Bristow bemoans continued helicopter supply chain malaise

Operator hit by penalty charges in government services business due to ongoing fleet availability issues.
Bristow Group chief executive Chris Bradshaw has railed against persistent spare parts availability issues in the helicopter industry which are continuing to impact on the company’s operations and profitability.

Although Bristow has previously suffered from problems related to the supply of main gearboxes on the Sikorsky S-92, the focus now appears to have switched to Leonardo Helicopters and the AW189 super-medium- and AW139 medium-twin.

Outlining the scale of the issue as the company presented its third-quarter results on 4 November, Bradshaw said that since 2020, on-time deliveries by the helicopter OEMs has fallen by 20%.

“Moreover, when delivery dates are missed, they have been missed by extended intervals,” he says.

This has led to extended maintenance downtime and reduced aircraft availability, requiring Bristow to “ increase inventory levels and implement other mitigations that come at a cost to the company.

“But unfortunately, key components continue to have increased turn times and arrive late from the suppliers,” he says.

Although the supply chain crunch has been felt across the business, he says, the “most acute impacts” have been seen in its government services unit, which includes search and rescue (SAR) operations in the UK and Republic of Ireland.

In this case, the slower than expected arrival of parts has caused “delayed aircraft modification programmes for the company’s new search and rescue contracts”, depressing margins in the segment.

Although penalties related to missed aircraft availability targets have been imposed by customers – on the Irish SAR contract, reducing revenues in the quarter by $0.7 million – these “dramatically underestimate the total impact.

“The full knock-on effects of these delayed contract transitions include, but are not limited to, lost revenue opportunities, manpower and time spent chasing parts, cannibalisation of the company’s internal fleet to keep aircraft flying, and delayed aircraft lease returns, not to mention retaining additional headcount, overtime expense, and costs for outsourced third-party maintenance support,” Bradshaw says.

He points out that all the aircraft being deployed on the Irish SAR contract are AW189s, while the UK SAR2G service uses a mix of AW189s and AW139s, alongside S-92s.

Despite singling out the Italian manufacturer, he is positive about the effort the airframer is putting in place to solve the underlying problems.

“In terms of what gives us some comfort on that timeline, we’ve spent an extensive amount of time in working sessions with them, really in Italy, on the production line, as well as at our bases,” he says.

“They’ve also come out and had joint meetings supporting us with our end customers, those government customers, which has been helpful for the end customer to hear the message directly from the OEM.”

He points to the “significant investments” that Leonardo is making in its supply chain “to build up inventory levels” and in the case of windshields – shortages of which have been a persistent problem – moving from a single to a triple source for the components “to help provide some better resiliency into that key component”.

“Overall, we think the incentives are in place to get this fixed and normalised,” Bradshaw adds.

He remains confident the issues will stabilise in 2027 “facilitating a return to historically strong margins in the government services business”.

Revenues in that segment climbed in the three months to 30 September to $130 million, notably driven by a $16.9 million contribution from Berry Aviation, a business acquired in July.

Total revenues stood $437 million, with EBITDA of $89.6 million, up on respective figures of $411 million and $79.8 million in the preceding quarter.

Revenues from Bristow’s traditionally core offshore oil and gas business were $256 million, down $5.6 million on the second quarter.

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