PARIS Companies like Eurocopter EAD.PA and Sikorsky are making their helicopters faster, bigger and more comfortable to attract more customers from the offshore oil and gas industry to generate sales as military budgets shrink.
Oil companies already use helicopters to ferry workers to and from offshore rigs. These choppers may rack up 1,500 hours of flight time every year, much more than corporate or even military equivalents.
More than 62 million passengers flew to and from offshore installations in the British North Sea by helicopter between 1976 and 2012, according to the UK's Civil Aviation Authority.
Demand is likely to increase, with JP Morgan estimating investments in offshore oil drilling will grow by just over 8 percent a year on average through 2020. Mining operations also use helicopters extensively to reach sites.
"The oil and gas market is really where the opportunity seems to be right now," said Jean Lydon-Rodgers, president of GE Aviation's (GE.N) military business.
In 2011, 70 percent of GE's rotorcraft engine sales were to U.S. and foreign military forces. By 2016, that figure will shrink to only 30 percent, with commercial uses and especially the oil and gas sector accounting for the rest.
"You're going to see this enormous shift," she said, adding overall sales would remain stable at about 800 engines a year.
Oil majors like BP (BP.L) spend tens of millions of pounds on helicopter flights every year, which they rent from operators such as Bond Offshore or Bristow at prices around 4,000 pounds ($6,270) to 4,500 pounds per hour.
"Helicopters are critical to our operations here in the North Sea, and we use them to transport hundreds of offshore workers every week," a BP spokeswoman said.
Helicopter makers are reacting to the expected growth by launching new models tailored for the oil and gas sector.
Eurocopter, whose large EC225 is already a standard among offshore helicopter operators, asked some of its customers to provide input for the design of its new EC175, which it hopes to start delivering early next year.
"They said they spend so much time in the helicopter, they want, for instance, big windows and comfortable seats," Dominique Maudet, Eurocopter's executive vice-president of global business and services, said at the Paris Airshow.
"For that industry, the helicopter is a shuttle, it is like a bus," Maudet said.
The oil and gas sector accounted for about 30 percent of Eurocopter's 2012 deliveries to the civil and "parapublic" sectors that include law enforcement and emergency medical services. Military makes up about half the firm's business.
Other demands of the oil and gas industry include flight speed, availability of services and spare parts, safety features and the ability to fly long ranges as oil rigs are increasingly set up in deep water far from shore.
"A lot of innovation is going on," said Tom Captain, global aerospace & defense sector leader, at Deloitte Touche Tohmatsu.
Eurocopter's X3 - or "X cubed" - high-speed helicopter could some day be a strong contender for oil and gas companies seeking faster travel. It can fly and descend at 50 percent higher speeds than conventional helicopters but has a cost of operation that is only 25 percent higher.
Its new EC175 will compete with Finmeccanica SIFI.MI unit AgustaWestland's AW139 and Russian Helicopters' new KA-62, which the state-controlled Russian company was showcasing in Paris.
Russian Helicopters has already won an order for seven KA-62s from an operator that services Petroleo Brasileiro, Brazil's state-run oil company, with an option for seven more.
"Our clear vision is that this helicopter will be in great demand in other regions of the world as well, such as the Far East," Chief Executive Dmitry Petrov said.
Russian Helicopters aims to boost its civil business's share of group sales to 50 percent in the medium term thanks to strong demand from the oil & gas industry, he said.
Another rival, United Technologies (UTX.N) unit Sikorsky, announced several new orders this week, including a contract with China's CITIC Offshore Helicopter Co (COHC) for two S-92 helicopters, a competitor to Eurocopter's EC225.
Sikorsky hopes the deal can break Eurocopter's dominance of the lucrative and rapidly growing Chinese market for offshore helicopters.
The offshore business "has really been heating up for us in the last couple of years," said Sikorsky President Mick Maurer.
Eurocopter suffered a setback last year after two emergency North Sea ditchings rattled the oil sector's confidence in the EC225, or Superpuma, and grounded parts of the fleet. It has said the first of those helicopters should start flying again a few weeks from now.
(Additional reporting by Sarah Young, Alwyn Scott, Cyril Altmeyer and Andrea Shalal-Esa. Editing by Jane Merriman)