04 Apr Could Self Storage Be the Solution for the Helicopter Surplus?
By Alex Hassel, Storage.com
With a surplus of helicopters and few places to put them, manufacturers and some owners are looking for storage alternatives for their aircraft.
The Wall Street Journal reports that the oil-industry downturn has actually created a surplus of helicopters. Two years ago, demand was so high that oil and gas companies had to share rides to oil platforms in the Gulf of Mexico. While helicopter manufacturers worked hard to meet the need, demand has suddenly dropped off along with oil prices.
Companies like CHC Group Ltd. and Bristow Group Inc., which ferry workers and cargo for the energy industry, have said they’re surprised at the severity of the downturn and believe it could be at least a year before they see any recovery.
It’s a rough time for big helicopter manufacturers like Airbus Group SE and Textron Inc. that are releasing new models. General Electric Co. also paid $1.8 billion last year for Milestone Aviation Group, the largest helicopter-leasing company by sales.
The roughly 1,900 helicopters used by the oil and gas sector make up 26% of the global commercial fleet, according to AgustaWestland. Industry executives say a fifth of those 1,900 helicopters are idle or unemployed and expect overcapacity to get worse before it gets better.
John Mannion, a Houston-based industry consultant, says that the industry will have to consider options for storing unsold helicopters for the very first time. Manufacturers have said that limited indoor storage facilities in hangars have created a need for alternative solutions. A few ideas listed by Mannion included shrink-wrapping or “Heli-Cells,” inflatable climate-controlled canopies originally intended for cars.
But could the self storage industry offer another solution?
We’ll look at an example of one helicopter typically used in the oil and gas sector: the Sikorsky S-92. With its wings disassembled for long-term storage, the aircraft is just over 56 feet long and more than 17 feet wide. We’ll round it up to 1,026 square feet.
If the manufacturer wanted to store these helicopters near future clients in Alexandria, La., a popular oil hub near the Gulf of Mexico, they would have a difficult time finding a place to put them. The closest hangars we could find were Executive Aviation and PAI Aero Inc. in Baton Rouge. However, both said they were full at this time. PAI Aero Inc. did say that if they had occupancy, a Sikorsky S-92 would cost around $1,200 a month for storage.
Now let’s consider outdoor parking at a self storage facility. A typical 10×30 (i.e., 300 square feet) space for an RV will rent for around $37 a month. Assuming a storage facility had four consecutive empty RV spaces on their lot to accommodate the 1,026-square-foot Sikorsky S-92, it would cost $148 a month. Compare that to a month at a hangar, and that’s a $1,052 difference. Compare it to a year at a hangar, and it’s a $12,624 difference.
If the manufacturer felt comfortable with security and shrink-wrapping the aircraft to keep it outdoors, self storage facilities could be a practical option. However, insurance might be an issue for the $17.7 million Sikorsky S-92.