Opportunity in Europe

Faced with existing geopolitical threats and the ongoing militarization of Russia, some European Union countries have announced plans to renew and significantly expand their military helicopter fleets.

As part of these plans, massive helicopter procurement may begin in the coming years and will provide an opportunity for major helicopter companies to significantly expand their presence in the EU market. Companies should also pay attention to NATO’s recently-announced plans for further expanding its collective vertical lift capabilities.

According to recent statements by NATO Secretary General Jens Stoltenberg, the coming expansion includes deployment of 30 mechanized battalions, 30 warships and 30 airborne rapid-response squadrons by 2020.

France

Likely the largest helicopter procurement package is planned by France and will be carried out as part of the currently-implemented Helicoptère Interarmées Léger (HIL) state program, which involves a massive renewal of French air forces by 2030.

The program includes the purchase of between 160 and 190 new multipurpose helicopters to replace the current French fleet of Gazelle, Airbus AS550 Fennec, AS365 Dauphin, AS565 Panther and Aerospatiale Alouette III as well as some SA330 Pumas.

According to Jean-Yves Le Drian, France’s minister of Europe and foreign affairs — who previously served as minister of defense — deliveries of the new helicopters should start in 2024, although they initially were planned for 2028.

France plans to dedicate a significant amount of resources to the military version of the H160 — in final development by Airbus helicopters and nearing flight certification — which is expected to be a flagship combat helicopter for the country.

The H160M is built entirely of composite materials and has a maximum take-off weight in the class of 6 tons and a capacity of 12 passengers. Airbus Helicopters estimates that the H160M will consume 15 percent to 20 percent less fuel than the heavier AW139.

Planned procurements are in the range of 160-180 models: 80 for the army, 49 for the navy and 40 for the air force.

Airbus Senior Vice President in charge of the H160 program Bernard Fujarski says a “firm contract to officially launch the H160M is expected in 2022, supporting first deliveries after 2025.”

Fujarski said development will benefit from the work that has gone into the civil variant of the H160, due to enter service in 2020.

In addition to the H160M, France’s plans include acquisition of more NH90 transport choppers to supplant older Puma and Cougar types.

Germany

Germany, the EU’s largest economy, is also planning a massive renewal of its military helicopters in coming years.

According to an official spokesman for Generalleutnant Ingo Gerhartz, the Inspector of the German Luftwaffe, in recent years the national government has paid insufficient attention to modernization of its military rotorcraft fleet, reflected in low rates of renewal and poor technical condition of existing units.

The status of German naval aviation is similarly uncertain. Gerhartz’s spokesman said the technical condition of the legacy Leonardo Sea Lynx multi-purpose helicopters and Sikorsky SH-3 Sea King transport models remains poor and a significant portion of the current fleet is outdated.

In November the German Bundestag allocated €5.6 billion ($6.3 billion) for the Luftwaffe's future Schwerer Transporthubschrauber, a state program directing procurement of heavy transport helicopters for the needs of German air force.

Under the terms of the program, Germany plans to replace its outdated Sikorsky CH-53G/GA/GS transport helicopters. Possible options are Boeing’s CH-47F Chinook model and Lockheed Martin’s CH-53K King Stallion, both of which were presented at the Berlin Air Show at the end of April 2018.

Both U.S. manufacturers have begun preparations for this contract, which will be probably organized in mid-2019 and would be one of the most important contracts in their European portfolios.

In the case of Boeing, the company’s greatest hopes lie with the affordability of its Chinook model. Sikorsky sells the benefits of its CH-53K as a new technology with high payload capacity and low operating cost. Germany also is familiar with its CH-53G predecessor. The Bundeswehr purchased CH-53D Sea Stallion helicopters, manufactured in Germany, under a license from VFW-Fokker as CH-53G in the 1970s. Many of these helicopters will remain in use until the end of the 2020s.

Sikorsky president Dan Schultz hopes his company has good chances to secure the lucrative contract. “The CH-53K is the most modern and capable heavy-lift helicopter ever built and has the ability to fly for the next 50 years performing ever-expanding combat, humanitarian assistance and disaster relief missions,” said Schultz.

Under the terms of the contract, the winner will supply 40 transport helicopters, plus an option for another 20 models, at an estimated value of $3.7 billion to $4.9 billion. New helicopters will perform the same missions as the CH-53G/GA/ GS fleet, including the transportation of troops and cargo. In addition, they will be required to refuel in the air from a Lockheed Martin KS-130J Super Hercules, which Germany plans to purchase and operate jointly with France. The first deliveries will start in 2023.

According to some German media reports, the package for Germany’s CH-53Ks will be similar to those purchased by the U.S. Marine Corps.

The cost of CH-53K helicopters for the U.S. Marine Corps is $87 million per unit, which is almost twice that of the CH-47F Chinook. At the same time, the operating costs of the CH-47F are lower, since the CH-53K has three engines. However, if Germany, Israel and Japan order the CH-53K as well, the cost of the rotorcraft per unit should decline. Israel is regarded as the next most likely buyer for CH-53K after Germany.

However, the external load capacity of the CH-53K King Stallion is 15 tons without the need to strengthen the fuselage. Sikorsky argues that in order for Boeing’s Chinook to reach similar external load capacity, the cost of the aircraft must increase.

In addition, sources at Lockheed Martin claim the CH-53K’s level of technical operability is close to civilian models, thanks to the built-in monitoring system. This makes the helicopter competitive compared to Chinook, despite higher initial costs. In addition, Sikorsky argues the Chinook needs to make more flights to transport the same mass of cargo as CH-53K.

Signing this contract with Germany’s air force could become the second-largest contract for Boeing in the EU.

The Rest of the EU

At the end of last year, the U.S. State Department approved the $3.5 billion sale of 16 Boeing CH-47 Chinook helicopters to the U.K. The new helicopters will replace used Chinooks in the Royal Air Force fleet, many of which are approaching 40 years old.

Four years ago, Boeing delivered the 14th Mk6 Chinook to the RAF, growing its fleet to 60 aircraft.

Chinooks were used by RAF in every major NATO operation since 1980 for air assault, troop transport and medical missions.

The RAF is due to retire its Puma medium lift helicopters in March 2025.

Supplies will be carried out within the existing U.K. “Defense Equipment Plan 2018,” which was approved by the U.K. government in November of last year.

The defense plan involves spending £186.3 billion ($240 billion) on the purchase of weapons and military equipment for the needs of the British armed forces. Of this, £9.6 billion ($12.4 billion) will be allocated for the purchase of new combat helicopters and the renewal of the U.K. military helicopter fleet.

Finally, analysts believe both Boeing and Sikorsky should pay more attention for the expansion in the Baltics region in years to come, thanks to a significant increase of the demand for military helicopters among local states such as Latvia, Lithuania and Estonia.

These countries are continuing active renewal of their military helicopters fleets which, so far, have mostly been comprised of Soviet models, considering their massive purchases from abroad.

Some agreements in this field have already been signed, including in August 2018 the sale of four UH-60M Black Hawk helicopters to the Latvian air force for $200 million.