Between now and 2022, an estimated 10 308 civil rotorcraft worth $60.3 billion will be sold, while 5 818 military machines worth $132.8 billion will be sold, according to a Teal Group analysis.
The Group released their annual world rotorcraft overview last week in London, covering all turbine-powered machines, including helicopters and tilt rotors. The numbers cover all models built in Western Producer countries, including remanufactured machines, while the analysis discusses Chinese, East European and ex-Soviet models.
“Despite the challenges associated with a falling US defence market, these numbers represent respectable growth (41.1%) over the previous ten years (2003-2012), when production totaled 11,275 machines worth $136.9 billion (comprising $92.1 billion military market and $44.8 billion civil market). These figures are also in 2013 dollars,” said Richard Aboulafia, Teal Group Vice President – Analysis and author of World Military & Civil Aircraft Briefing, in which the World Rotorcraft Overview is published.
Teal Group’s world rotorcraft forecast numbers understate the actual size and importance of this market, said Aboulafia. Very high levels of utilization in tough operating environments, coupled with aging fleets, mean strong and profitable aftermarket work for the prime contractors.
“There’s also heavy upgrade activity – our numbers cover some of the more extensive rebuilds,” said Aboulafia, “but there’s considerable work that isn’t captured in our forecast.”
There are five major prime contractors in the industry (AgustaWestland, Bell, Boeing, Eurocopter and Sikorsky). “They will hold over 96% of the market by value during our forecast period (excluding undecided competitions),” said Aboulafia.? “Very high barriers to market entry remain firmly in place, with only Korea Aerospace establishing any kind of new market presence,” he said. “We also have Robinson’s R66 light turbine helicopter. Since our forecast excludes piston engined helicopters, this model represents Robinson’s sole presence in our numbers.”
Teal Group’s new world rotorcraft overview finds that further industrial consolidation would be very difficult. Uncertain product valuations, European and US techno-nationalism, and divergent corporate strategies rule out any further serious consolidation for now.
“High profits constitute another barrier to consolidation – this business is quite profitable,” said Aboulafia, “so nobody really wants to sell their rotorcraft industry assets.”
The Teal Group study finds that US companies will continue to dominate the military side of the industry, particularly due to relatively high levels of US defence spending. Boeing and Sikorsky look set to maintain their long-running dominant market positions.
“However, we are expecting US primes to come under increasing and severe pressure, as their home market ramps down in the second half of our forecast,” said Aboulafia.
The study finds Eurocopter is poised to remain the civil leader, with the broadest product portfolio and most aggressive market presence.
AgustaWestland is in second place, thanks to the very successful AW139 and the A109 (to be followed by the AW169, and the AW189). AgustaWestland will also grow slightly with its custody of the 609 tilt rotor.
“Bell’s renewed investment in the civil segment may start to pay dividends after a few stumbles,” said Aboulafia, “particularly as the 525 Relentless comes on line. But for now, Bell is in third place in the civil market.”