Rotor & Wing International
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The Next Decade

Steady state sales with the promise of emerging eVTOL market

The next decade looks to be one of modest declines or steady-state sales for the rotorcraft industry in both the civil and military markets worldwide, yet corporate and governmental investments of more than $1.5 billion in electric and vertical-take-off-and-landing (eVTOL) innovations may start to yield additional dividends in the mid-2020s.

“The recent innovations in military rotorcraft, for example the Bell V-280 Valor and the Boeing-Sikorsky SB-1 Defiant — and electric (i.e. nearly 150 eVTOL aircraft) are fundamentally transforming the vertical flight industry,” said Mike Hirschberg, the executive director of the Vertical Flight Society.

Aerospace and defense market analysts at the Teal Group forecast annual rotorcraft deliveries through 2027 will stay below the 2014 peak of 1,434 aircraft worth $23.5 billion. Between 2018 and 2027, companies are likely to produce 13,229 rotorcraft worth nearly $180 billion — 8,113 rotorcraft worth $50.7 billion for the civil market and 5,116 models worth $128.9 billion for the military market, according to the Teal Group.

“The challenges associated with a falling U.S. defense market and low oil prices mean that the next ten years will see a modest decline relative to the last ten years (2008-2017) when production totaled 13,512 machines worth $194.3 billion (comprising a $141.7 billion military market and a $52.6 billion civil market),” Richard Aboulafia, vice president of analysis at the Teal Group, wrote in a report on the rotorcraft market.

Boeing, Airbus, Sikorsky, Bell, and Leonardo Helicopters will continue their roles as the major helicopter prime contractors worldwide, and further industry consolidation appears unlikely after Lockheed Martin’s 2017 acquisition of Sikorsky.

Those five companies “will continue to hold 94 percent of the market by value during our forecast period (excluding undecided competitions),” according to Aboulafia. “High barriers to market entry remain in place, with only Korea Aerospace establishing any kind of new market presence, possibly followed by Turkish Aerospace Industries.”

In the U.S. military market, the SB-1 Defiant and V-280 are moving forward in their development phases, but Army procurements for its Future Vertical Lift program are unlikely to ramp up before 2030.

In the U.S., Boeing, Sikorsky, and Bell “will continue to dominate the military side of this industry, particularly due to relatively higher levels of U.S. defense spending and more ambitious technology programs,” Aboulafia wrote. “Boeing and Sikorsky look set to maintain their long-running dominant market positions. But the U.S. primes will come under increasing and severe pressure as their home market ramps down in the second half of our forecast.”

The military market has traditionally led in dollar sales, and that looks to hold true for the next decade as well.

Civil rotorcraft market leader Airbus is projected to sell 1,847 of its H125 and H130 helicopters — the highest in sales volume — worth $6.1 billion through 2027. Yet, the second-place finisher in sales volume with 1,013 models is the military UH-60M/I by Sikorsky, and the dollar sales of those upgraded Black Hawks — $20.3 billion — are projected to outstrip all other helicopter sales volume leaders by a wide margin.

Over the next decade, the Teal Group projects Robinson Helicopters will sell 775 of its R66 training helicopters for $850 million, followed by Bell with 745 of its 505 models for $890 million and 728 of the company’s 407/206 models for $2.69 billion, Leonardo with 653 of its AW139 models for $9.3 billion and Boeing with 594 of its military AH-64D Block III remanufactured Apache models for nearly $14.3 billion.

The Teal Group expects 653 sales of Leonardo’s AW139.Leonardo

Rounding out the top 10 helicopter models in forecasted sales volume over the next decade are the Airbus/Kawasaki Bk117/H145 helicopters, which the Teal Group expects to record 467 sales worth nearly $4 billion; the Bell 429 with 428 expected sales worth about $2.9 billion and the Airbus H135 with 428 expected sales valued at $2.82 billion.

As the traditional helicopter markets continue apace, rotorcraft industry observers are also mindful of the promise that urban air mobility may hold — if it can surmount regulatory, infrastructure and public acceptance challenges.

The VFS’s Hirschberg said “we are witnessing an unprecedented explosion in innovation” across the military and civil markets.

“Over the past five years, we have successfully advocated for more than $65 million in additional funding for vertical flight research and development by the Pentagon, and hosted dozens of events around the world that have engaged thousands of engineers, innovators and technology experts in the civil and military VTOL community leading to these transformative efforts in vertical flight,” Hirschberg said.

Among such developments are the Defiant and Valor under the U.S. Army’s Joint Multi-Role Technology Demonstrator Program; European Union funding the Airbus Racer compound helicopter and the Leonardo Next-Generation Civil Tiltrotor as part of the EU’s environmental Clean Sky 2 effort; and more than $1.5 billion invested in 150 eVTOL designs.

For its part, the United Kingdom announced an investment of $436 million in hybrid-electric aircraft and similar projects, while Bell unveiled its Nexus eVTOL ducted-fan design, which the company plans to take to scale with Uber as the rideshare company’s “air taxi” vehicle supplier by the mid-2020s.

Boeing’s eVTOL prototype recently took its first flight to demonstrate the vehicle's autonomous functions and ground control systems. Boeing NeXT and the company’s Aurora Flight Sciences unit are managing research and development for the prototype.

Recent market studies commissioned by NASA, as well as those published by financial investment and analysis companies, such as Morgan Stanley, estimate that as many as 100,000 eVTOL aircraft could be flying commercially in the coming decades as part of an emerging market worth between $500 billion and $2 trillion.

The General Aviation Manufacturers Association (GAMA) has said that industry has been overcoming the technological challenges for eVTOL and urban air mobility, as companies develop eVTOL designs with more battery life, lower maintenance costs, and the capability to transport four to nine passengers at higher speeds and longer distances.

While demonstrating safety will be key for urban air mobility providers, companies such as Airbus and Bell are also examining ways to reduce rotor noise to make the concept of urban air mobility more palatable to the general public. One proposed method is reducing rotor tip speed. Public noise complaints have led to the shuttering of many vertiports in major cities.