Press Release

Issued by Asian Sky Group.

March 1, 2016

Asian Sky Group (ASG) released its highly anticipated Asia-Pacific Civic Helicopter Year End 2015 Fleet Report today at the HAI Heli-Expo Show in Louisville, Kentucky. The thirrd edition of ASG's annual civil helicopter fleet report covers the Asia Pacific region for the second time and now also includes the India, Australia and New Zealand markets. The report provides the most comprehensive coverage and breakdown of the civil helicopter fleet in the Asia Pacific region.

Report Summary:

- At the end of 2015, the Asia Pacific civil helicopter fleet numbered 6,015 helicopters in active service, an increase of 4.5% over year end 2014.

- As with 2014, the growth leader in percentage and number of units was China, with 20% growth and 118 helicopters added by year end 2015. This, however, represented a slowdown compared with 2014, when growth was 31% and 135 helicopters were added. Overall, of the 34 markets analyzed in this report, only a third experienced growth in 2015, with the other two thirds either contracting or remaining stagnant.

- The Asia Pacific region is currently dominated by four countries and three manufacturers: with 73% of the helicopter fleet based in Australia, New Zealand, Japan and China, and 78% of those units being either a Robinson, Airbus Helicopters or Bell Helicopter.

- In terms of replacement cost, the “big four” OEMs (Airbus Helicopters, Bell Helicopter, Sikorsky and AgustaWestland) make up nearly 90% of the market, with Airbus Helicopters leading at 46% and the other three combining for 42%.

- Australia represents the largest market overall and is the largest market for Robinson and Bell Helicopter. In terms of unit numbers, New Zealand is next, and is the largest market for MD Helicopters. These are followed by Japan, which is the largest market for AgustaWestland and Airbus Helicopters, and finally China, the fastest growing market overall and the largest for Sikorsky.

- In terms of units, approximately 45% of the Asia Pacific fleet operates in a multi-mission role, followed by corporate or private missions at 28%, and offshore operations at 6%; though in terms of replacement cost, offshore operations make up approximately 20% of the market.

Offshore Activity

The downturn in oil prices significantly impacted the Asia Pacific region in 2015. In previous years, offshore oil and gas service providers were one of the main growth drivers for the region, however in 2015 there was limited to zero growth, and overall utilisation of the existing offshore fleet came down significantly, with nearly a third of the existing fleet likely idle or preparing for another mission role at year end.

Greater China

Growth slowed in 2015 due a number of factors including the overall economic environment, expected currency depreciation, the downturn in oil and gas activity, negative sentiment resulting from certain government actions, and airspace taking longer to open up than previously anticipated. China will continue to see growth in the number of helicopters delivered during 2016 however, but at a much more moderate pace compared to prior years.

Japan

The Japanese fleet contracted 3% in 2015, with only Sikorsky and AgustaWestland showing increases. This occurred due to greater numbers of older piston, single engine and medium size helicopters either being retired or replaced by fewer but newer helicopter models like the S-76D and AW139. The net decrease was 20 helicopters, though the overall market size grew in terms of replacement cost.

South Korea

Despite its advanced aviation industry, there has been only moderate growth in the Korean fleet over the past few years, with 2015 being no exception at just 2%. The largest portion of the fleet is used in a multi-mission role, with 50% used in firefighting operations and being primarily Kamov and Mil helicopters.

India

India saw limited growth in 2015 compared to expectations, but new regulations from the DGAC aimed specifically at the helicopter market could spur growth in 2016. The Indian helicopter market is also sensitive to the oil and gas business, which will continue to impact fleet growth and utilisation.

Thailand

The net increase of only one helicopter in 2015 was predominantly the result of importation restrictions on helicopters older than five years, while the oil and gas market and political factors also contributed to slower growth.

Philippines

Growth in 2015 was a healthy 8% with 14 net helicopters added, which mostly consisted of single and piston categories operated by individuals or corporations. The upcoming elections in May 2016 will play a significant factor in the country's helicopter market, as will overall economic conditions.

Malaysia

The fleet contracted slightly in 2015, which was expected given that nearly a third of the total fleet is configured for offshore oil and gas support. Malaysian offshore operators faced significant challenges during the later part 2015, and will likely attempt to move into other missions or other countries in 2016.

Indonesia

Growth in 2015 was almost 8% with 14 net helicopters added to the fleet. However, new regulations restricting in-service helicopters to under 30 years of age and new imported helicopters to under five years of age, combined with the downturn in offshore oil and gas, may cause growth in the fleet to stagnate in 2016.

Australia

The fleet grew at just a modest 3% in 2015, but is not expected to grow further in 2016 due to the negative impact of a significantly weakened Australian dollar, the rapid decrease in mineral exports and the downturn in oil and gas prices. The country has a staggering 1,017 operators, including many individuals and corporations, with an average of two helicopters per operator (one of which on average is a Robinson), and many of them are very sensitive to changes in the economic conditions and currency movements.

New Zealand

Growth was a healthy 7% in 2015, with a net 53 helicopters added to the market. Pre-owned helicopters made up 81% of the additions which is characteristic of the New Zealand market. New Zealand has the largest fleet of MD helicopters in Asia Pacific, most of which are utilised for multi-mission operations.

Papua New Guinea

The fleet grew 9% in 2015. A typical PNG helicopter can be characterised as pre-owned, aging, and a single-engine turbine from either Bell Helicopter or Airbus Helicopters, and engaged in multi-mission applications. However this profile may begin to change in 2016, with several new helicopters already set to deliver.

For copies of all of ASG's various industry reports, please visit ASG's Media section at http://asianskygroup.com/media-reports.