| Where are the Helicopters? A Report on the First Shanghai Delta Helicopter Business Delegation October 12-15, 2003 By Timothy M. Biddle In mid-October, 26 Helicopter Association International (HAI) members met with Chinese businessmen and government officials in Shanghai to discuss the immediate development of a civil helicopter industry in the Shanghai Delta area, and eventual expansion of the industry to other major metropolitan areas in China. Shanghai officials welcomed the delegation because the city and its neighboring cities have an acute need for helicopter services. Consider this:  The city of Shanghai has a population of 13 million; and additional 3.5
million people come into the city daily to work. Shanghai is the commercial center of China; there are about 400,000 businesses
in the city. There are more than 4,000 high-rise commercial and residential buildings in Shanghai; 200 of them are more than 70 stories. Shanghai is the largest of several cities in the Shanghai Delta, an area
of 2,450 square miles, with a population of 30 million people. There are about 23,000 foreign companies doing business in the Shanghai
Delta; many of the world’s largest manufacturers have plants there. The economy in the Shanghai Delta is growing very rapidly about 12 percent growth in GDP per year, the fastest in the world. In the entire Shanghai Delta area, there are only six helicopters that
are used for non-military purposes, and most of those can only fly with
special permission. Although still ruled by a communist government, China “opened for business” in late 2001 when it joined the World Trade Organization (WTO). While China’s WTO membership opened its markets to the world and permitted foreign investment in domestic business, it did not open China’s skies to domestic commercial or private aviation. China’s domestic airspace (except in the Hong Kong and Macau areas) continued to be restricted to military flights, with very few exceptions. As a consequence, there is virtually no commercial helicopter industry in China. In fact, in all of China there are only 122 civil helicopters. The Chinese government does not contract for helicopter services, such as firefighting or other types of government helicopter use common in the rest of the world. Today, if a Chinese city or provincial government needs a helicopter, the Chinese Air Force or Navy must provide it ? assuming the military has available a properly equipped helicopter and trained crew, and is satisfied there is a good reason to use it. Last year, at the suggestions of HAI member ITC-Aerospace, and the All-China Federation of Industry and Commerce, Shanghai city officials ? both those with public safety responsibilities and those who are promoting economic growth ? invited HAI President Roy Resavage to Shanghai to tell them about the elements of a viable commercial helicopter industry. Mr. Resavage told high-ranking officials from the Central Government in Beijing, China’s capital city, and from the Shanghai city government, about the capabilities of helicopters, the availability of helicopter types for a variety of commercial and non-military government service purposes, and the many companies around the world that supply parts and provide support for the industry. He emphasized that the linchpin for a commercial helicopter industry is the freedom to fly at low altitudes, to meet the demands of commercial and government customers, and the opening of airports for helicopter use. In May 2003, spurred by entreaties from domestic business and from its big cities ? led by Shanghai ? the Chinese government finally decided to open China’s airspace to commercial aviation. But “open skies” in China still doesn’t mean freedom to fly when desired; instead, unscheduled non-military domestic flights must have advance approval from the Civil Aviation Authority of China (CAAC), the government entity that controls non-military Chinese airspace. Obtaining that approval usually takes seven to ten days. Nevertheless, Shanghai officials are optimistic that the opening of the skies will signal a new day in China for commercial and public safety aviation, including a relaxation of the advance approval requirements. Convinced that China’s skies will soon open for “on demand” helicopter flights, the All-China Federation of Industry and Commerce and the city of Shanghai invited the helicopter industry to send representatives to shanghai October 2003 to educate them about helicopters and their benefits. Forty-six companies responded to that invitation. For three days in mid-October, the company representatives, called the 1st Shanghai Delta Helicopter Business Delegation, met Chinese officials from the Central Government, the City of Shanghai, and several surrounding cities, toured the city and nearby maritime search and rescue helicopter base. They also attended luncheons and dinners that provided opportunities for delegates to become acquainted with their Chinese hosts. There were 26 delegates from U.S. companies, eight from Taiwan, seven from Japan, six from China, five from Canada, two from Germany, and two from Russia. Companies from Australia, Fiji, Ireland, and South Africa each sent one representative. HAI-member companies that sent representatives included Aviation Management Systems, Becker Helicopters, Bell Textron, Brantley Aviation, Breeze-Eastern, CIVIC Helicopters, Enstrom, Ericson, Euroavionics, Eurocopter, Evergreen, Goodrich, Heliflight, HeliPro, Heliservices, HeliValues, Honeywell, ITC-Aerospace, Sikorsky, Simplex, Superior Helicopters, Tradewinds International, Universal Helicopter, Utilities Aviation, Vancouver Island Helicopters, and Vostok Airlines. Because HAI President Roy Resavage could not attend, Tim Biddle, the Special Advisor ? Legal, to HAI’s Board of Directors, attended as HAI’s representative. Chinese participants included a senior official of the All-China Federation of Industry and Commerce, the Vice Chairman of the Development and Reform Committee of Shanghai Municipal Government, the Vice Chairman of the World Expo 2010 Bureau, the Senior Engineer of the Shanghai Fire Fighting Bureau, the head of the Shanghai Airport Group, a representative of China Eastern Airlines, an official from the Military Transport Administration, the President of a University in Beijing, the General Manager of the Shanghai World Exhibition, an official from the china-Japan Industrial Association, the Vice Director of the China Private Educational Industry Group, the Deputy Director of the Shanghai Pudong New Area Investment Projects Office, and an official of CLP Power. From speeches and conversations, the delegates learned: Beijing is hosting the Summer Olympics in 2008. The Central Government wants helicopters available for a variety of tasks during the Games. Shanghai is hosting the World Expo in 2010. The organizers are expecting
70 million visitors that year. They want helicopters available for transportation
of Expo officials and VIPs, and for public safety. Shanghai city officials need helicopters now for firefighting and rescue,
EMS, newsgathering, and inter-city transport in the Shanghai Delta region. There are only six places where helicopters can land in the Shanghai area; the city wants many more helicopters and helipads. The Central Government will now permit foreign companies to do business
in China without a Chinese business in China without a Chinese business
partner, and will allow expatriation of Chinese money. If a foreign company chooses to have a Chinese partner or joint venture,
the foreign company may hold a controlling interest in the venture. By 2013, China expects to have more than 1,000 helicopters flying for commercial and public safety purposes. There is a critical need throughout China for helicopters for heavy-lift
work, power line patrol, aerial spraying, and executive transportation. There is an estimated need for 200-300 new helicopter pilots per year,
for the next ten years. China will need several hundred helicopter mechanics during the next few years. None are available now, and none are being trained.In short, China presents a huge untapped market for helicopters, helicopter services, and pilot/mechanic training. The Chinese participants told the delegates that they plan to take two actions in the immediate future to launch a helicopter industry in Shanghai and eventually throughout China. First, Chinese government officials and businessmen interested in forming a commercial helicopter industry are starting a membership organization called the “China World Helicopter Association” (CWHA). Like HAI, the CWHA will become an affiliate of HAI and most likely of the European Helicopter Association (EHA). The CWHA will have as members: Central and Municipal Government agencies interested in civil helicopters, Chinese and foreign companies that operate (or plan to operate) helicopters, manufacturers of airframes, engines, avionics and parts, training facilities, insurers and others interested in the helicopter industry. A primary purpose for the new organization will be to present a unified industry voice to the Central Government asking that skies throughout China be open for low altitude on-demand flights, with liberal operational regulations similar to the systems in North America and Europe. After the CWHA is formed, Shanghai city government officials want to form an entity that will be named the “Shanghai Helicopter Center.” The Center, which would be owned entirely or in part by the government, will operate its own helicopters from strategically located helicopters for public safety purposes or will contract with private companies for those services. Center helicopters would fly primarily for fire departments, police, and emergency medical services in the Shanghai area. The Center would employ its own pilots and would maintain (or contract for) a command center, a maintenance facility, a parts inventory for its helicopters, and a cadre of mechanics and ground support personnel. Chinese officials expect CWHA to be formed before the end of 2003, and expect the Shanghai Helicopter Center to be operational in late 2004. Whether the Chinese can bridge the gap between their obvious need for helicopters and the measures it will take to support a viable helicopter industry, remains to be seen. But, there is no doubt that the Chinese market is huge and with the relaxation of Central Government airspace controls, a helicopter industry can grow and flourish in China. With the help of the HAI members who went to Shanghai in October, the Chinese soon should to able to stop asking, “Where are the helicopters?” and start shouting, “Here come the helicopters!” Tim Biddle is special legal advisor to HAI’s board of directors. Mr. Biddle is grateful for the assistance of John Contas, director of new business development for Aviation Management Systems, Inc., in the preparation of this article. Mr. Contas was a member of the delegation in Shanghai. |
