HI Uplift: Will the industry gallop ahead or slither along?
Welcome to 2026, the Chinese Year of the Horse. But not yet. According to the Chinese lunisolar calendar, we will remain in the Year of the Snake until February 16th, 2026. To probe the future of the civil helicopter industry over the next 12 months, we have recruited expert help. Will the industry gallop ahead in the new Year of the Horse or slither long in the old Year of the Snake?
Opinion was divided as our analysts mulled over how supply and demand plus the looming spectre of rapidly shifting geopolitics would impact the market. Current indicators suggest the sector has a good position from which to accelerate and innovate, according to Sara Dhariwal, principal aviation analyst lead appraiser – Helicopter and AAM Markets at Cirium.
“This outlook aligns with the symbolic attributes of the Year of the Horse, which represent momentum, progress, and a readiness to seize new opportunities,” Dhariwal tells us. “However, this heightened activity must be carefully managed to maintain the industry’s fragile supply-demand equilibrium and mitigate potential volatility.”
Limiting
But supply chain constraints remain a key factor limiting new helicopter deliveries. “These challenges have led to extended turnaround times and escalating maintenance costs,” she says. “Importantly, this is not an issue unique to the helicopter sector as we observe similar pressures across the broader aviation industry.”
These disruptions are expected to continue impacting both new deliveries and fleet replacement cycles. Plus, the current supply-demand dynamics could influence asset values over time. “A notable concern is the growing gap between actual lead times and contract lead times, which has the potential to encourage speculative ordering,” says Dhariwal. “This is particularly problematic in an industry where maintaining a delicate supply-demand balance is critical. Lessons from past cycles underscore the need for greater collaboration and transparency across stakeholders to mitigate the risk of future oversupply.”
Fleet retirement
Fleet retirement trends further highlight the stagnation in replacement activity. Over the past decade, permanent retirements have averaged only 3% year-on-year, slowing to 2% annually over the past five years. This indicates that expected fleet renewal remains subdued, suggests Cirium.
Geopolitics could be a “game changer” for the oil and gas sector, says Clark McGinn, founder and principal of consultancy Uplifting Advice. “President Trump obviously favours fossil fuels; so good for the Gulf (of Mexico) but the UK Government doesn’t seem to have a clue – so a damper on new investment over here.” A key question will be how President Trump’s plans to develop oil production in Venezuela – the country with the world’s largest proven oil reserves of about 303bn barrels – will shape production and oil prices. Also, there’s the question of production in Russia, OPEC countries and Brazil.
“The oil majors – sorry energy giants – have recognised the switch in helicopter supply and demand,” says McGinn. “Not only are rates up but the percentage of fixed Monthly Service Charge is edging back towards the old 70-75%. This builds greater predictability into operators’ results and with some (still slight) improvements to the dreaded/dreadful ‘Cancellation for Convenience’ clause.”
But the bigger issue is debt. “There are very few commercial banks with any appetite to fund helicopters servicing oil and gas,” he says. “I see the helicopter but don't see the money to buy it. Watch out more export credit (as is typical in this part of the cycle) – it's expensive (because of the 10-year paydown) and has onerous conditions – but it works in scale.”
‘No longer the Cinderella’
One sector to watch over the year ahead is firefighting – “No longer the Cinderella story,” he says. He sees good lessor opportunities in developing a high-capability firefighting machines at a lower price than the Sikorsky Firehawk.
The helicopter emergency medical services (HEMS) market also promises growth. But the lack of standard configuration will remain a problem though – particularly in the return/release phase, he predicts. Helicopter support for wind generation continues to make headway in Europe but not in the US under the current presidency.
Fleet replacement remains a key driver of growth but for which models? McGinn asks.
Supply chain challenges will continue to stabilise after the improvements of 2025, he predicts. While supply chains remain vulnerable after the lack of sales/investment in the long downturn, it won't be the biggest issue this year.
In upbeat mood, Alastair Fallon, director, senior appraiser, F4 – Fly Fast Further First believes the year ahead is full of promise. “The commercial helicopter industry in 2026 is poised for significant and energetic growth, much like galloping horses pumped with energy, driven by rising demand across diverse applications, technological advancements and strategic industry developments. But there are still notable challenges,” he tells us.
‘Active for years’
On the upside, major OEMs such as Airbus Helicopters, Leonardo Helicopters and Bell Helicopters have revealed bulk orders for new aircraft with deliveries rising. Measured in value; deliveries are expected to increase.“The backlog alone would keep these three OEMs active for years,” he says. For example, new orders for up to 100 aircraft (some for military service in utility roles beginning the production line with commercial aircraft, in Spain) “will keep Airbus Helicopters in overdrive”.
Production will continue to increase driven by demand for fleet expansion replacing aging aircraft and supporting offshore energy/public services, says Fallon. But manufacturers continue to face challenges such as supply chain difficulties and skilled labour shortages. “This will require careful, strategic growth rather than speculative ordering to meet needs for reliability and new tech on both the commercial and military sectors.”
The oil and gas sector holds particular promise with rising offshore mining and exploration, especially in OPEC nations, driving demand. Plus, in emerging markets, growing urbanisation and demand for rapid transport will boost civilian helicopter demand – eventually with new services such as eVTOLs, he predicts.
‘Definitely a snake’
Less optimistic about the prospects for the year ahead is Brad Shaen, director at International Aviation Marketing. “2026 will definitely be a snake,”he tells us. What will keep the industry slithering along rather than galloping ahead are the threat and reality of war combined with continuing supply chain difficulties.
“The supply chain is still so far behind demand,” he says. “That pulls back on any opportunity to have throngs of deals going on. There's just not the capacity out there right now.”
It’s not one particular problem – such as the availability of windscreens – it’s the whole network. “Everyone's behind the curve and trying to figure out how to catch up,” Shaen continues. “The demand for flight hours is obviously there, but we just can't meet those demands.”
Lack of spares is having the biggest impact at all. “I don't remember a used transaction or a leased transaction that I’m aware of where spare parts have not been an issue,” says Shaen.
The oil and gas sector is a separate case as people “are warm to” the increased use of oil and gas, he says. There’s a growing acceptance that the sector will continue to significant contributions to energy needs for the foreseeable future. But Shaen hopes President Trump’s plans to boost oil production in Venezuela will not depress prices.
More positively, there will be a move to more civil and government services contracts. Examples include the search and rescue contracts offered by the UK and Republic of Ireland coast guard authorities. He also predicts more commercial helicopters used in military or quasi-military applications.
Despite ‘the snakes’, demand for lift across the industry remains strong, with growing requirement for HEMs services and niche demand in subsectors such as firefighting, says Shaen.
Meanwhile, next week we ask will 2026 be the year of the super medium?
All the best for 2026,
Mike Stones
Helicopter Investor