Boeing’s booming helicopter business makes up for otherwise grim news in military sales

Defense industry analysts have been sounding alarms about Boeing’srecent troubles in the military sector. The company has been hit by several major program cancellations such as the Army’s future combat systems, a big-ticket spy satellite project and the F-22 fighter.
One bright spot for the company, however, is the helicopter business. In fact the rotorcraft sector is booming, Boeing officials proclaimed during a lunch meeting with reporters yesterday. As of today, the company has a backlog of $12 billion worth of helicopter orders, and it expects that number to climb over the next several years as more foreign countries sign up to acquire the ever-popularChinook, as well as other military choppers.
The CH-47 Chinook has been such a huge seller that Boeing agreed to spend $130 million to expand the production line in Philadelphia. “We are doubling capacity,” says Mark E. Ballew, senior manager for marketing and sales at Boeing. Today the company is able to produce three Chinooks per month, and expects to ramp up to six per month by 2013.
These are not easy birds to make. It takes 30 months just to acquire certain components that have to be custom manufactured for the Chinook and are not available commercially. Once the parts are available, it is a nine-month process to actually build the helicopter, Ballew says.
Vietman came to be known as the “helicopter war.” The same could be said of Iraq and Afghanistan, where troops are highly dependent on helicopters for transportation, logistics and assault missions. The massive Chinook is especially valuable because it can move large amounts of supplies and helps keep vulnerable truck convoys off the roads. The Army first acquired the Chinook in 1962. The early models were 33,000 pounds, while the newest version is much larger, at 54,000 pounds.
In 2003, the Army was planning on ordering only nine Chinooks. Now, the Army expects to buy 452 of the latest CH-47F models, and Special Operations Command has ordered 61 of the MH-47G models. So far Boeing has delivered 81 F variants and 54 G models. The F model is especially coveted by troops in Afghanistan because of its advanced high-tech features such as blue-force tracking and moving maps, and is easier to operate in low-visibility than the older Chinooks, Army officials say. “You can’t get lost if your program the computer,” says Army program manager for cargo helicopters Col. Newman D. Shufflebarger.
The only problem with the F model is that there are so few of them, he says. “We’re 50 aircraft short,” Shufflebarger says. The shortages will continue until 2013. The cost of anew CH-47F is $32 million. The Army also is remanufacturing CH-47D to the F configurations, which is less expensive, at $8.5 million per aircraft.
Ballew says the Chinook’s star role in current wars has drawn the attention of foreign militaries, which also want to acquire the aircraft. The United Kingdom recently announced it wants to buy 22. Two Chinook deals are pending clearance from Congress. The United Arab Emirates and Turkey have asked for 16 and 14 Chinook’s respectively, according tomedia reports. The deals are tentatively priced at $2 billion and $1.2 billion, respectively.

Topics: Aviation, Rotary Wing, Business Trends