Turbine Helicopter Inventories Leveling Out, UBS Says
Inventories of used turbine helicopters have been building since the middle of last year, “but now appear to be stabilizing, albeit at record-high levels,” UBS Investment Research noted in its first turbine helicopter inventory report. According to UBS aerospace/aviation analyst David Strauss, about 1,010 helicopters were on the market at the end of last month, including 974 used models and 36 new delivery positions. This number was roughly unchanged from May, but still more than double prior-year levels. Listings of helicopters less than 10 years old rose 2 percent last month and are now nearly three times year-ago levels when accounting for new delivery positions. Despite high inventory levels, pricing has held up relatively well in most models, UBS said. “We estimate average asking pricing in the small and midsize markets is down roughly 10 to 15 percent from peak levels in 2008,” Strauss wrote, “while pricing in the large-cabin markets is down 4 to 5 percent from the peak, with the largest civil helicopter models such as the S-92 and Super Puma still very hard to come by in the secondary market.” UBS said it expects difficult financing conditions and weak corporate demand to pressure the commercial backlogs at manufacturers, although some such as Bell and Sikorsky could just shift production capacity toward military platforms, for which demand remains strong.