Future of Tilt-Rotor Aircraft Uncertain Despite V-22’s Successes (UPDATED)
Only hours after a devastating earthquake struck Nepal in April, four Marine Corps V-22 Ospreys based in Okinawa, Japan, were in the air and making their way to the disaster zone with crucial supplies.
A half a world away in Fort Worth, Texas, Bell Helicopter that same month announced a second round of layoffs totaling some 1,415 employees, citing a slowdown in orders for the Osprey along with a waning commercial helicopter market that was supposed to take up the slack.
Despite the good news stories emerging as the aircraft chalks up successes in real-world scenarios, foreign military sales for the Osprey have been lower than anticipated, analysts said, raising questions about how long Bell can keep its factory open. The future of vertical take off and landing aircraft is also murky.
Lt. Gen. Jon M. Davis, Marine Corps deputy commandant of aviation, said the V-22 in the earthquake mission was “a phenomenal capability that we got there very, very quickly.”
Once in Nepal, the aircraft flew at an unprecedented 11,000 feet, he said during a speech on Capitol Hill. “They fly 2,000, 3,000, 4,000 miles routinely” when air refueled, he added. Operationally, Marine Corps officials mention speed as one of its most important attributes. The V-22s in Nepal self deployed and were the first on the scene. “They closed in on the objective at 280 miles an hour,” Davis said.
Two new customers have emerged that want to take advantage of what the unique aircraft has to offer. The Navy announced plans in January to purchase 44 Ospreys to replace its fleet of C-2 carrier onboard deliver aircraft, which shuttle personnel and supplies between ships at sea.
Then the program scored its first foreign military contract when the Department of State approved the sale of 17 Ospreys to Japan for its Ground Self-Defense Force’s humanitarian and disaster relief units.
Despite those headlines, the layoffs continued at the plant where Bell produces the Osprey in partnership with Boeing.
Richard Aboulafia, vice president of analysis at the Teal Group, an aerospace consulting firm, said it is hard to see the V-22 production line moving beyond the early 2020s.
“There are a couple of other customers that might pay the kind of premium we’re talking about here, but not many,” he said.
The premium being paid for is $70 million per aircraft. What buyers receive in return is speed. The Marine Corps and U.S. Special Operations Command, the program’s first two customers, have a need to transport troops and equipment quickly and at farther ranges than conventional lift helicopters, he said.
According to a 2014 Teal Group report on the V-22, the program in its early years estimated 400 to 600 foreign sales. “That number now looks quite far fetched,” the report said.
Aboulafia said beyond the Japan sale, Israel looks like it may buy about six of the aircraft. South Korea, the United Arab Emirates and Qatar could also buy V-22s. “It’s hard to imagine other customers emerging,” he said.
The so-called “ownership” cost of flying the V-22, which factors in all expenses and divides it by the number of hours the aircraft flies per year, is more than $83,000 per hour, according to Air Force data obtained by the Project on Government Oversight in 2013. A stripped down calculation of flight cost per hour including fuel, personnel costs and such is about $11,000 per hour, a 2009 Government Accountability Office report said. That is double what the program originally anticipated, the report said.
Aboulafia said the two manufacturers were never able to bring the aircraft’s costs down significantly to make it attractive to foreign buyers. “The cost curve didn’t move much. … We’re probably not going to do better than we see today. It’s just a difficult and expensive plane to build and clearly an expensive plane to operate and pay for.”
The total international market is maybe 40 or 50 Ospreys over the life of the program, with a lot of work and hard effort to make those sales, he said. That would extend the production line only about 18 months, he noted.
The Navy’s C-2 replacement program will also help. It depends on the rate in which the service wants to replace its carrier delivery fleet, he said.
Frost & Sullivan aerospace and defense Senior Industry Analyst Mike Blades had a slightly more optimistic take.
“I think it will be a very long time before the line shuts down. Bell will solicit global customers for the V-22. With special operations becoming the focus of many allies, there will be some buyers. In addition, they will likely look for ways to sell the aircraft/concept for civil use,” he said.
The V-22 has really proven its worth in the special ops arena since it can fly from point to point much faster than a normal helicopter, Blades said. This is especially important in medical evacuation for the “golden hour,” the first crucial minutes after a mishap when a critically wounded patient has the best chance to be saved.
Since it became operational in 2007, the Osprey has used its speed and range in some notable missions. In 2011, it flew behind enemy lines to rescue a downed F-15 pilot in Libya. Military leaders at the time lauded its ability to make it to the pilot significantly quicker than conventional helicopters.
In the aftermath of the 2013 Typhoon Haiyan in the Philippines, Marine Corps Ospreys were able to arrive first on the scene. Once there, they made multiple round-trips per day to staging bases to bring injured survivors to safety.
Bell has been aggressively pursuing the United Kingdom and Singapore for sales, Blades said. Foreign military sales will likely be consistent, but nowhere near the 20 per year Bell needs to keep the factory running at full capacity, he added. There might be about five to 10 Ospreys being manufactured each year, he said.
“First, Israel wants six V-22s for special ops. There is additional interest from South Korea, but the recent V-22 crash during an exercise and the resulting investigation could have ramifications on future sales,” Blades said.
In May, an Osprey aircraft participating in a training exercise at Waimanalo, Oahu, Hawaii, had a hard landing and caught on fire. Two Marines were killed, and 20 injured.
Aboulafia said headlines — good or bad — are unlikely to persuade foreign militaries to buy the V-22. Ultimately, it will come down to their decision on whether the aircraft is worth the high price tag.
“Most foreign customers, they’re not scared by crashes or headlines. They have a fairly rigorous approach to value-for-money and strategic requirements,” he said. The program had developmental difficulties, he added, but that is in the past for most customers.
“I’m sure there were people out there who said, ‘This isn’t going to work,’ but they were a tiny minority. It didn’t make a big difference in the program’s market appeal,” Aboulafia added.
The C-2 replacement “was a real boost to the program’s survival. If there is a foreign market of any note, it needs a little time to mature so people can think about how they can use it,” he said.
As for Bell-Boeing’s primary customers, the Marine Corps’ number of aircraft acquired will likely hold at 360. Air Force Special Operations Command won’t go beyond 51, the Teal Group report estimated.
If the line goes cold, what’s next for vertical take-off and landing aircraft?
The Teal Group report said there will be plenty of work and opportunities keeping the fleet of some 458 Ospreys built over the lifetime of the program in the air. There is already talk of a re-engine program for the early models.
Bell in 2014 announced its concept for a new VTOL aircraft, the V-280 Valor. The company brought a mock-up to at least two recent trade shows and call it the “future of vertical lift.”
This smaller version of the Osprey is projected to fly at 280 knots, at a range of 500 to 800 nautical miles and have a useful carrying capacity of 12,000 pounds, or a crew of four and 14 passengers and their equipment.
Its intended market is the Army’s future vertical lift and the joint multi-role programs.
“Bell needs to keep that [V-22] line open until the winner of the FVL is announced,” Blades said. They would manufacture the V-280 at the Fort Worth plant if they win the contract, however, this program is not expected to be underway until the next decade, he said.
Blades did see a potential commercial market for VTOL aircraft emerging.
“The only VTOL opportunities may reside in optionally manned vehicles for cargo transport in the military and civil markets,” he said.
“Oil and gas would be obvious players, but after the sector recovers. The VTOL aspect, with the fixed wing aircraft speed, could be marketed for medevac and search and rescue missions. However, operating costs would need to come down considerably,” he said.
“That’s where V-280 development needs to focus; reliability while reducing the logistics tail and making the aircraft easy to maintain. If they can demonstrate lifecycle costs equal to, or just slightly higher, than a similar sized helicopter they will find demand,” Blades predicted.
Aboulafia, who is skeptical the future vertical lift program will come to fruition, said he doubted that the Army program will pay the premium for VTOL technology.
Special Operations Command and the Marines are the two services that are willing to make the tradeoff between speed and range and lift capacity.
“The Army is the biggest helicopter customer in the world and I’m not so sure it has done the proper trade studies of cost, range and capacity,” he said.
It will probably find that the best it is going to do is a 1.4 multiplier. In other words, if it pays a 40 percent cost premium for VTOL features, it’s getting 40 percent less in lift capacity.
“The Army isn’t about range, it’s about lift,” he said.
For example, the Marines are acquiring hundreds of V-22s. “How much lift are they getting for that? Not a lot,” he said. The service is still buying 200 CH-53K King Stallions, a conventional helicopter, to do the bulk of its lift requirements.
A Bell Helicopter spokesman was unable to respond to requests for comment.
Clarification: Story clarifies how different flight costs per hour statistics for V-22 are calculated.