Global Helicopters Market Opportunities- Platforms, SiS & Systems

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Global Helicopters Market Opportunities- Platforms, SiS & Systems

Flying Out Of Economic Brownouts

Alix Leboulanger, Research AnalystAerospace & Defense

30th October 2013

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Today’s Presenter

Alix Leboulanger,

Research Analyst,

Aerospace and DefenseFrost & Sullivan

Follow me on: @FrostADS

Industry Expertise :

Within the Aerospace and Defense Team based in London, Alix Leboulanger is in charge of conducting extensive research on military and civil helicopters. She has authored several reports and projects focusing on :

Helicopter platforms, new procurements and on-going development programs Helicopter aftermarket support, outsourcing evolution, training solutions, life extension programs and business models analysis

Helicopter airborne systems market demand and supply chain assessment

http://www.linkedin.com/groups/Frost-Sullivans-Aerospace-Defence-Security-4185579

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Is there still an interest for helicopters?

• Shutdown, Sequestration, and Slowdown• Changing CONOPS doctrines • Civilian air fleets evolution

• However:• A $517.25 billion cumulated market size across platforms, systems

and aftermarket support between 2012 and 2022.• Resilient workhorses with so far unmatched VTOL capacities

Source: Frost & Sullivan analysis.

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Agenda

2. What are regional trends and challenges across the helicopter landscape?

1. What are helicopter growth potentials for military, commercial and parapublic end-users?

4. Identifying opportunities across the value-chain, from new procurements, to upgrades, to aftermarket support to next gen systems

3. Insights on end-users preference: What are their key priorities and how are they driving the helicopter system market?

5. Is there still a future for helicopters? The rise of UAVs and OPVs

Questions and Answers


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Helicopter Growth Potentials For Military, Commercial And Parapublic End-users

Drivers

High

Restraints

Military Helicopter Systems Helicopter systems to be a game changer

Current renewal and upgrade cycles of platforms

Commercial Systems Integration costsAllied Troops withdrawals

Decreasing purchase power from budget holders and increasing insurance rates

Parapublic and military platforms availability and shrinking fleet a size

High

Military and Parapublic platforms life extension programs Commercial Platforms increased

modularity


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Regional Trends And Challenges-Platforms

• North America and Europe: • Despite shutdowns and cuts, Is it really all quiet

from the Western side?

• Almost 2,000 platforms to be procured across the commercial segment in North America and more than 1,500 in Europe.

• Asia-Pacific:• 6,645 new helicopters are expected to be

delivered by 2022.

• 19% of them will be used for military multi-missions roles, whereas 24% will be dedicated for business aviation and aerial works.

• Central Asia: • 2,404 platforms will be procured, representing a

total market size of $41.66 billion.

• Military platforms will account for 66% of new procurements, with a specific focus on naval and combat platforms

New Platforms Procurements: Good News To Expect Despite Market Drop After 2018


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• Middle-East: • The $32.21 billion total market will offer almost

as much opportunities across platform procurements than support: SIS to reach $13.46 billion mostly across parapublic and military segments

• Asia-Pacific and Central Asia:• Platforms at their early stages of life cycle

• Russia to offer US$ 4.69Bln of accessible SIS opportunities, 37.50 % of them across the commercial market between 2013 and 2022

• In Asia-Pacific, SIS opportunities to reach a total market size of US$14.88 Billion, with Commercial SIS accounting for $5.73 billion (2013-2022)

• Latin America: • SIS opportunities to reach a total market size of

$10.32 billion, with more than 50% across the military segment

The Quest For More Customized Business Models

Regional Trends And Challenges:Aftermarket Support


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Insights on end-users preference

Budget constraints and ageing fleets are offering addressable opportunities for new airborne systems integration during mid-

life upgrades: a $14.72 billion aggregated market size

New Platforms Procurements By End-users: $ 303.40 Billion between 2012-2022

And their impact on airborne systems: a cumulated market size of $63.86 Billion

Key Drivers

Enhancing situational awareness and tackling CFITs

Increasing mission rate and efficiency

Looking at aircraft interoperability & reducing interferences

Targeting the ‘Plug and Play’ approach

Decreasing Platforms vulnerability


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Competitive Positioning

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 20220%

10%

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100%

AgustaWestland Bell Helicopter

Bell-Boeing Boeing

Denel Eurocopter

Kaman Hindustan Aeronautics Industries

MD Helicopters NH Industries

Russian Helicopters Sikorsky

Others

With a 870 backlogs in 2013, plus 100 platforms to be delivered per year to Russian Forces, Rus-sian Helicopters witnesses the highest growth.

Apart from S-70i strong backlogs and FMS incent-ives attracting European Eastern and Middle Eastern, Sikorsky breakthrough civilian markets will be sustained by Chinese growing market de-mands

In the absence of further military orders, Euro-copter could suffer from Bell and AgustaWestland growing market shares across the civil light plat-form segment, such as AW 139 and Bell SLS

To avoid too much reliance on North American military markets, Bell Helicopter should be advised to in-tensify its presence in Latin America and Middle East

Leading OEMs

As an emerging OEMs, Hindustan Aeronautics not only benefits from Indian defence modernisation plans and strong backlogs, but also Latin American and African countries have started to negotiate new orders

Total Market:US$ 287.86 bln

CAGR: 2.91%

(2012-2022)

Despite significant orders and interests for new AW169, AW198, AgustaWestland will have to reinforce its presence in Central Asia and Asia-Pacific to pursue growth

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Identifying Opportunities Across The Value-chain

The financial constraints create interesting windows of opportunities for outsourcing safety and security services to commercial operators across Western regions.

Developing e-media educational tools for platform and systems based maintenance training

Why transitioning economies are not more buoyant with commercial helicopters?

This is not only about reducing platform TCO, it is also about anticipating local end-users unmet needs, planning to modernize their fleet capabilities and to undertake new missions

Main restraints to slowdown commercial helicopter market penetration in transitioning regions are the lack of infrastructures and skilled personnel shortage

Increasing SIS network and geographic proximity with end-users to reducing maintenance time constraints

Next Steps

But establishing a new maintenance centre may be financially demanding...

Commercial SIS will grow in emerging regions as it is a perceived as a tool to bridge the gap between domestic infrastructures and gaining market knowledge

Next Steps

Offering training solutions with part tasks training devices and computer based scenarios for better future operational awareness (Disaster Relief Management, crowd monitoring etc.)

Next Steps

...Is there a winning strategy for boosting SIS revenues?

1.

2.

Is this then only about maintenance and aftermarket opportunities? 3.

4.

Such aftermarket network across the globe provides a better position to capture MoIs’ outsourcing demands in the next 10 years: Accessibility, Affordability and Responsiveness

Once established, how this network can be leveraged?

But in 2023,.. Is this the end of helicopters?

Next Steps

4.

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Is there still a future for helicopters? The rise of UAVs and OPVs

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Boeing's Airborne Manned/Unmanned System Technology Demonstration : AH-6 Little Unmanned Little Bird-ULB

Kaman unmanned K-MAX multi-mission helicopter, with successful utility work achievements in Afghanistan from 2011 onward

Unmanned Little Bird flying with and fully controlled by one Apache E Guardian 2012

Kiowa Warrior and Apache start to fly with MQ-8 Fire Scout and MQ-1 Grey Eagle UAVs and joint exercises with the US Army

2013201120082004

First Operational Manned/Unmanned Squadron Fleet in the US Navy with Romeos and Fire Scouts

2012

After UH-60 RASCAL tests, U.S. Army Research, Development and Engineering Command's Aviation and Missile Centre and Sikorsky working together on the Optionally Piloted Black Hawk-OPBH program, with terrain-aware autonomy first results in December 2012

Optionally Piloted Vehicle-OPV: Eurocopter integrates unmanned flight capabilities on a EC 145 demonstration vehicle and will carry the tests on further and heavier rotorcraft

What about other manned/unmanned developments from BRIC Countries? Russian military end-users are still hoping for a manned/unmanned Ka-226 version, whereas Chinese OEMs are working on similar programs, such as the U8 maritime helicopter, and others which could be derived from successful V750 experiences and a copy of the S-100 drone.

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Russia

Russian Helicopters’ projects Albatros and Roller expected to be launch in 2015

Europe

PZL Swidnik SA/AgustWestland introduce the SW-4 Solo Rotorcraft Unmanned Air System/Optionally Piloted Helicopter” (RUAS/OPH) prototype

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Strategic Recommendations

Technology & Anticipating NextGens: Helicopter and systems OEMs to collaborate more closely as systems features will drastically change in the future with the appearance of fixed-wing helicopters and all-electric rotorcraft with new battery and speed challenges.

Product & Market Positioning: Parapublic end users to be leading drivers for two-way data-link use between helicopters and airborne-controlled UAVs with the proliferation of civilian drones.

Managing Perception & Competition: Western systems OEMs to maintain their market dominance for the foreseeable future due to their systems’ legacy and technical heritage, whereas systems manufactured by certain emerging OEMs are suffering from a lack of trust in their supposed efficiency

Supply-chain Monitoring & Transparency Standards: The proliferation of components, sub-parts, micro-processors suppliers, with a trend towards low-cost suppliers, impact negatively platforms and systems supply chain. Increasing controls to prevent from counterfeiting issues and performed maintenance track record lists are set to become best practices.

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For Additional Information

Joanna LewandowskaCorporate CommunicationsAerospace, Defence & Security+48 (0) 22 481 62 [email protected]

Alix LeboulangerResearch AnalystAerospace, Defence & Security+44 (0) 207 [email protected]

Aman PannuResearch ManagerAerospace, Defence & Security+44 (0) 20 7343 8361 [email protected]

Andrew ThorndykeEuropean Sales DirectorAerospace, Defence & Security+44 (0)1865 [email protected]

mailto:[email protected]


