Business

December 18, 2013

Military helo industry to decline by almost half, civil market flourishes

As Department of Defense budgets tighten, military services will be forced to spend less on helicopters.

The declining budget is also driving trends of upgrading and remanufacturing existing platforms rather than funding new helicopter programs.

Conversely, the civil helicopter market has rebounded after the 2008-2009 recession that resulted in a lack of financing to support civil helicopter purchases. The improving U.S. economy has allowed for recapitalization of old aircraft as well as new purchases to support growing demand from industries such as emergency medical services, oil and gas.

Frost & Sullivan finds DOD spent $12.41 billion on military helicopters in 2012 and estimates this to decrease to $6.70 billion in 2018. The U.S. civil helicopter purchases, on the other hand, generated about $0.89 billion in 2012, and this is estimated to increase to $1.07 by 2020.

The need to replace equipment that is worn from years of constant deployment and harsh environments is the top driver in the military helicopter market, while recapitalizing a fleet with an average age of 24 years is what is driving the U.S. civil helicopter market.

“Due to constant use in combat, combat support operations, and humanitarian missions, many existing military airframes will reach their service lives between 2030 and 2040. Some Vietnam Era aircraft, like the CH-47 Chinook and the UH-1 Huey fleets, are nearly 50 years old,” said Frost & Sullivan Aerospace and Defense Senior Industry Analyst Michael Blades. “The civil fleet is not nearly as old as the military fleet, but a lack of used aircraft is driving the sales of new platforms.”

The most significant challenge the U.S. DOD helicopter market faces is future budget constraints and threat of a prolonged period of sequestration. Likewise, though the market is projected to grow, overall uncertainty in the U.S. economy is restraining the country’s civil helicopter market.

“Upgrades and remanufactured platforms will continue to dominate spending for the military helicopter market, and new programs will favor modifying commercial-off-the-shelf aircraft rather than developing aircraft from the ground up,” observed Blades. “In both the civil and military markets, end users will stress on total life cycle costs rather than acquisition costs.”

Therefore, helicopter manufacturers are focusing more on efficiency and ease of maintenance in order to reduce repair costs and logistical tails.




All of this week's top headlines to your email every Friday.


 
 

 

Headlines August 22, 2014

News: GAO: Pentagon violated law with Bergdahl swap - Congressional investigators say the Pentagon violated the law when it swapped five Taliban leaders for Army Sgt. Bowe Bergdahl, who was held prisoner in Afghanistan for five years.   Business: U.S. Air Force issues RFI for new rocket engine - The US Air Force is officially looking into...
 
 

News Briefs August 22, 2014

U.S. military deaths in Afghanistan at 2,200 As of Aug. 20, 2014, at least 2,200 members of the U.S. military had died in Afghanistan as a result of the U.S.-led invasion of Afghanistan in late 2001, according to an Associated Press count. At least 1,821 military service members have died in Afghanistan as a result...
 
 
navair-triton

MQ-4C Tritons to arrive at Pax River this fall

  MQ-4C Triton test air vehicles at Northrop Grumman’s facility in Palmdale, Calif., will fly cross-country to Naval Air Station Patuxent River, Md., this fall. The MQ-4C completed a test flight Aug. 19 with updated ...
 

 
Boeing photograph

Boeing program completes critical design, safety reviews

Boeing photograph Boeing recently completed the Phase Two Spacecraft Safety Review of its Crew Space Transportation-100 spacecraft and the Critical Design Review of its integrated systems, meeting all of the companyís Commerci...
 
 
global-hawk2

Air Combat Command loans Global Hawk to GVCTF

Air Force photograph by Jennifer Romo The 412th Test Wing’s Global Vigilance Combined Test Force received a Global Hawk Block 40 Aug. 6, on loan from Air Combat Command. Tail number 2035, from Grand Forks AFB, N.D., is jo...
 
 

NASA awards program analysis, Control Bridge III Contract

NASA has awarded the Program Analysis and Control III Bridge contract for support services to ASRC Research & Technology Solutions of Beltsville, Md. The cost-plus-fixed-fee, indefinite delivery/indefinite quantity basic contract has a minimum ordering value of $1 million and a maximum ordering value of $37 million, with a performance period beginning Aug. 30 through Feb....
 




0 Comments


Be the first to comment!


Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>