More affordable, versatile helicopters will shrink military demand – report

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Military platforms continue to dominate the global helicopter market. However, this dominance is expected to be reduced as platforms become more capable and Ministries of Defence (MoDs) look for commonality with existing fleets to save on maintenance costs and improve platform availability, according to Frost & Sullivan.

The company added that to a lesser extent, similar trends will be witnessed across the civil helicopter market, where end users exhibit a preference for life extension programmes.

Earlier this year Forecast International predicted a downturn in the military helicopter market that will last for several years. The company said that 4,384 medium- to heavy-lift military rotorcraft worth $104 billion will be built during the next 10 years.

Forecast International predicted that annual production of medium and heavy military rotorcraft will fall from 512 helicopters in 2012 to about 399 in 2017. The company predicted production levels will rise slightly in 2018, but then continue to fall.

The company predicted a total production of only 376 military helicopters in 2021. Forecast said US manufacturer Sikorsky is expected to lead the market with its venerable UH-60 Black Hawk series aircraft, which is primarily used by the US Army.
“Financial uncertainty and reduced defence spending will encourage end-users to remanufacture and upgrade existing platforms, rather than acquire new helicopters,” noted Frost & Sullivan Aerospace & Defence Research Analyst Alix Leboulanger. “This trend will be particularly evident across Europe and North America, traditionally the largest helicopter markets.”

New platforms procurement programmes will be driven primarily by the demand for multi-capable helicopters, with reduced logistic footprints and more environment-friendly designs, Frost & Sullivan said.

The need for utility helicopters will intensify, as these platforms become increasingly versatile. This will be the case, for instance, in the commercial offshore aviation segment – the most demanding sector in the commercial helicopter market – where there is a constant need for helicopters that can cover longer distances, without refuelling.

Despite ongoing fleet renewals, however, limited budgets will have a profound impact on the helicopter market across all end-user segments.
“In addition to military end-users from Western countries that face austerity measures, the governmental sector which depends heavily on state funding, will also have to deal with budget constraints,” explained Leboulanger. “To aggravate the situation, business aviation and commercial operators are also expected to be affected by shrinking spending power, while being hit with higher fuel taxes and insurance costs.”

Original equipment manufacturers (OEMs) will need to focus on developing new platforms with cutting-edge improvements that support greater efficiency, but at lower life-cycle costs. Offering tailored outsourcing maintenance solutions will also help OEMs maintain strong revenue growth, despite the ongoing financial constraints, Frost & Sullivan said.
“Outsourcing models should be promoted as they provide a win-win situation for both OEMs and end users,” advised Leboulanger. “Outsourcing maintenance activities would not only result in shared costs and enhanced platform readiness, but will also be the best approach to tracking the technological weaknesses of platforms and guiding future R&D orientation.”