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TheStreet Open House

Growth Opportunities Exist For Embattled Helicopter OEMs In Non-traditional Domains, Says Frost & Sullivan

LONDON, March 28, 2013 /PRNewswire/ -- Helicopter original equipment manufacturers (OEMs) are flying into stormy skies. The prospect of a steep drop in demand for military helicopters triggered by slashed defence budgets and the absence of new military platforms procurement contracts has raised the question: what will come next? Apart from extending military aftermarket support networks to strategically sustain existing OEMs' market shares, the future remains uncertain. Yet, growth opportunities do exist, albeit not in traditional domains.

New Market Insight (MI) from Frost & Sullivan ( http://www.defence.frost.com), Military & Civil Helicopters Systems, finds that while military helicopters will continue to dominate the global market, revenues over the 2013-2021 period will shrink by almost 5 per cent. In comparison, the market for civil helicopters will be buoyant with demand from governmental and commercial end-users set to expand steadily.

Civil helicopters are expected to gain $1.83 billion in revenues during 2012-2021. Of the new helicopters to be procured in 2021, around 41 will be delivered to Armed Forces, while the rest will be operated by civil end-users. In order to capture the nascent but growing demand from civilian end-users, military OEMs and defence systems integrators will, therefore, need to readjust their strategic focus.

"It is critical to multiply concrete examples of how mission systems are actually improving mission effectiveness and making pilot workload easier, with more user-friendly interfaces than in the military world," noted Frost & Sullivan Aerospace & Defence Research Analyst Alix Leboulanger. "Without proven efficiency and benefits, civil end-user interest will shift towards new engineering developments that improve platform lifecycle management and maintenance, such as new composites in the airframe and blades."

By adopting these new systems, commercial operators hope to enhance their financial efficiency, improve their mission rates, and ideally their operating benefits. Governmental end-users, in comparison, are seeing in these new instruments an opportunity to enhance their effectiveness during critical missions.

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