On the up: CHC Helicopter's optimism for Brazil's offshore air support sector

One of the top global providers of offshore air support services, Canadian firm CHC Helicopter sees the market recovering in Brazil, with a significant reduction in downtimes for aircraft. 

In January, the company signed five contracts with Petrobras for the offshore transportation of passengers and small loads to the Campos basin for the next four or five years. 

The projects are expected to start in the second half of 2023 and were awarded as the result of a competitive tender held in August 2022.

In this interview with BNamericas, Carlos Madaleno (pictured), sales director for the Americas at CHC do Brasil, discusses the local scenario, underlining his optimism that Petrobras and private oil companies will require new services this year and in the future.

BNamericas: How many aircraft does CHC currently have contracted in Brazil? How many of them are with Petrobras?

Madaleno: We have four under contract with Petrobras, in addition to the five we recently won. We expect to start the new contracts between July and August. We also have a contract with Equinor, but it’s associated with an exploratory campaign and should end before the start of the contracts with Petrobras. 

BNamericas: These involve just helicopters or are there also fixed-wing aircraft? 

Madaleno: Always helicopters, rotating wings. 

BNamericas: What are the company's growth prospects in 2023?

Madaleno: CHC is a global company, with headquarters in Dallas, US, and we operate in all parts of the world, with different types of services, such as oil and gas crew changes, and search and rescue, outside Brazil in the latter case. Here the armed forces are directly responsible for that activity. 

Another front where we're also very active is in the expansion of air support services for offshore wind projects in the Americas. 

When it comes to Brazil, we see it as a market that's recovering from the crisis experienced in the last few years, when there was a decrease in offshore campaigns amidst the COVID-19 pandemic. We see the market on an upward trend in this and the coming years, with demand for new aircraft. 

BNamericas: Are private oil companies tending to increase services with the company?

Madaleno: Not only in CHC, but in the market in general. Petrobras will continue to be the protagonist for many years, but we see increasing participation of companies that have taken over Petrobras' assets, such as PRIO, Trident Energy and Perenco, as well as an increase in the activities of large oil companies such as Shell and Equinor. 

BNamericas: Have rising fuel prices affected CHC's business? How has the company dealt with that?

Madaleno: The war in Ukraine has brought a challenge to the supply chain market. Not only fuel, which is suffering with the variation in the exchange rate, but we also see difficulties in the replacement of parts and pieces due to the impacts suffered by the supply chain. This is being discussed in order to minimize the impacts. 

BNamericas: Is the increase in charter rates one of the consequences of this scenario?

Madaleno: Today, the contracts tendered have their own monetary corrections for inflation, but what has been happening in the charter market is a recovery in prices due to the reduction in the idle capacity of aircraft.  

BNamericas: What are the most commonly used contract modalities? Long-term or spot?

Madaleno: For the production area, Petrobras usually charters long-term contracts, because it’s a more attractive model, lasting four or five years, for example. In the case of private companies, it depends on the case. For production asset contracts, there can be long-term contracts, for two years, for example. For exploratory campaigns, there are shorter contracts, of six months, for example.  

With the reduction in idle capacity, short-term campaigns become more challenging for air support companies. We no longer see such rapid availability in the aircraft market. 

BNamericas: Brazil has isolated E&P assets, both offshore, more than 200km from the coast, and onshore, in the middle of the Amazon jungle, for example. Have CHC's aircraft required adaptations to make these trips?

Madaleno: The bids already come with very robust technical requirements for the aircraft to be ready to serve all distances, including having safety capacity higher than the minimum required. 

The machines that are here have state-of-the-art technology. Distance isn't a problem today. The market works with small and medium-sized models, onshore, and super-medium and large offshore. The offshore machines are generally from manufacturers Sikorsky, Leonardo and Airbus, which also operate onshore.  

BNamericas: Do helicopters always carry passengers or are there cases where they transport only materials, fuel or other goods?

Madaleno: There are cases in which they only transport cargo or sick people on health flights. 

BNamericas: Can the development of new drone technologies lead to transformations in offshore air support? Is there the possibility of unmanned aircraft?

Madaleno: We see more and more new technologies coming. I have no doubt that drones will arrive to complement, rather than replace, performing inspection activities, for example. Unmanned aircraft may appear in the longer term. 

Offshore air support is a very complex and demanding market from a safety point of view. So people have to have high technical skills, and this is an extra challenge, to train more pilots, mechanics, in order to assimilate all this growth that we expect to come.