Strong Mi-17 Demand Boosts Prices
Strong Mi-17 Demand Boosts Prices
Sep 21, 2010
By Maxim Pyadushkin
MOSCOW — The popularity of the Mil Mi-17 Hip helicopter for operations in Afghanistan is driving up prices for used versions and has created an order surge for manufacturer Russian Helicopters.
About 300 Mil Mi-8MTs (known as Mi-17s in the export market) are deployed in Afghanistan with international coalition forces, private contractors or under U.N. contracts, according to Russian experts. Some Russian companies, such as UTair Aviation, operate Mi-8MTs under U.N. contracts in many other regions.
UTair, which is the largest Russian helo carrier, recently increased its Hip fleet with an order for 40 Mi-171s. Deliveries should be completed this year.
The effect has to been to put pressure on the Russian market, where the Mi-8 remains the most widely used rotorcraft.
HIgh demand
The high demand affects only the latest version of the family, the Mi-8MT, because of its ability to operate in hot and high conditions. Compared with the earlier Mi-8T, the Mi-8MT has more powerful TV3-117 turboshaft engines, a new gearbox, improved tail rotor and control linkage, and extended fuel tanks. These upgrades increased Mi-8MT payload capacity by 1 metric ton as well as the operational ceiling. Production of this version was launched in 1977, but the design received an update in the late 1980s (the Mi-8MTV) for high-altitude operations.
“It is impossible to buy this modification on the pre-owned market,” one Russian helicopter dealer tells AVIATION WEEK.
Two years ago, a pre-owned Mi-8MT could be bought on the Russian market for $4-4.2 million, but now the average price for such rotorcraft is around $6.5 million, he says.
The high demand for Mi-8MTs on the pre-owned market is amplified by the shortage and high price tag for the new rotorcraft. Russian Helicopters, a holding that controls the national helicopter industry, rolled out 139 Hip versions in 2009, and CEO Andrei Shibitov says his production facilities are booked with orders until 2012. For the last three years, the price of the newly assembled Mi-8 rose to $9-10 million from $3.5 million.
However, the price increases could level off as demand in Afghanistan slows. “They will hardly grow further as the current price levels already raise questions about the operational profitability” of using the Mi-17, says Dmitry Ermilov, deputy head of Soyuzavia, a Moscow-based aircraft dealer.
Strong market
Nevertheless, the market is unlikely to collapse if the Afghan conflict ends. Boris Bychkov, director general of Airclaims CIS, projects that demand inside Russia from the oil and gas sector will help ensure long-term demand.
At the beginning of 2010, there were more than 1,159 Mi-8 family helos registered in Russia, comprising almost 55% of the country’s commercial rotorcraft fleet.
Of those, 770 were operational and logged 87% of total flight time of all Russian-made helicopters on the local market during the mid-2008 to mid-2009 period.
Russia has an ample supply of earlier Mi-8 versions, but they have limited applications in Afghanistan and operate mostly in Russia owing to the low power provided by the TV2-117A engines.
Local pre-owned market demand is not large, but Ermilov notes that a rotorcraft assembled in the late 1980s or early 1990s in good condition can be purchased for $1.2-2 million. The operational life of this version is limited to 35 years, although the Mil design bureau can extend it to 40 years in some cases.
Strong market
Nevertheless, the market is unlikely to collapse if the Afghan conflict ends. Boris Bychkov, director general of Airclaims CIS, projects that demand inside Russia from the oil and gas sector will help ensure long-term demand.
At the beginning of 2010, there were more than 1,159 Mi-8 family helos registered in Russia, comprising almost 55% of the country’s commercial rotorcraft fleet.
Of those, 770 were operational and logged 87% of total flight time of all Russian-made helicopters on the local market during the mid-2008 to mid-2009 period.
Russia has an ample supply of earlier Mi-8 versions, but they have limited applications in Afghanistan and operate mostly in Russia owing to the low power provided by the TV2-117A engines.
Local pre-owned market demand is not large, but Ermilov notes that a rotorcraft assembled in the late 1980s or early 1990s in good condition can be purchased for $1.2-2 million. The operational life of this version is limited to 35 years, although the Mil design bureau can extend it to 40 years in some cases.