MD Helicopters closes on MD902 decision, as new owners mark first year in charge (2024)

MD Helicopters appears to be closing in on a decision regarding the future of its MD902, which could potentially see the manufacturer divest the NOTAR-equipped type.

Chief executive Brad Pedersen says the Arizona-based manufacturer is still “evaluating” options for the MD902 line, including a sale.

MD Helicopters closes on MD902 decision, as new owners mark first year in charge (1)

Source: AirTeamImages

MD Helicopters continues to evaluate options for the MD902 line

And he admits it has received “quite a bit of interest” from potential suitors for the helicopter.“Hopefully, we will have something to announce within the next month or two on that,” he says.

Pedersen says MD also has no plans to bring either of its other NOTAR-equipped helicopters, the MD500N and MD600N, back into production, as “there hasn’t been the market demand”.

In the meantime, MD will continue to support the in-service fleet, he says, and has just secured new suppliers for the tailboom and fan blades.

Pedersen took over as chief executive in August 2022, as the company emerged from bankruptcy protection and restructuring under new ownership.

He sees solid progress against MD’s targets in the 14 months since the ownership change, including an overhaul of its services and support provision, a multi-million-dollar investment in a core range of spare parts, and the signature of long-term supplier agreements. A strengthened management team has also been put in place.

“Our main focus was to profitably grow MD, bring back some stability, bring back some reliability – make sure the industry and the customer base knows we are here for the long run.”

The airframer has also seen commercial momentum, securing 30 orders so far this year. Deliveries of light-single MD500-series helicopters – the company’s only in-production type – should hit 20 units in 2023, rising to 22-26 aircraft next year.

Pedersen has a longer-term target to hit a rate of 50 helicopters per year; while it will be a “little bit harder” to achieve that output in 2025, he is confident that “in 2026 and beyond I think we can do that”.

MD Helicopters closes on MD902 decision, as new owners mark first year in charge (2)

Source: MD Helicopters

Military sales continue to dominate backlog

The military Cayuse Warrior range currently dominates the backlog – bolstered by a recent commitment from Nigeria for 12 units of the guided weapon-equipped Plus variant – leading orders for the civil MD530F by a ratio of around 3:1.

Explaining the continued popularity of the type for military buyers, Pedersen adds: “Our helicopter is designed from the start to be a military aircraft, it gives a lot of advantages over some of the commercial guys that just put guns and rockets on.”

MD has already this year revealed an engine upgrade programme for the MD520N in collaboration with Columbia Helicopters to boost hot-and-high performance and there are additional product upgrades in the pipeline, he says.

While it plans to reveal more details at next February’s HAI Heli-Expo show, Pedersen says there is focus on several areas.

“We are looking at anything that gives more useful load to our customers. Anything that can improve the reliability, anything that reduces the direct operating costs, that type of thing.

“And you know we don’t compete well with the [Bell] 407GXI or the [Airbus Helicopters] H125 and some other types and we are seriously evaluating how we can do better at that.”

But for the moment, MD has ruled out any clean-sheet development, largely on cost grounds, says Pedersen.

“We are not in a position right now to go with a clean-sheet helicopter, or, you know, move into the light-twin or medium-twin [segments].

“MD is not in a position to do that financially but there are a lot things we can do to grow in our market.”

In the longer term, a new model could be a possibility, however: “I would love to see a larger portfolio of aircraft,” he adds.

MD Helicopters closes on MD902 decision, as new owners mark first year in charge (3)

Source: MD Helicopters

Airframer has no plans to restart production of NOTAR-equipped MD530N

But for now, MD will focus on the long-light-single segment, as it bids to keep the MD500-series relevant well into the coming decades.

“There are a lot of customers out there where the value or the benefit of having a reliable, economical, single-engined aircraft is going to be around for a long, long time.”

However, he says he does not know the long-term plans of MD’s owners – Bardin Hill, MBIA Insurance and MB Global Partners, debt holders who emerged in control of the firm following its restructure.

“They have their own strategy,” he says. “They came into this business through a bankruptcy, but they are convinced it’s a great company and it’s a growing company.”

Pedersen is an industry veteran with three previous company restructurings under his belt. Although cautioning that a business turnaround is not achieved overnight, he adds: “I think we are well on our way.”

MD Helicopters closes on MD902 decision, as new owners mark first year in charge (2024)
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