Chinese rotorcraft market – a world of possibilities

helicopter rescue
Staking a claim

International helicopter manufacturers are all looking east at the vast Chinese market for rotorcraft, ancillary kit and maintenance and training services. Robin Gauldie reports

In April 2018, China announced the creation of a Ministry of Emergency Management. Its role is to devise and oversee an emergency and rescue strategy for a country of more than one billion people that embraces the world’s highest mountains, vast desert expanses, a land area of 9,600,000 km2, a 14,500-km coastline, and some of the world’s largest, most densely populated conurbations. Not to mention a climate subject to extremes of heat and cold and weather events that include floods, dust storms and typhoons. Responding to these challenges requires rotorcraft and crew capable of responding to humanitarian emergencies and natural disasters in a daunting range of conditions.

Major emergencies aside, China needs a huge helicopter fleet for everyday tasks ranging from traffic management and law enforcement to air ambulance, coastguard and maritime search and rescue response and offshore oil and gas support activities. The Chinese civilian rotorcraft market will grow by more than 200 units annually, analysts say, driven largely by demand from the emergency medical services and policing sectors. China is in the market for everything from heavy lifters to light and medium-sized helicopters – and even more so for pilots, HEMS-trained flight crew, and maintenance staff. 

hong kong helicopter

EMS as a driver

In the APAC region as a whole, EMS was a growth driver and constant talking point through 2018, said Jeffrey Lowe, Managing Director of Asian Sky Group (ASG), a Hong Kong-based aviation industry consulting firm, who affirmed that China is now ‘the regional driver of growth’ in the Asia-Pacific rotary market.

China, with 667 operational turbine helicopters, [at the end of 2018] now has the second-largest fleet in the Asia-Pacific region after Australia, ASG’s Asia Pacific Civil Helicopter Fleet Report Yearend 2018 revealed. China witnessed the largest fleet addition in the region through 2018, with 81 turbine helicopters added to its fleet, an increase of almost 14 per cent year on year, and mainland China’s turbine EMS-configured fleet has grown from 20 helicopters in 2016 to 75 such rotorcraft in 2018. China’s EMS turbine helicopter fleet increased by 28 aircraft last year, overtaking Australia to come second in terms of EMS fleet size, after Japan, according to ASG.

“With a relatively young helicopter fleet and an expected continued positive fleet growth rate, greater China is one of the most promising helicopter markets in the Asia Pacific region,” the ASG report stated.

“This is the most significant increase of any EMS sector across the Asia-Pacific region, about 60 per cent,” says Litalia Yoakum, Asian Sky’s Communications Director.

In the past, the People’s Republic relied on home-grown clones of chunky Soviet-era helicopters such as the Mi-4 and Mi-17, which were originally conceived primarily for military missions.

More recently, China drew heavily on Airbus models for inspiration for its Z-11 light helicopter – essentially a knock-off of the veteran AS350 Écureuil – and the heavyweight Z-8. However, things have moved on, and instead of basically reverse-engineering foreign designs, China is busy cementing partnerships with manufacturers like Airbus, Leonardo, and Russian Helicopters.

Three years ago, China lifted tight restrictions on its airspace to allow civil aviation below 3,000 metres, and the State Council published its Guidelines for Promoting the Development of the General Aviation Industry, instructing government ministries and provincial, regional and municipal governments to ‘strengthen the use of general aviation in disaster relief, emergency medical and other applications, complete air emergency rescue systems and upgrade rapid response capabilities’.

“The Chinese government has signalled a firm resolve to develop China’s air medical and emergency rescue service sector,” said Rob Paix, Australian-based Founder of XL Consulting, an aviation and business consultancy headquartered in Xi’an, Shaanxi province.

Room for growth

Only around two per cent of China’s helicopter fleet is currently dedicated to HEMS operations, Paix notes, drawing on figures gathered by Asian Sky. By 2020, however, the air medical and rescue market could be worth $22.4 billion, with hospital admissions via HEMS reaching one million.

The order books of the world’s leading helicopter builders reflect the pace with which the Chinese market is growing, especially in the HEMS sector

Challenges, he says, include an incomplete legal and regulatory framework for civilian operators, inadequate planning for integrated emergency response, high entry costs and high costs for end users of aeromedical operations, lack of experienced special mission qualified pilots, and lack of infrastructure. “Chinese hospitals were not planned with helipads in mind, and there is a lack of trained air medical personnel, emergency response teams, and quality equipment,” Paix added.

The order books of the world’s leading helicopter builders reflect the pace with which the Chinese market is growing, especially in the HEMS sector.

Launched in 2006, Airbus Helicopters now has bases in Beijing, Shanghai, Shenzhen, Harbin, Chengdu, Wuhan, and Hong Kong. In 2014, Airbus Helicopters signed a joint development deal with Avicopter, the helicopter arm of state-owned Aviation Industry Corporation of China, to produce at least 1,000 of its new generation rotorcraft. Based on a common platform, the Avicopter AC352 (a variant on the EC175, now designated the H175) will be assembled in China for the domestic market. In September 2018, Airbus Helicopters delivered the first H135 in HEMS configuration to the Health Commission of Qingdao, in Shandong Province. China has contracted for 100 H135s, with the first five to be assembled in Donauworth, Germany, where Chinese final assembly line employees have been receiving training from their German counterparts since April 2018. The remaining 95 will be assembled in Qingdao in a new plant in the province’s Jimo Industrial Development Zone, launched in 2019 in a partnership between Airbus and Qingdao United General Aviation.

hong kong helicopter landing pad

Airbus has been a force in the Chinese market since the 1960s, according to Bruno Even, CEO of Airbus, holding the leading position in the civil and parapublic sector with 280 Airbus helicopters serving 75 customers, and holding a 37-per-cent share of a market that has experienced annual growth of 20 per cent in recent years. EMS customers include Beijing 999 Center and Shanghai Skyway General Aviation Company, both of which operate fully equipped and dedicated H135 rotorcraft. In addition, Shandong MIT Group operates seven H130 helicopters with medical equipment. Airbus estimates the overall China rotorcraft fleet, including craft operating EMS, search and rescue, security, disaster relief, firefighting and survey missions, could exceed 1,500 aircraft by 2022.  

However, as the Chinese helicopter market heats up, the European aerospace giant faces strong competition.

helicopter landing hong kong harbour

Growing competition

“Of the helicopters configured for EMS use [by the beginning of 2019], Leonardo held the largest market share with 54 units, followed by Airbus with 12 and Bell with nine,” notes Litalia Yoakum of Asian Sky.

Last year,  Leonardo announced contracts with Sino-US Intercontinental Helicopter Investment, its exclusive distributor in China,  for 15 AW139 helicopters to be used in the EMS role by Kingwing General Aviation, currently mainland China’s largest EMS operator and second-largest civil rotorcraft operator after China Ocean Helicopter Corporation, which operates mainly in the offshore oil and gas support sector. 

With the new orders, Leonardo reinforces its position in China, a fast-growing and highly competitive market
Alessandro Profumo, CEO, Leonardo

The aircraft will be delivered between 2019 and 2021, strengthening the collaboration between Leonardo and Sino-US, and building on contracts for EMS helicopters which already include 34 AW119Kx single engine machines, 24 AW139s and 25 AW109 Trekkers, according to Leonardo. The deal brings the Italian company’s total sales in China to more than 185, with a further 160 units slated for delivery between 2019 and 2023.

“With the new orders, Leonardo reinforces its position in China, a fast-growing and highly competitive market,”

said Leonardo CEO Alessandro Profumo at the time of the announcement. 

In November, JSC Russian Helicopters, the helicopter subsidiary of Russian state-owned corporation Rostec, inked a deal to deliver 20 of its Ansat helicopters to China’s Emergency Medicine Association in 2019-2020.

“The contract marks the full-fledged introduction of Ansat to the international market,” said Andrey Boginskiy, Director General of Russian Helicopters.

That deal was quickly followed by what Rostec Director of International Co-operation and Regional Policy Viktor Kladov called ‘the contract of the century’ with China for joint development and production of a next-generation heavy lift helicopter, the outcome of four years of negotiations.

Russian Helicopters is also close to opening a maintenance and repair centre for Russian-built Ka-32A11VS and Mi-171 helicopters in Shenzhen in partnership with Chinese company United Aviation Techology, Boginsky said. More than 300 Russian-built helicopters are registered in China, where the Mi-8/17 and Ka-32A11BC types are especially valued for their ability to operate in rugged terrain and harsh climatic conditions.

Meanwhile, Bell’s 407GXi light helicopter received certification from the Civil Aviation Administration of China earlier this year, paving the way for immediate deliveries. Bell had already received an order for 100 of its 407GXP helicopters from the Shaanxi provincial government, which plans to deploy at least 12 in a new province-wide HEMS network.

helicopter landing pad china

Focus on crew training

With the rapid growth of China’s national rotorcraft fleet comes a parallel demand for pilots, crew and maintenance staff. “A lack of experienced personnel is the next big issue operators face,” the 2018 ASG fleet report noted. International suppliers have responded by inking a number of deals to help China develop a pool of such staffers.

In November 2018, European manufacturer Thales – a major player in China since the 1990s – signed a partnership agreement with Avicopter to set up a civil helicopter pilot training centre in China, offering simulator training for types including the AC312, AC313 and AC352.

Together with its Chinese partner Sino-US, Leonardo plans to launch a Leonardo Authorised Training Academy in what is described as ‘a new phase of increased collaboration’ to support the country’s growing rotorcraft fleet.

Airbus Helicopters ... also plans a China-wide dedicated training service to develop a home-grown pool of qualified pilots and technical staff

Airbus Helicopters, which in 2011 launched China’s first training programme for helicopter technicians in partnership with the Civil Aviation Flight University of China (CAFUC), also plans a China-wide dedicated training service to develop a home-grown pool of qualified pilots and technical staff, and is developing an array of type-rating training solutions, including European Aviation Safety Agency-certified full flight simulators.

Across the board, China is shaping up to fulfil its potential as the world’s largest market for EMS helicopters and the human resources to support what may soon become the world’s largest air medical fleet. Manufacturers and others are taking note. Many factors are in play – not least, the looming threat of a Trump-inspired trade war with the US which could advantage European manufacturers over US rivals. For an ever-growing range of interested parties in the EMS sector, mainland China is an area that offers huge opportunities, and competition is heating up for companies to realise the market’s true potential.