The contract with Leonardo covers airframes, while Pratt & Whitney will support engines. It follows the merger of Bristow with fellow aviation provider Era Helicopters in June 2020, and consolidates Bristow’s existing support contracts with the two firms into a more manageable form.
Previously, Era’s legacy AW139 fleet was covered by a limited power-by-the-hour (PBH) support agreement with Leonardo for airframes, while engines were maintained on a ‘time and cost of materials’ basis.
Likewise, Bristow’s legacy AW139 fleet contract was covered by ‘multiple, disparate PBH support agreements with Leonardo for airframes, while engines were covered under a PBH support agreement with Pratt & Whitney.
“Following the merger … we have been working for two years to align our AW139 maintenance support agreements on the most favorable terms possible for Bristow,” said Stuart Stavley, Senior Vice President, Global Fleet Management. “The cost certainty contained in these agreements is particularly valuable given the broader economic backdrop of the current inflationary environment.”
The aggregate buy-in cost is approximately US$55 million, which will be paid in instalments between June and December 2022.
Bristow President and CEO Chris Bradshaw added: “In addition to the direct investment benefits, which we expect to deliver unlevered, cash-on-cash returns of approximately 20 per cent over the life of the agreements, these new support programs will result in maintenance expenses that are more directly correlated with flight hours and provide more predictable cash flows for the company. In addition, we believe the standardization of these maintenance programs and associated reserves enhances the value of Bristow’s AW139 aircraft, and we believe the totality of the agreements, inclusive of enhanced cash flows for the company, represents substantial value creation for Bristow shareholders.”
Bristow has also recently signed long-term maintenance support agreements with Leonardo for the AW189 airframe and with Honeywell for the AW139 avionics suite, as well as a long-term maintenance agreement with General Electric for support of AW189 and S-92 engines.