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 September 19, 2014

News: McKeon on broader military authorization: Anything can ‘fail or pass’ - Rep. Howard “Buck” McKeon, R-Calif., chairman of the House Armed Services Committee, said if Congress returns after the midterm elections to weigh a broader military authorization for the battle against Islamic State, it might not pass. Defense contractor gets 7 years for giving secrets...
 
 

News Briefs September 19, 2014

U.S. military deaths in Afghanistan at 2,203 As of Sept. 16, 2014, at least 2,203 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 1,823 military service members have died in Afghanistan as a result...
 
 

Pratt & Whitney, U.S. Air Force complete qualification for F135 engine testing

Pratt & Whitney, a United Technologies Corp. , together with its U.S. Air Force partner at the F135 Heavy Maintenance Center at Tinker Air Force Base, Okla., celebrated another significant milestone qualification for F135 engine testing at the Oklahoma City Air Logistics Complex. OC-ALC which in addition to engine testing is also qualified to perform...
 

 
Navy photograph

Triton has first cross-country flight from Palmdale

Northrop Grumman photograph The MQ-4C Triton Unmanned Aircraft System takes off from Northrop Grummanís Palmdale, Calif., facility Sept. 17 for its first cross-country flight to Naval Air Station Patuxent, River, Md. PALMDALE,...
 
 
Air Force photograph by Michael J. Pausic

Future of NATO: Adapting to a new security environment

Air Force photograph by Michael J. Pausic Gen. Phillip Breedlove informs the assembled crowd about the results of the recent NATO Summit and the areas of instability that affect Europe that have regional implications. Seated in...
 
 
Air Force photograph by Scott M. Ash

AFRL commander describes Air Force’s technology vision

Air Force photograph by Scott M. Ash Maj. Gen. Thomas Masiello takes a question from an audience member after discussing Air Force Research Laboratory breakthrough technologies during the 2014 Air Force Association’s Air ...
 




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>