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.


 
 

 
Air Force photograph by Rick Goodfriend

B61 undergoes testing in AEDC wind tunnel

Air Force photograph by Rick Goodfriend Arnold Engineering Development Complex engineers recently joined researchers with Sandia National Laboratories to perform a wind tunnel test on a full-scale mock-up B61. Pictured with the...
 
 

Ingalls Shipbuilding awarded $23.5 million LHA 8 affordability contract

Huntington Ingalls Industries’ Ingalls Shipbuilding division has been awarded an affordability design contract for $23.5 million for early industry involvement to reduce the construction and life-cycle cost for the amphibious assault ship LHA 8. “Ingalls Shipbuilding has been constructing large-deck amphibious ships for nearly 50 years, and this contract will build on our company...
 
 

Lockheed Martin on team to provide ISS mission planning support

As part of an SGT, Inc.-led team, Lockheed Martin will provide mission and flight crew operations support to NASA for the International Space Station and future human space exploration. These support services within the Integrated Mission Operations Contract II are critical to the safe operation of all NASA human spaceflight missions. Under IMOC II, Lockheed...
 

 
boeing-israel

Boeing, Jordache’s MG Aviation finalize order for two 787-9 Dreamliners

Boeing and MG Aviation Limited July 16 finalized an order for two additional 787-9 Dreamliners, valued at $499 million at current list prices. The order will support the leasing company’s growing fleet of modern airplanes...
 
 

ASL Aviation Group to procure LM-100J freighters

ASL Aviation Group signed a Letter of Intent with Lockheed Martin to order up to 10 LM-100J commercial freighters during a ceremony in Farnborough, England, July 16. The LM-100J is the civil-certified version of Lockheed Martin’s proven C-130J Super Hercules and is an updated version of the L-100 (or L-382) cargo aircraft. Safair — an...
 
 

ATK, Alenia Aermacchi complete testing on Italian Air Force C-27J

ATK has announced that the ATK and Finmeccanica-Alenia Aermacchi have successfully completed the first phase of ground and flight testing of the fully configured multi-mission MC-27J tactical transport aircraft with the support of the Italian Air Force. The series of tests exceeded all test objectives and demonstrated the accuracy of ATK’s side-mounted GAU-23 30mm cannon....
 




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>