Boeing Co. (BA), Sikorsky, Eurocopter and Bell (TEXTRON), the top four helicopter makers, are focused on Asia as 1,000 orders from states spanning India to Korea are set to make it the fastest growing military-chopper market by 2015.
Tenders in half a dozen nations should produce sales worth $10 billion over the next three years, Norbert Ducrot, executive vice president for the Asia-Pacific region at Eurocopter, the world’s No. 1 manufacturer of rotorcraft, said in an interview.
“Asia has the ingredients to grow into one of the largest markets worldwide,” said Christophe Nurit, regional vice president at Sikorsky, a United Technologies Corp. unit that’s the No. 1 maker of military helicopters. Key bids include naval tenders in Korea and India, for which the company is pitching its Seahawk antisubmarine model, a version of the Black Hawk.
Asian military spending rose 14 percent last year, funded by the world’s fastest growing regional economy. The helicopter market is surging as nations race to replace aging western, Soviet and home-grown models, led by emerging powers seeking the means to extend their military reach, according to Craig Caffrey, a defense analyst at IHS Jane’s DS Forecast in London.
“In China and India the market is being driven by attempts to improve the mobility of their ground forces, which requires the procurement of large quantities of tactical transport helicopters,” said Caffrey, adding that Asia represents “one of the most open and diverse” markets for the aircraft.
While the U.S. will remain the biggest military-helicopter market over the next decade, its share of sales will dip from 50 percent to 38 percent, with the exit from Iraq last year and a withdrawal from Afghanistan planned for 2014 likely to “signal a damping in demand,” according to London-based Visiongain.
At the same time, South Korea will jump from ninth in the world to second, displacing the U.K., India to third from fourth and China to seventh from 13th as its market doubles, led by attack helicopters, the forecaster said in a report on Feb. 6.
“There’s a bubble of activity,” said Douglas Barrie, an analyst at the International Institute for Strategic Studies in London. “Rotary-wing procurement doesn’t tend to be high on must-have lists, so there’s also an element of this having been deferred to the point where things really need updating.”
Competition intensified last week in Singapore, with major manufacturers pushing their products at the last major air show before a series of contract announcements begins with an Indian order for 197 light helicopters valued at about $1.5 billion.
Eurocopter (EAD), based in Marignane, France, is offering its AS550 C3 Fennec in the competition to replace aging Aloutte models built by predecessor Sud Aviation, which sold its first helicopter in Asia in 1962. Russian Helicopters, formed to consolidate the country’s rotorcraft industry, is offering the Kamov Ka-226 -- which has the NATO reporting name ‘Hoodlum’ -- with a winner to be declared in March or April, Ducrot said.
India, whose existing chopper fleet is dominated by Soviet models, also has a contest underway for 55 naval helicopters, worth $2.2 billion, for which Eurocopter is pitching the NH90 against Sikorsky’s Seahawk and Textron Inc. (TXT)’s Bell 429.
The south Asian nation is also seeking 22 attack choppers in a tender for which Chicago-based Boeing says its AH-64 Apache has been selected as preferred bidder over the Russian Mil Mi-28 Havoc, together with 15 heavy-lift models that have attracted proposals from the Boeing Ch-47 Chinook and the Mi-26 Halo.
Boeing is offering the Chinook model used in Afghanistan, defense spokesman Hal Klopper said. That may enhance its credentials for operation in the Himalayas, where Indian and Pakistani forces are ranged against each other at high altitude.
With India also due to issue proposals for coastguard helicopters this year, “there are potential tenders for all the armed forces,” said Ducrot at Eurocopter, a unit of European Aeronautic, Defence & Space Co. which lifted revenue 13 percent last year a record 5.4 billion euros ($7 billion).
The surge in Asian helicopter purchases mirrors a jump in combat-plane orders led by an $11 billion Indian contract for 126 fighters, the biggest in years, provisionally awarded to Paris-based Dassault Aviation SA (AM)’s Rafale last month.
Lockheed Martin Corp. (LMT), the world’s biggest defense company, won a deal to supply 42 F-35 Joint Strike Fighters to Japan on Dec. 20 and is competing with Boeing, Eurofighter GmbH and Saab AB for a $7 billion, 60-plane contract from South Korea.
Korea’s chopper requirements are led by the $1.5 billion AH-X tender for 36 attack helicopters, which pits the Apache against Eurocopter’s EC665 Tiger and the Bell AH-1Z, a twin- engine variant of the Cobra series known as the Viper.
Proposals are due to be submitted in May, Jeffrey Lowinger, Bell’s executive vice president for engineering, said at the Singapore show, adding that Asia’s “tremendous growth” is spurring interest in a range of products, including the Bell- Boeing V-22 Osprey “tiltrotor,” which can also fly like a plane.
Sikorsky (UTX)’s Nurit said in Singapore that Korea is also poised to request tenders for an antisubmarine contract which the company is “actively pursuing” with the Seahawk.
Among other bids, Eurocopter’s Tiger is competing for a Malaysian contract, and the company is promoting the NH90 and EC725 Super Cougar to Singapore as replacements for 30 of its Super Puma transport choppers purchased in 1985. The EC725 is also competing for a six-aircraft Indonesian order, Ducrot said.
Successful Asian bids generally require local partnerships, he said, with Eurocopter manufacturing the NH90 in Australia, the Super Puma in Indonesia and teamed with Korea Aerospace Industries Ltd. (047810) to develop the KAI Surion utility helicopter, for which South Korea placed 250 orders last year and which could be qualified for export to Europe from July onwards.