The merger will help amid low oil prices, but the newly created helicopter company still requires long-term oil price growth to prosper.

For helicopter operators in the oil industry, sustained low prices have made the business environment extremely tough, as oil majors pull back operations around the world to protect investments.

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This has resulted in overcapacity in the helicopter fleet ferrying oil workers from the shore to off-shore oil rigs, causing prices to drop and even the largest players to struggle.

Though the merger between leading players Bristow Group and ERA Group, creating a new company to be called Bristow, is beneficial the new company will remain dependent on oil price growth for long-term sustainability.

The new company will be the largest operator of commercial helicopters, accruing $1.5bn in sales annually and flying a fleet of over 300 aircraft.

Synergies should be relatively easy to come across because of the minimal degree of differentiation between the two companies.

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But with the price of Brent crude hovering around $60 per barrel and still subject to downward pressures, the success of the new company is far from assured.

The merger is still reliant on increased activity from oil majors, which is unlikely to happen soon

Long-term prosperity still depends on oil majors expanding operations again following oil price growth.

Bristow, however, is likely to be made to wait. BP has become the latest oil company to extend asset sales to help maintain shareholder returns. Oil majors Royal Dutch Shell and Exxon Mobil have already done likewise.

Unless oil prices increase, the pattern looks set to continue for the immediate future. Moreover, restarting drilling operations is a lengthy task, meaning a recovery in demand for helicopters will take a while to materialise.

Without an expansion of activity from the oil industry, the impact of the Bristow and ERA merger will be limited, serving mostly as a bulwark against further trouble.

Sales at leading helicopter manufacturer Sikorsky fell dramatically during 2019, suggesting demand for oil services will be down for a while because of the long lead time aircraft orders require.

The relative strength of new company boosts chances of success despite the condition of the oil industry

Though the condition of the oil industry makes business harder for helicopter operators, the financial condition of ERA will help.

The firm is one of the few offshore helicopter companies not to have entered a restructuring process. Rivals CHC Helicopter and PHI have both entered Chapter 11 bankruptcy protection in recent years.

This will help the new Bristow company, at least in the short-term. But the strength of the deal is only relative. Bristow Group has recorded annual losses for the past four years, shedding $336.8m in 2019 and $194.7m the year before that.