Pandemic Pounds New Helicopter Deliveries

Pandemic Pounds New Helicopter Deliveries

Civil new helicopter deliveries plunged during the first half of 2020 due to the pandemic, but financial results released this week indicate that the three leading helicopter OEMs were buoyed by increased military sales. 

Airbus Helicopters saw orders and revenues drop during the first six months, results its parent company largely attributed to the impact of Covid-19. Bookings for the period amounted to 75, down from 123 from the year-ago period, a 39 percent decline. The overall order book shrank by four percent from 697 to 666 units. Revenues declined by two percent, to $2.75 billion. However, EBIT (earnings before interest and taxes) rose by 23 percent to $179 million, which the company attributed to a more favorable delivery mix skewed toward military helicopters and increased services revenues.

Airbus noted two new EASA product certifications during the period: the five-bladed H145 D3 and the H160 intermediate twin. For the second quarter, revenues fell 17 percent from the year-ago period, to $1.54 billion, from $1.61 billion. Adjusted EBIT declined to $117 million, from 130 million, a drop of 10 percent. 

Separately, on Thursday Textron unit Bell and Italy’s Leonardo also reported results. Like Airbus, Bell reported fewer commercial deliveries for the quarter from the year-ago period, down to 27 from 53, largely due to dramatically lower deliveries of the model 505 light single and delivery difficulties attributed to pandemic travel restrictions. Bell’s military business however drove a 7 percent revenue increase to $822 million from $771 million and propelled profits to $118 million, a $15 million gain over second-quarter 2019.

Bell’s revenues and profits were also up for the first half of the year compared to the first half of 2019; first-half 2020 revenues rose 6.6 percent to $1.645 billion from $1.510 billion and profits increased to $233 million from $207 million. Order backlog stood at $5.8 billion. On the military side, Bell delivered 13 H-1 aircraft in the first half, up from 11 from the year-ago period, and eight V-22 tiltrotors, up from three last year. However, deliveries of civil models were down sharply in the first half compared to the same period last year: 17 Bell 505s as opposed to 48; 14 Model 407s compared to 21; and two 412s versus four in the first six months of 2019. Bell did increase its year-over-year deliveries of its 429 light twin, up one from the eight it handed over last year.

Scott Donnelly, CEO of Bell parent Textron, said the outlook for reduced deliveries of Bell’s 505 light single was a factor of the typical customer for that model, “a high-net-worth individual making a discretionary spend.” But Donnelly said he expected deliveries of the company’s other commercial models to be more stable as the dominant customer base for those trend toward parapublic and air ambulance customers. 

Leonardo Helicopters saw a 50 percent drop in first-half deliveries year-over-year. “For civil helicopters, demand will not get back to 2019 levels for some time,” said company CFO Alessandra Genco.

During the first six months of 2020 Leonardo delivered 30 helicopters, down from 61 from the same period last year. Deliveries of the AW139 intermediate twin fell from 26 to 14, the AW169 medium twin from 15 to three, the AW189 from four to two, and the AW109/119 family from eight to seven. For primarily military models including the AW159/Lynx, the NH90, and the AW101, deliveries remained nearly flat with the group accounting for six deliveries in the first half as opposed to eight over the same span last year.

Leonardo's first-half revenues fell 10.7 percent, to $2 billion, and were off 8.6 percent, to $1.17 billion, in the second quarter. Earnings before interest, taxes, and amortization (EBITA) fell by 30.5 percent, from $237 million in first-half 2019 to $164.5 million in the current period. However, orders spiked by 48 percent, to $3 billion in the first half, driven by military programs including the U.S. Navy’s TH-73A trainer. Leonardo Helicopters saw its percentage of military/government revenues increase from 72 to 74 percent in the first six months compared to a year ago.

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