Crossing China, a vast and geographically challenging country, has never been an easy task for its people, officials or rescue workers. Listen to executives from the helicopter industry and they are convinced they have the answer. But while they are making some sales here, the Chinese market for whirlybirds remains small.
Laws, regulations and military restrictions have combined to limit growth in the country, concedes Chris Jaran, managing director of China for Texas-based Bell Helicopter. However, he believes the next 10 years will see “significant growth.”
In an interview with China Economic Review, Jaran explains how Bell Helicopter is preparing to serve the market by training Chinese helicopter pilots and maintenance crews, and how one day the company might assemble aircraft in China.
Helicopter ownership rates in China are just a fraction of what they are in the US, Europe and even other big emerging markets. What are your growth projections for the market in the next 10 years?
We see significant growth in China in the next 10 years, but it will depend on how fast the government opens up the airspace and how quickly pilots and mechanics can be trained.
What is your share of the China helicopter market?
Bell Helicopter currently has approximately 20% of the commercial turbine helicopter market in China and we expect to see additional growth in the years to come.
What are your goals, sales and otherwise, in China for the next decade?
Bell Helicopter is looking to provide better training and spares support for our customers as well as help build the general aviation infrastructure in China.
Which market segments do you see as the fastest growing in China and in what areas do you specialise?
Due to the shortage of pilots in China, we see the helicopter training market has huge potential, especially with the SLS [short light single aircraft]. We also see potential with the Bell 525 as the energy industry grows in China.
Can you tell us about your top selling models in China, and let us know about your product positioning in this market?
Currently the Bell 407 and Bell 429 are the top selling models in China. They are mainly used for corporate and utility purposes.
What are the challenges that you face in selling to China from global peers and how are you addressing them?
In addition to adapting to the language and cultural differences, we are continually trying to streamline the sales process, and improve our spares supply, support, and training.
Like with many sectors in China, foreign companies have touted helicopters as a potentially huge market for years but progress has been slow. To what extent have your expectations been missed, and how are you planning for future growth considering your past experiences?
While we would always prefer things to happen faster, we believe we are on the right path in China and predict a large opportunity ahead. As mentioned before, a lot of this will fall on training for mechanics and pilots as well as government regulations, but we predict significant growth in the next 10 years and beyond.
Are you building or assembling more helicopters within China or are you mainly importing them? What are the main difficulties faced when importing helicopters into China?
We have had success importing helicopters over the past few years and growing our international infrastructure and sales, but we do realize a localized approach is necessary for long term success in many international markets. Our strategy in emerging markets is to first build the training and infrastructure to support the market with qualified pilots and maintainers and learn the market, then progress to completions and ultimately to final assembly.
What are the biggest differences you have noticed in buyer behaviour and requirements between China and, for example, the US or Brazil?
We are seeing customers that want multi-mission configurations that can be interchangeable, such as having corporate seating that can be removed to install a litter kit for rescue missions. This is compared to operators in North America that need dedicated configurations for HEMS [helicopter emergency medical service] and corporate missions.
A lack of helipads, air traffic control infrastructure and severe restrictions on non-military and non-commercial are often cited as major obstacles to the development of the China helicopter market. What changes are you seeing in these areas?
The recent changes by the CAAC [Civil Aviation Administration of China] to loosen airspace restrictions by the PLA [People’s Liberation Army] have certainly improved the outlook of the general aviation industry.
China has a shortage of qualified air service personnel and maintenance crews to deal with helicopters. How can this be overcome?
We believe the best way to combat this issue is direct investment in the region. For example, Guangzhou Civil Aviation College is well on its way to becoming the first authorized Bell Helicopter Maintenance Training facility in China for the Bell 206L and Bell 407 product lines.
Guangzhou College’s instructors have made significant strides in process to become a Bell Helicopter certified training facility. The required classroom theory training and associated practical assessment were completed in July at the Bell Helicopter Training Academy (BTA) in Fort Worth, Texas. Under the supervision of BTA instructors, the college completed its first Bell 206 course in Anyang, China on August 23 and its first Bell 407 course in Beijing, China on September 6. The college is procuring its first Bell model 206 training aircraft and is expected to have it ready for training by early Q3 2014.
Plans are also moving forward with Suilian Helicopter General Aviation Co., Ltd. to open a Bell Helicopter authorized flight training school. Suilian began instructor pilot training on September 16 at the Bell Helicopter Training Academy in Fort Worth, Texas. Both pilots successfully completed their Bell 206L flight instructor training. Additional training recently began for the Bell 407 model.
How much have aviation laws and regulations in China hindered the helicopter market? What impact do you see in the easing of new restrictions that came into force on December 1 as having in the short to medium term?
Easing of restrictions will accelerate the flight plan approval process, which will hopefully result in more general aviation aircraft being produced.
How do the laws, regulations and military restrictions in China compare with other big emerging markets like Brazil, India and Russia?
The government restrictions for general aviation have limited the growth for helicopters in China compared to other countries such as Brazil and Russia which already have strong infrastructure in place for commercial helicopters. However we see China eventually catching up to these countries in the future.