November 8, 2015 / 10:58 AM / 4 years ago

Wars, conflicts to spur demand for Russian helicopters

DUBAI (Reuters) - Conflicts and militant attacks in the Middle East and elsewhere will offset falling demand for helicopters driven by softer oil prices, the head of Russian Helicopters said on Sunday.

Russian Helicopters, part of state corporation Rostec, is unlikely to see any negative effect of lower petroleum prices this year due to committed orders and deliveries.

But the firm could see a decline in sales in 2016 and 2017 by about 10 to 15 percent, chief executive Alexander Mikheev told Reuters at the Dubai Air Show.

The market for helicopters, which are used extensively in the oil and gas industry, is dependent on oil prices that have fallen significantly in the last year, he said.

He suggested however demand spurred by security requirements looked robust.

“It is clear that local conflicts and terrorist attacks require helicopters more and more. So if there’s this demand, there’s no problem for orders,” Mikheev said.

“We will also substitute decline in demand with after sales service.”

The company’s M-17 and M-18 helicopters proved very reliable in Afghanistan and can operate efficiently in very hot climates.

Over 500 Russian helicopters are in operation in the Middle East and North Africa, Mikheev said.

Russian Helicopters plans to expand its production overseas in a joint venture in India.

“We are still in talks,” said Mikheev declining to give a timeline. Talks are going on with India’s Hindustan Aeronautics Ltd, Reliance Defence & Aerospace and Larsen & Toubro for making KA-226 helicopters in India, he said.

Earlier this year Russian Helicopters signed an agreement with Aviation Industry Corporation of China (AVIC) on cooperation for heavy helicopter development.

Russian Helicopters also has a joint venture with Augusta Westland for the development and manufacturing of single engine helicopters.

The firm also plans to open a service center for helicopters in Egypt in 2017, he said, adding that Egypt has 77 Russian helicopters.

Reporting By Stanley Carvalho, editing by William Maclean and William Hardy

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