The rotorcraft industry is engulfed in what could be described as “A Tale of Two Markets,” said Raymond Jaworowski, senior aerospace analyst for Forecast International. While opportunities for sales to the civil sector are finally growing after taking a hit post 9/11, the military market will probably shrink over the next decade, he said.
Production of light military helicopters that weigh under 8,000 pounds will likely reduce by half from now until 2023, he said. Production will peak in 2016 with 208 rotorcraft, but will fall to only 55 by 2028.
Over the past year, the two biggest potential competitions for light military helicopters have been cancelled, he said. The Army announced early this year that it would not pursue an armed aerial scout helicopter program to replace the aging Kiowa Warrior. Then, in October, India canceled its light utility helicopter competition.
This changing market landscape means that manufacturers are going to have to rethink their business strategy, he said. “They’ll really look to that civil market to compensate for the loss of military sales.”
With few big sales opportunities in North America and Europe, companies will have to hone in on smaller competitions in the Middle East and Asia, Jaworowski said. They will also have to focus on the aftermarket, including customer support and sustainment.
“Those military rotorcraft that they have produced in recent years are still going to be out there flying, even if they’re not selling new ones,” he said.
Coming out on top of production is Airbus Helicopters, which is expected to manufa
cture 431 helicopters from 2014 to 2028, Jaworowski said. However, most of those are near-term sales of the Tiger attack helicopter — in use by France, Germany, Australia and Spain — and the UH-72 Lakota, which the Army plans to buy to replace TH-67 training helicopters.
“With both of those programs, they’re not going to last that much longer,” he said. “You’ve got the specter of sequestration, which would chop a year or two off of Lakota. But even without sequestration, it would probably only be in production maybe another four or five years.”
“By 2020, Tiger might not be in production unless they pick up some export customers beyond what they have now,” he added.
One glimmer of hope in the U.S. market is an emerging requirement to replace the Navy’s TH-57 training helicopters, which number about 100 units, he said. “There’s really no firm program in place yet, but it seems to be something that might come about over the next couple of years.”
Photo Credit: Airbus Group