By Ray Jaworowski, Senior Aerospace Analyst, Forecast International.
The helicopter emergency medical services (HEMS) sector has been one of the bright spots for civil rotorcraft manufacturers at a time when the industry has tended to struggle due to very low demand from the key offshore oil and gas sector. Solid demand for new rotorcraft from emergency medical services (EMS) operators has helped to soften somewhat the steep decline in the civil turbine helicopter market experienced since 2013, and is now helping to kickstart recovery in the market.
Over the next several years, while the industry waits for demand from the oil and gas segment to revive, the HEMS segment will likely account for at least 18-20 percent of global demand for civil turbine helicopters.
Nevertheless, a few concerns do exist regarding the future outlook for the EMS helicopter market. One often-overlooked factor in this market is that most HEMS operations are dependent, to some extent, on public funding. This is true whether these operations are provided directly by a government agency or whether they are contracted out to a private company. This reliance on public financing is a cause for concern over the longer term.
In the United States, which features a mix of air medical operator types, the future of the HEMS market is dependent, to at least some degree, on the health of state and municipal government budgets, and the fiscal straits of many state and local governments in the U.S. could serve as a brake on activity in the segment. Reimbursements from the federal Medicare program constitute another source of revenue for HEMS providers in the U.S.
Flight safety, and the possibility of increasing regulatory controls on HEMS operations, is another factor in the long-term outlook for this segment. High-profile crashes of EMS helicopters increase public awareness of, and public concerns regarding, the safety of HEMS operations. Manufacturers, operators, and regulatory agencies alike are constantly working to increase operational safety. HEMS operations will never be risk-free, but the risks can be minimized. One difficulty that can arise is that medical needs and aviation protocols sometimes conflict. Many experts recommend an approach where the medical decision and the aviation decision are viewed separately so that flight safety is not compromised.
Meanwhile, the geographic focus in the EMS market is shifting. The U.S. is the largest market for such helicopters, but demand has dropped off in the U.S. in the past couple of years, as consolidation among EMS providers has resulted in fewer opportunities for sales of new rotorcraft. At the same time, however, the EMS segment has been growing in China and the rest of the Asia/Pacific region. This region has significant potential for market growth, and should help offset somewhat the slowing U.S. HEMS market.
Raymond Jaworowski currently co-authors three of Forecast International’s best-selling products: Civil Aircraft Forecast, Military Aircraft Forecast, and Rotorcraft Forecast. As a contributor to Aviation Week & Space Technology’s Aerospace Source Book, he has authored Aircraft Outlooks, and provided input for the publication’s Aircraft Specifications tables. Raymond has represented Forecast International at numerous conferences and trade shows, often as a featured speaker.
A military history enthusiast, Richard began at Forecast International as editor of the World Weapons Weekly newsletter. As the Internet grew in importance as a research tool, he helped design the company's Forecast Intelligence Center and currently coordinates the EMarket Alert newsletters for clients. Richard also manages social media efforts, including two new blogs: Defense & Security Monitor, covering defense systems and international issues, and Flight Plan, which focuses on commercial aviation and space systems. For over 30 years, Richard has authored the Defense & Aerospace Companies, Volume I (North America) and Volume II (International) services. The two books provide detailed data on major aerospace and defense contractors. He also edits the International Contractors service, a database that tracks all the contractors involved in the programs covered in the FI library. More recently he was appointed Manager, Information Services Group (ISG), a new unit that encompasses developing outbound content for both Forecast International and Military Periscope.
