Rotorcraft: Politics to the Fore

Rotorcraft, like many other segments of the aerospace industry, have always been subject to nationalism and closed borders. Despite pressures in favor of globalization, rotorcraft markets are increasingly politicized.

The drivers behind this politicization are simple. Europe is determined to give its new generation of products a hospitable domestic market. The U.S., still waiting for a tiltrotor revolution and increasingly dependent upon derivative products, is also protecting its domestic markets. And the rest of the world has become an export market battleground, with U.S. manufacturers fighting to retain what has traditionally been their turf.

EUROPE'S STRONG PERFORMERS

The biggest change in the market over the past few years has been the appearance of Europe's long-awaited next generation of helicopters. The successful mergers of Agusta and Westland, and the continued strong performance of Franco-German Eurocopter, helped create the industrial context for a wide variety of new models, which are finally enjoying sufficient, if limited, support from their home governments.

The AgustaWestland EH 101 and Eurocopter/AgustaWestland NFH90 are Europe's first fully integrated maritime patrol/anti-submarine helicopters. Transport versions of these designs are also rejuvenating the Continent's utility market, with the EH 101 providing Europe's largest troop transport yet and the TTH 90 soon replacing Eurocopter's Super Puma as Europe's squad transport of choice. While the Super Puma consistently lost out to Sikorsky's UH-60 for the biggest military export orders, the NH90 looks set to even the score. Meanwhile, Eurocopter's Tiger looks set to be Europe's first commercially successful attack helicopter, challenging the long-standing U.S. attack champions, Bell's AH-1 and Boeing's AH-64.

These positive European product developments haven't been unqualified successes. Home government orders for the EH 101 are rapidly being filled, raising questions about how long the production lines can stay intact. And home market NH90 and Tiger orders still face cuts, particularly with Europe's decision to fund the Airbus A400M military transport. The Tiger also still faces serious opposition from Boeing's AH-64D, which continues to secure the most lucrative export contracts.

Yet, while Europe's success isn't without limits, it stands in contrast to an uncertain situation for U.S. contractors. The U.S. is increasingly reliant upon derivative products, such as a third incarnation of Boeing's CH-47 large transport, rebuilds of Sikorsky's UH-60 squad transport, and what will probably be the final Cobra, the AH-1Z. Sikorsky's new S-92 transport offers promise, but is a close relative of the earlier UH-60 and CH-53 transports. Ironically, the only all-new U.S. military helicopter program, Boeing Sikorsky's RAH-66 Comanche, is the most vulnerable to outright cancellation. And the only all-new utility transport, the AB139, is only possible with the majority involvement of Europe's AgustaWestland.

Thanks to Europe's new products and aggressive posture, U.S. manufacturers' ability to compete abroad has been curtailed. Europe's new generation has been rewarded with some impressive new export contracts. The last two years have seen major NH90 export orders from Norway, Sweden, Finland, Greece, and Portugal. Denmark and Portugal also ordered the EH 101. Spain and Australia have selected the Tiger over the competing U.S. attack designs. And in 2003, Japan selected the EH 101 to replace Sikorsky S-80s for rescue duties, the first notable Japanese military order for a non-U.S. helicopter.

While European countries would argue correctly that the U.S. military has yet to open its procurement process to foreign suppliers, the U.S. Coast Guard and other government agencies have a strong track record of buying Eurocopter and AgustaWestland models. Countless U.S. police forces, for example, operate various Eurocopter models. The AgustaWestland/Bell AB139 has been tentatively selected to replace Eurocopter HH-65 Dolphins under the Coast Guard's Deepwater recapitalization effort. Europe, by contrast, has made a strong effort to protect even its civil government market. This was best seen in a 2002 decision by Ireland's government to cancel a Sikorsky S-92 order, after considerable political pressure from Europe's helicopter producers.