Not knowing what to expect, but excited nonetheless (particularly in light of the industry’s current predicament caused by the surge in low oil prices), we attended HAI Heli-Expo in Louisville this past February. The location was less than ideal for travel purposes, but we found a better-attended show than anticipated, or at least we thought, as the strange layout of the show made it difficult to be certain. Louisville, what’s with the weird shape of the convention hall? International attendance was noticeably down. Clients we spoke with were generally upbeat, particularly those with limited exposure to the oil & gas industry. Themes that emerged in our conversations:
Oil prices have hit some industry players harder than others
Non-Oil & Gas end markets are quite strong, particularly firefighting and medical
Unmanned Aerial Systems had a strong presence at the show; much rotorcraft work in the future will not be manned
Privatization of military rotorcraft presents new opportunities, particularly for MRO and parts suppliers
M&A interest in the space remains strong, and all eyes are on the Vector Aerospace sale process (expected to fetch 9-10x EBITDA)
We hosted a cocktail party with our friends at CIT Group. Conversation was lively and over drinks (bourbon, naturally) new connections were made. It was great to see so many of you. If we missed you at this year’s event, please reach out and perhaps we can meet for a drink sometime soon. As it turns out, they sell bourbon outside of Louisville, too. We’ll be back at HAI Heli-Expo 2017 in Dallas.
We’re also heading down to the MRO Americas conference. We continue to hear talk about oil prices driving increasing utilization of older aircraft. As we’ve written in the past, we’re cautious on the commercial aerospace cycle. Certainly increasing capacity can absorb some of the new aircraft being produced. But, with older aircraft flying longer, we worry that the amount of increasing capacity ‘left over’ for new aircraft will be less than the industry – and the OEMs – expected. We will be at the show gathering data and look forward to sharing our impressions with you.
We’re changing this newsletter to a quarterly format and also in the process of developing a new look and feel. If you have things you’d like to see or information that would be valuable to you, please drop us a line and let us know. Look for our new design in the second quarter.