May 21, 2012
Credit: Credit: Boeing
The V-22 is finally proving the value of marrying the vertical lift of a helicopter with the speed of a fixed-wing aircraft after a tumultuous and prolonged development phase. But the question now is whether this success is coming at a time when the Bell-Boeing team is powerless to turn its inherent operational utility into substantially more sales.
Even with a ringing endorsement from its main customer, the U.S. Marine Corps, the program has struggled to bring in the international sales needed to dramatically extend the production line. The United Arab Emirates is expected to sign on by year-end as the first international customer, a significant achievement for the program team. And interest from the UAE is said to be prompting some Israeli officials to consider buying the aircraft sooner than planned in 2018. However, the global financial crisis is pinching the budgets of so many potential customers that near-term opportunities are limited.
After decades of turbulent development—including four fatal crashes during flight testing—the tiltrotor is proving its worth in continuous deployments to Iraq and Afghanistan, according to Marine Corps officials. The aircraft is replacing the Marines' CH-46 helicopters and MH-53s now retired by the U.S. Air Force for special operations missions.
But more sales are sorely needed. While continuing to woo more customers, the industry team is now sorting through the thorny problem of a roughly 50% drop in annual production for the Marine Corps as it plans for the second multiyear buy of 98 Ospreys. International sales would help soften the blow to the supply base of the Pentagon's rate reduction.
Bell-Boeing is slated to deliver 39 V-22s to the Pentagon this year, bringing the total number to 200. That will be sliced to 21 for the first year based on the forthcoming Multi-Year Plan II. In the fiscal 2013 budget proposal, the Pentagon trimmed the MYP II buy to 98 from 122, shifting 24 aircraft to later in the production plan.
To be certified for a MYP, the program had to demonstrate roughly 10% of savings as compared with year-over-year buys from fiscal 2013-17.
This makes the Marines' longtime goal of achieving a $58 million per-unit price (in fiscal 2010 dollars) unlikely. “We are finally proving the business case certainly with the quantities being in the high 30s per year right now,” says John Rader, Bell-Boeing's V-22 program manager. “Certainly, there is going to be some upward pressure in going from 39 per year to 21, and a lot of that is going to be on our supply base.” Roughly 60% of the price of Boeing's piece of the work comes from its supply base, he says.