Big market for helicopter systems – report

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This November, the business consulting firm Frost & Sullivan released a study that assesses the global helicopter’s systems market. The study aims at identifying key trends in this market and estimating valuation for different end users.

One of the most relevant market aspects is that given the current economic environment, especially in the military field, customers are more and more cost-oriented. According to Alix Leboulanger, Lead Research Programme Manager for Helicopters at Frost & Sullivan, these systems indeed allow customers “to overcome budget constraints and optimization plans” as they fill the gap among the fleet with different kinds (and ages) of helicopters. Besides, these systems enhance platform performance and reliability and increase mission efficiency rates while reducing maintenance costs.

End users perceive systems as a gamechanger, enabling them to increase platform performance endurance and payload, hence broadening mission ranges and financial efficiency. As a consequence, the global helicopter systems market is expected to record a compound annual growth rate (CAGR) of 3.4% and should represent a global market size of $63.86 bn between 2012 and 2022.

Helicopter systems offered a total market size of $4.43 bn in 2012 with avionics largely number one within this market, both for new platform procurements and upgrades and modernization programs. Frost & Sullivan’s forecast by end users estimates that mission systems for military and parapublic operations will perform increasingly demanding missions in hostile areas and will gain market shares against the commercial segment, to represent 87.8% of the total revenue by 2022.

Military platform procurements accounted for almost 74% of the total platform market in 2012 and the on-going upgrade programs, systems for military helicopters accounted for $3.85bn in 2012. And according to Frost & Sullivan, due to the military helicopter fleet renewal cycle and new advanced complex mission systems, revenue opportunities will be largely concentrated within the military helicopter segment.

The global fleet renewal cycle is also a significant driver that stimulates the helicopter systems market growth. The total market for new procurements is estimated at $303.40bn for the period 2012 to 2022 and the total helicopter systems are expected to account for 17.3% of this.

In terms of demand trend, most accessible opportunities are anticipated across new platform procurements, accounting for 76.9% of the market due to on-going procurements in the Asia-Pacific and Central Asia. Mid-life upgrades are estimated to account for 23.1% of the total market size, with strong market potential in North America, Europe, and Latin America.

Meanwhile parapublic end users are willing to increase their capabilities, with a total cumulated revenues forecast reaching $2.78bn. Commercial helicopter systems market opportunities will raise at a Compound Annual Growth Rate of 2.0% from 2012 to 2022.

Frost & Sullivan analysts also forecast that avionics will remain the most attractive and competitive segment for the next 10 years due to a digital transition, closely followed by weapon systems. Interest for mission and vehicle systems is expected to be stronger from the medium term onward and both market segments will rise at CAGRs of 3.5% and 3.3%, respectively.

Last but not least, Frost & Sullivan ends its study with three main predictions: 1. Systems features change linked to the arrival of platforms such as fixed-wing helicopters and all-electric rotorcraft will lead helicopter and systems OEMs to closer collaboration. 2. Two-way data-link use between helicopters and airborne-controlled UAVs development will be led by parapublic end users, because of civilian drone integration. 3. Due to their systems’ expertise, western systems OEMs will lead the market, as emerging OEMs will still experience mistrust for their systems on the market.

Republished with permission from ADIT – The Bulletin.