Helicopter Industry in Brazil
For the last couple years a boom in the helicopter market was perceived in Brazil, and since then this sector growth has escalated. This article presents the reasons for the spike and the companies and joint ventures actuating the national industry.
The prestige of richness and luxury in days gone by, is no longer associated with helicopters, nowadays the tight schedules of business people and the displacement speed in urban centers has become the main motivation for helicopter purchases in Brazil.
According to data information provided by the trading director of TAM AE, Leonardo Fiuza, 80% of the helicopter models commercialized in Brazil are designated for business purposes. That explains why São Paulo – a city full of business activities – became the world capitol of helicopters officially.
Growth in Helicopters Usage
Considering the fleet and number of operations performed by helicopters in cities all over the world, a data collection organized by the Brazilian Association of Helicopter Pilots in 2012 – Abraphe – put São Paulo as the city with the highest fleet worldwide.
São Paulo has more than 420 aircraft registered and a quantity of daily operations rated in two thousand landings and flights per day. New York City and Tokyo – also large cities as São Paulo – were ranked in the second and the third position, respectively. Brazil was also ranked according to his helicopter fleet:
- United States – 12,000
- Canada – 2,776
- Australia – 2,025
- Brazil – 1,990
- France – 1,300
- United Kingdom – 1,260
Financial Ease of Purchases
The high number of purchases cannot only be explained by the need of an easy and fast way to displace, since helicopter acquisitions aren't cheap. The expensive value of this good were beaten by Brazilians with the ease created for such purchases. A helicopter can be bought in Brazil in up to 60th installments.
Foreign Technology X Brazilian Production
Brazil is known worldwide as a great exporter of commodities, but in the last few years the government has been trying to expand the types of goods exported for the country. The Brazilian economic policy nowadays focuses on seizing the national export potential and the replacement of onerous importations.
How the Helicopter Industry Works
Just as in any other industrial sector, the helicopter industry in Brazil has become a target for high investments in research and development activities. Since this industry is characterized by the presence of high technology, helicopters are goods with a great added value. Their production comprises a long process – from the basic research until the experimental phase – besides the need of multidisciplinary knowledge and the intensive usage of qualified worked force.
All this requirements results in a very expensive production process, that only survives with large volume of capital injections – since investments only returns in long term – and with the cooperation of other advanced industry sectors. The helicopter industry is also dependent on:
- Collaboration with the academic sector concerning high technology activities.
- International cooperation for the economic and social viability and relevance of the industry.
The 100% Brazilian Helicopter
The Brazilian government’s recent enterprising has attended all the exigencies mentioned above. The program the launched EC725 – the first helicopter produced in Brazil – benefits all the industrial chain of the helicopter sector. More than ten companies are receiving new technologies to the production of parts, pieces and services designated to the project.
The new helicopter model is being produced by the new assembly line of Helibras in Itajubá, Minas Gerais. The company should produce EC275 to the Brazilian Army Forces – FAB – and a civil version of the aircraft, EC225 to oil and gas exploration. The investments for this industrial platform accounted 420 million BRL and its part of the nationalization plan of the Brazilian helicopter production.
The project includes important participation of different areas of the government, such as the Ministry of Industry and Trade, BNDES, Ministry of Defense and the Military Forces: navy, army and air force. EC725 is also allowing the insertion of Brazil as a helicopter producer on the international market.
The Arrival of Foreign Companies
At the same time that Brazil is trying to nationalize the helicopter industry, other foreign companies are looking for opportunities in the country. Embraer, the world’s largest producer of regional aircraft, perceived the new booming in the Brazilian helicopter market, established a joint venture with the Italian company Finmeccanica’s AgustaWestland.
The joint venture aims to produce helicopters for both military and commercial use in Brazil and in Latin America. For Embraer this is an important step in order to continue the expansion of their business through the continent, while for Finmeccanica the agreement shows the attempts of the company to enlarge their activities to emerging markets with great consumption capability.
Avio International Group Holding
Another company found in Brazil possibilities to grow. The Swiss company Avio International Group Holding, through an incentive program of Paraná government decided for the installation of a factory of aircraft and helicopters in Maringá, in the Northwest of the State.
The company will invest 174 million BRL in a new plant and create over a thousand jobs. The work for the factory implantation begins in 2014 with the prevision to be completed in 2015. The company will be located in an area of 90 thousand square meters, around the Maringá airport.
Helicopters will be produced two places helicopters (SK-1 Twin Power) and two-seat aerobatic aircraft (F22 Pinguino). The factory will also offered manufactured parts and services for the maintenance of the equipment.