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Saturday, January 1, 2005

Rotorcraft Report: Military Rotorcraft Production on the Rise

MILITARY

Military Rotorcraft Production on the Rise

Nearly 5,500 military aircraft worth about $84 billion will be built or undergo major upgrades over the next decade, Forecast International says in a new study.

The Newton, Conn.-based market aerospace and defense analysis firm estimates that Western helicopter manufacturers will produce 5,448 new or upgraded rotorcraft in the 10 years ending Dec. 31, 2003. Of that total, Forecast International expects slightly more than 30 percent, or 1,668 aircraft, will be the products of major modification programs such as the U.S. Army's Boeing AH-64D and Sikorsky UH-60M upgrades. The remaining 3,780 aircraft projected to be built will be new-production rotorcraft. The projections are contained in Forecast International's latest study, "The World Market for Military Rotorcraft."

The firm estimates the total value of rotorcraft production through 2013 at $84 billion, with modification products accounting for roughly $14.3 billion of that.

While rotorcraft production will increase over the decade, the firm says, the value of the aircraft produced will outpace the production increase. "This is due to an increasing proportion of relatively expensive rotorcraft in the annual mix," such as the Bell/Boeing V-22, the study says.

Forecast International expects Sikorsky, with its newly acquired subsidiary Schweizer, to be the market leader both in unit production and production value. Sikorsky's acquisition of Schweizer gives it with an enhanced presence in the light helicopter market and the unmanned aerial vehicle market.

The Stratford, Conn.-based company should produce 1,237 military helicopters worth roughly $20.6 billion. Boeing would come in second, producing 983 rotorcraft valued at $12.9 billion through 2013. Eurocopter, with its subsidiary Australian Aerospace, would follow with 554 aircraft produced. That total includes production by the NH Industries consortium, in which Eurocopter is a leading participant, Forecast International said.

"In terms of production value," the firm said, "the Bell/Boeing V-22 tilt-rotor aircraft partnership is expected to be second to Sikorsky, with $18.3 billion."

Boeing's production is dependent on major modification programs. This is particularly so for Boeing. "More than 80 percent of the projected military rotorcraft output at Boeing during the next 10 years is expected to be remanufactured rotorcraft," the study says.

Mod programs make up an important part of Sikorsky's future production, but that company is not as dependent on them.

Forecast International said the military market might see further consolidation, citing the possibility that AgustaWestland, which "is currently in a state of transition, with co-owner Finmeccanica in the process of acquiring GKN's 50 percent stake in the joint venture," possibly merging with Bell Helicopter Textron. It also speculated that Lockheed and Northrop Grumman, neither of which currently manufacturers rotorcraft, "could eventually decide to acquire a rotorcraft manufacturer."

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