The CEO of NHV hopes the restoration of oil prices can help the beleaguered helicopter market “to a more sustainable situation”.
Steffen Bay, leader of the Belgium-headquartered outfit, spoke to Energy Voice as Brent Crude reached pre-pandemic levels of $61 last week.
He said the sector has been “under pressure” in light of the pandemic and low oil prices, with helicopter operators being “pushed down by the big majors” to provide savings.
NHV services the UK, its largest market, from a main base in Aberdeen and a new site in Blackpool.
“You see certain problems in financing helicopters and have had bankruptcies in our industry, major operators and also leasing companies,” he said.
“So there is an issue, there’s a lack of investment, and I would hope that if oil prices go back to pre-Covid levels, or to somewhat decent levels that we could improve our pricing a bit to get to a more sustainable situation.”
Of the four Aberdeen helicopter operators, Bristow and CHC have in recent years both gone into Chapter 11 bankruptcy in the US, and Babcock has repeatedly made claims of oil and gas “no longer being attractive”.
NHV, backed by private equity house Ardian, meanwhile has “rearranged timelines and debt” in its own restructuring last year.
Companies catering to oil firms’ calls for low pricing, even if it is unsustainable, has “hurt the whole industry”, Mr Bay said.
A lack of pricing discipline was called out last year when Babcock won work from CHC and NHV with French oil giant Total in the North Sea.
“You can tell if someone is bidding below cost”
Mr Bay said NHV “will not participate in the race to the bottom”, adding that helicopter firms “take a lot of risk” in proving an essential service.
“I think we deserve to make at least a correct margin, nothing outrageous, but a decent margin for our service.”
Looking globally, he added: “We know what the helicopter operating cost is, so you can tell if somebody is bidding below cost or even breakeven, you can tell.
“I think there’s a lot of players out there at the moment who play this game.
“There’s an end of the road somewhere. How much longer can you play this game just to keep your assets employed? If you don’t make a profit it will at some point end in a restructuring or going out of business.
“There are certain pockets in the industry where this is still happening. Less and less, but it is still happening.”
NHV has been in Aberdeen for six years now and has been growing steadily after “betting” on the H175, a lighter, newer, but also smaller, helicopter than the dominant S-92.
“The guys from Belgium with the yellow helicopters”
It has seen “double digit growth ever since”, now supported by a new base in Blackpool, and that has included during the pandemic, winning work with Neptune Energy for its Seagull project last year and a five-year extension with Ithaca Energy.
Mr Bay said: “We have been in Aberdeen now six or seven years, the UK is now our largest market. I think we were belittled in the beginning a little bit, you know ‘the guys from Belgium with the yellow helicopters’.
“Nobody really wanted us in Aberdeen so we had to use some different tactics to get a building close to the airport.
“I really like our operation in Aberdeen, I think it is a great single-aircraft operation. Very efficient. Every pilot can fly every aircraft, every mechanic can work on every aircraft, only one type of spare part supply.
“We have had double digit growth ever since we entered Aberdeen. At some point, the growth will flatten but, for now, we’re still growing strong in Aberdeen.”