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 15, 2014

News: Navy identifies pilot presumed dead in crash - A Navy fighter pilot presumed dead after two fighter jets crashed in the far western Pacific Ocean has been identified.   Business: Boeing eyes 737-700 solution for new JSTARS - Boeing is officially planning a variant of its 737-700 commercial jetliner as a competitor for the Air Force’s...
 
 

News Briefs September 15, 2014

Australia contributing planes for anti-IS campaign Australia is preparing to contribute 600 troops and up to 10 military aircraft to the increasingly aggressive campaign against the Islamic State extremists in Syria and Iraq, Prime Minister Tony Abbott said Sept. 14. Abbott said Australia was responding to a formal request from the United States for specific...
 
 
Courtesy graphic

Lockheed Martin conducts flight tests of aircraft laser turret for DARPA

AFRL photograph The Aero-adaptive Aero-optic Beam Control turret that Lockheed Martin is developing for the Defense Advanced Research Projects Agency and the Air Force Research Laboratory has completed initial flight testing. T...
 

 

Lockheed Martin advances live, virtual, constructive training in flight test

https://www.youtube.com/watch?feature=player_embedded&v=jvXmOW8L3mU Lockheed Martin successfully tested a new solution for integrated live, virtual and constructive training during a flight demonstration at the company’s Aeronautics facility in Fort Worth, Texas. During the flight test, a pilot flying in a live F-16 engaged in a synthetic training exercise with a pilot flying as wing...
 
 
Image courtesy of NASA/JPL-Caltech/Univ. of Arizona

NASA’s Mars Curiosity rover arrives at Martian mountain

NASA’s Mars Curiosity rover has reached the Red Planet’s Mount Sharp, a Mount-Rainier-size mountain at the center of the vast Gale Crater and the rover mission’s long-term prime destination. “Curiosity n...
 
 

Raytheon begins full rate production on TALON Laser Guided Rockets

Under a $117 million contract awarded to Raytheon, Raytheon Missile Systems has begun production of the TALON Laser Guided Rocket. In 2013, the Armed Forces General Headquarters of the United Arab Emirates awarded Tawazun a contract to procure the TALON Laser Guided Rocket. “Full rate production of the TALON LGR is a significant milestone for...
 




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>