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.


 
 

 

Northrop Grumman awarded mission support services contract

The U.S. Army awarded Northrop Grumman a cost-plus-fixed-fee contract, with a potential value of $205 million, to continue providing mission logistics services in support of combat brigades training at the National Training Center in Fort Irwin, Calif. The contract covers one base year and two one-year options. Support will include the full range of mission...
 
 

Lockheed Martin completes operational flight tests of GMLRS alternative warhead

DALLAS, July 28, 2014 /PRNewswire/ –†Lockheed Martin has successfully completed all Developmental Test/Operational Test flight tests for the new Guided Multiple Launch Rocket System Alternative Warhead at White Sands Missile Range, N.M. The DT/OT tests included rockets fired at both mid and long range. All rockets were fired from a High Mobility Artillery Rocket System...
 
 
lm-kmax

Lockheed Martin’s unmanned cargo helicopter team returns from deployment

After lifting more than 4.5 million pounds of cargo and conducting thousands of delivery missions for the U.S. Marine Corps, the Lockheed Martin and Kaman Aerospace Corporation K-MAX cargo unmanned aircraft system has returned ...
 

 

SPEEA files age discrimination charge against Boeing

After months of investigation, the Society of Professional Engineering Employees in Aerospace, IFPTE Local 2001, charged Boeing with age discrimination. Acting on behalf of SPEEA-represented engineers, the union filed the third-party charges July 23 with the Equal Employment Opportunity Commission and the Washington State Human Rights Commission. The evidence is overwhelming that Boeing hatched...
 
 

Commercial jets push Boeing profits up 52 percent

Increased production of passenger jets helped push up Boeing’s profit by 52 percent in the second quarter, topping Wall Street’s expectations. The Chicago-based company said net income increased to $1.65 billion, or $2.24 per share, from $1.09 billion, or $1.41 per share, in the same quarter a year ago. Earnings, adjusted for non-recurring costs, came...
 
 

Comprehensive MEADS network tests demonstrate unmatched plug-and-fight missile defense capabilities

The Medium Extended Air Defense System recently completed a comprehensive system demonstration at Pratica di Mare Air Base near Rome, Italy. The two-week test demonstration included significant first-time events that were observed by several national delegations. “The outstanding result is that we have demonstrated the full range of advanced network capabilities that only MEADS can...
 




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>