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From The Desk of The Editor THE PERFECT STORM

The current helicopter industry economy reminds me of the movie The Perfect Storm. It’s based on a true tragedy in which atmospheric conditions perfectly collided and created a massive storm that hit North America in the fall of 1991. The storm killed the crew of the Andrea Gail, as well as rescuers from the U.S. Coast Guard.

Storm clouds also seem to be gathering in the helicopter market. Forecast models show an extended industry growth rate that stays fairly steady at around 3 percent. This is in part due to one of our biggest strengths— diversifi cation. With that partly sunny outlook, why am I sensing a coming storm? How is it that we suddenly have companies laying off thousands of people, certain sectors taking fi nancial butt-whippings, and one of the oldest OEMs on the brink of being sold?

I believe that back in the third quarter of 2014 a low- pressure system started forming. Sure there are some sunny spots out there, but the industry seems to have slipped into a trough for the moment. Our domestic slowdown stems partly from falling oil prices. In certain industries, lower oil prices provide economic benefi t. This is not as true in the helicopter industry. When demands for

oil drops, oil rigs are shut down and

exploration comes to a halt. As a result, big helicopter operators like PHI, Era, RLC, and Bristow fl y less. When aircraft are sitting on the ground with no work, pilots and mechanics are laid off .

Additionally, if idle aircraft are then put up for sale, this creates a surplus on the used aircraft market, which mean less new aircraft are purchased, thereby impacting the OEMs. Connecting the dots, it’s not hard to see a loose connection between falling oil prices and recent layoff s at helicopter operators and OEMs like Bell and Sikorsky.

The example of falling oil prices is not the only front on the radar. Foreign economies are lagging as well, including Europe. Even high-growth emerging markets like China and India have slowed, which is where many companies are looking for their next growth spurt. Helicopter tour operators feel this pinch, as tourists make up much of the helicopter business in Nevada and Hawaii. One large tour operator in Las Vegas indicated that although they were busy, Q1 this year was down from the previous year.

2 July 2015

On the military front, between declines in combat ops and sequestration eff orts in the U.S. government, many companies are not counting on growth from this sector. Additionally, there’s a full-scale assault on VA education benefi ts being used by veterans for helicopter fl ight training. Dozens of helicopter fl ight schools certifi ed to provide training to vets might be driven out of business by current legislation.

Our cover feature in this issue is Erickson Aviation. At 44 years old, the company is no stranger to economic cycles. In some ways, they are being impacted by the factors I mention. Yet, in true fashion innate to the helicopter industry, Erickson will continue to persevere, innovate, and reinvent itself until blue skies return with new opportunities.

Lyn Burks, Editor In Chief

Publisher Brig Bearden Editor-In-Chief Lyn Burks Account Executive Teri Rivas Layout Design David Matuskey Online Accounts Manager Lynnette Burks Copy Editor

Rick Weatherford Social Media Guru Laura Lentz

Subscription / Circulation Manager Pam Fulmer

Contributing Writers Rick Adams James Careless

Randy Mains Brad McNally

Steve Goldsworthy Tim Pruitt Caterina Hessler Matt Johnson

Randy Rowles Scott Skola

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