Sounding Board: Five Minutes With Frederic Lemos, Head Of Airbus Corporate Helicopters
Frederic Lemos joined what was then Eurocopter in 2003 as a sales manager, rising through the ranks to become head of business aviation and marketing when the company was rebranded as Airbus Helicopters in 2014. In 2017, the company set up a new division to develop, market and handle customer relationships for its business rotorcraft, and Lemos was installed as its head. In 2017 the new Airbus Corporate Helicopters (ACH) division sold 53 aircraft, representing a little over a quarter of the sales that year in the market sectors it addresses. Five years on, ACH claims 65% of the global corporate turbine helicopter market, booking 103 sales in 2021. Ahead of a fifth anniversary that the division will celebrate at EBACE, Lemos spoke with the Weekly of Business Aviation during a visit to Airbus Helicopters’ UK facility at Oxford Airport.
Q: Clearly, five years ago, nobody knew the world would be disrupted by a pandemic: but, setting COVID’s impacts to one side for a moment, have the first five years gone the way you hoped or expected they would?
Yes. Actually, it went beyond my expectations. I believed strongly in the ecosystem we were building inside the company to better address the private-and business-aviation community in a more specific way through this brand platform and this specific team. We were expecting to get stronger in the market and have more market share, not only in volume but in value—but it went beyond our expectations in terms of numbers and business impact.
But it’s not time for complacency. Selling 53 helicopters and selling 103, also present challenges for us to meet. There is a priority to deliver those aircraft in a satisfactory manner, to continue to deliver the value we have promised to our clients, to continue to deliver that customer experience which makes ACH different from competition and meet that demand from our clients. I believe the future will continue to be brilliant for ACH. But we can’t fall in the trap that we’ve done the job and we are there already, because the market has a capacity to copy you, and that’s what is happening now. It will take an effort from competition to reach where we are, because it’s not just about marketing. It took us a lot of years in terms of awareness within the company and building processes to be able to provide that customer experience, and franchise it through all our worldwide network.
Q: You’ve had significant success in New Zealand and Australia with the Aston Martin edition of the ACH130 in a collaboration with the British car marque, with seven of 2021’s 14 sales of the variant made to customers in those two countries. Why has this product proved so successful in that region?
The concentration of clients and the network of clients, how much they know each other in New Zealand, it’s very specific. First, it’s the country that has more helicopters per capita in the world. The number is quite important, but it’s quite concentrated because the country is rather small, so they pretty much know each other, and we had a kind of domino effect of introducing the first helicopter. When we have a trendsetter who’s buying the product and then showing it in the marketplace, it creates more opportunities for us. This is what we’re always trying to do in all the markets where we’ve been operating. It’s either more or less easy to do depending on the territory. For example, in Sao Paulo, this is also applicable because there’s a huge concentration in the same place of ultra-high-net-worth individuals and they’re all [using] the same centers of maintenance and centers of operation. When you’re tackling the United States or Europe, the territory gets huge, and it is much more difficult to create that effect. You can try to create it in some specific places like the UK, because London is also quite a concentrated place. But you have plenty of customers in the UK, which are not in London.
Q: We’ve heard a lot over the last 18 months about the influx of new customers into private aviation. Have you seen any changes in the types of people you are selling to?
It’s quite difficult to predict the collateral effect of the pandemic in people buying the aircraft. They used to charter aircraft, and the charter demand was so strong that they realized it was better to purchase the asset. What we think is, first, there was a market rebound and the market was growing there. At the same time, it’s not that easy to read why the light-single market didn’t experience the same effect, because the intermediate-single market did benefit a lot. I think people are recognizing the main difference in terms of safety and mission capability that you can have as an intermediate-single aircraft, and it’s most probably the best entry product you can have, but it’s a high-end product in comparison with these small, light helicopters that were already in the marketplace. So, why the market has reacted like this is still a question that I’m trying to figure out.
What we can see is that, generally speaking, we have a great percentage of new customers every year. And it’s very specific to this market segment, because in traditional market segments you have regular clients. These are companies that are here to stay with a long-term strategy, be it oil and gas operators, EMS [emergency medical service] operators; they are in the marketplace for decades, most of them. Maybe there’s newcomers, but most of the clients are, I would say, permanent clients.
It’s constantly moving, but there’s more and more rich people. That’s a fact. For example, last year in the U.S., 50% of the clients in PBA [private and business aviation] were new clients, not renewals. There’s newcomers—new people interested in aviation, new fortunes emerging. Information from [analysts] Wealth-X is that there will be 25% more ultra-high-net-worth individuals in the world. And if they are in countries where the ecosystem is there, then they buy helicopters.
Q: Part of that ecosystem you refer to—within which helicopters are not just able to operate but their operations are accepted—is to do with public perception, particularly around noise. Airbus Helicopters has been doing work on technical and operational means of reducing noise, and you argue that your fleet is quieter than your competitors. Is there anything you can do to counter negative perceptions of urban helicopter operations, particularly ahead of UAM platforms becoming operational?
It’s perception and subjectivity, and it’s different depending on the cultures in the countries. Not everyone has the same perception, depending on the mission, of how likely I am to accept and tolerate certain numbers of volumes of flights over my head if it is to save lives, or if it is just to transport people as a taxi, or if it is rich people. In today’s helicopter world, we generally operate more in the peripheric areas of cities. Your approach is very important—the interaction with the buildings, because there’s an echo which will be different and will create a different perception.
Q: Do perceptions vary by region?
There’s a certain level of acceptance in Sao Paulo, which you don’t find in Paris, which you find differently in the UK, which you’ll find differently in Dubai, because the people are not culturally set the same way. So, I think the challenges will be different depending on the area we’re talking about, and then you have the visual pollution and the sound pollution. I think one of the biggest challenges UAM will have to face—provided they set the infrastructures and they overcome the regulation issues, et cetera, and they can land in the city—is the noise perception. It will be different because it will be inside the city. And even though you have an electrical engine, you still have the noise created by the blades. And then there is: how many, and how often? What would be the routes? Depending on the technologies developed, it’s not the same. There are many factors that will affect it. From traveling the world with ACH, what I can tell is that the reaction and the perception of people are very different depending on where they live in the world.
Q: How have you been affected by sanctions that may have been imposed on owners of your aircraft following the Russian invasion of Ukraine?
The number one rule is that we apply the sanctions strictly by the book, and there’s no way around this. And there’s a portion of clients which are affected. That’s obvious, both in terms of fleet, because they were owning assets, and also because some of them were expecting deliveries from us. We’re not able to do that anymore for some of them and we have to find new customers sometimes for aircraft where contracts have been terminated, and the supply of parts where they had to be stopped.
Q: And what of the next five years? What do you hope or expect to be looking back on in 2027?
Well, I hope we’ll just confirm our trend and all the good work that we’ve been deploying these last five years. My hope and my expectation is that we continue to create value for customers and that they can perceive more and more value out of our offering. [We want to] continue trying to surprise them, not only with new products or new features in the product, but also in terms of the experience they’re getting in operating and owning an ACH asset. And also, continuing to continuously improve in terms of what is behind the scenes, from the industrial organization that we have to other features—to continue to be even more agile, to do even more things for customers.