampede to single-engine helicopter air ambulances is likely coming to an end in the U.S., according to Chris Emerson, president of Airbus Helicopters Inc., Airbus Helicopters’ North American arm. “I think you are going to see a pickup on the twins,” Emerson said, citing his company’s own recent sales experience into the air medical market. “Over the last four years in air medical we have sold more twins than singles,” including several large twin orders in the last few years as more operators transition to IFR programs. “They’re all buying twins,” he said.

Emerson said changes in the air medical industry and the growing physical size of patients was leading to a pickup in demand for larger, twin-engine ships. “The needs of the population are changing. The demographics are such that helicopters need to do more. The famous air medical golden hour has given way with the need to get the emergent care on board immediately. It’s getting the equipment and the medical know-how on the helicopter to provide the service immediately, not in the golden hour. An H145 is now a flying hospital.”

Emerson also noted the change in basing models. “There’s a lot more interest in hospital-based models. When you are linked up with a hospital-based system that air transportation cost is a fraction of the entire health care bill that patient is getting. It’s not separated. You’re seeing that where it makes sense in urban environments. Four years ago I had a HEMS customer tell me that the twin-engine market was dead. Today that same customer is buying twins. Why? Because with a twin you can fly neo-natal isolettes and supplement on-scene rescues with more comprehensive service in the helicopter.”

He also said that patients are physically simply getting larger and “we need to adapt to that.”

That is not to say that single-engine helicopter air ambulances are going away, Emerson said, but you will be more likely to find them in rural settings. “You will always have on-scene, rural, community-based programs that service populations that are not near trauma centers. Otherwise, you’re in an ambulance forever or at a basic hospital that can’t deal with you.”

But a key reason for selecting a twin to service an urban program, aside from cabin size, is the one engine inoperative (OEI) capability, Emerson said. “If you are in an urban environment, what does your one engine inoperative environment look like? When you get into an urban environment you want OEI performance so that the pilot doesn’t feel it.”

The need for speed and OEI margins is driving interest in the new Airbus H160 medium twin from select air ambulance operators, Emerson said. He thinks the H160 will do well in the high-end air medical market, particularly hospital-based programs with strong transplant programs where the 155-knot speed and range of the H160 will make it an effective hospital-to-hospital solution compared to employing fixed-wing assets. “We’re in talks with several leading programs on the H160,” he said.

Emerson thinks the air medical market is on the upswing. “Today there is a general optimism around growth again,” he said, noting that Airbus has “enjoyed the most multi-ship sales over the last four years into air medical.” But the growth is likely to be measured, characterized more by incremental fleet replacement and strategic base growth as opposed to the large net fleet growth of decades past.

However, Emerson thinks the overall U.S. helicopter market is poised for healthy growth thanks to thinning used inventories and more generous bonus depreciation under the new tax law. “This is the strongest we’ve entered a fourth quarter since I’ve been here—four years. We’re going to hit our annual targets this year before the end of October, which is unreal. It’s a good sign. We’ll continue to see a strong push to the end of the year.

“The impact of the accelerated depreciation and expansion to used aircraft has benefited the market to the extent that you cannot find a good quality used H125 or H145 with less than 8,000 or 9,000 hours because they have all been bought up this year because of that accelerated depreciation being applicable to used aircraft. That’s great for our new business. I think we’ll see a big push at the end of this year and we need to be ready for it. Last year we had 72 percent of the new order market share. Today we are sitting at 70 percent and we should be 70 or plus this year.”

 

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