LONDON, 27 Oct. 2006. The European military helicopter market is set to dwindle in size over the next 10 years, but still will approach nearly a $26 billion between 2006 and 2015, according to analysts at the market research firm Frost & Sullivan in London.
The stability of the European helicopter market is partly because several lucrative contracts are currently at delivery stage, such as the NH90, Tiger, and EH101 programs, which have artificially inflated the value of the market. With the completion of these projects, the market will return to a more 'normal' level as the decade progresses, analysts say.
Despite this reduction in size, the European military helicopter market will remain healthy due to new requirements, particularly in naval applications, coupled with the need to replace large numbers of surviving airframes dating from the 1960s and 1970s.
Frost & Sullivan experts say the European military helicopter market will earn revenues of $4.4 billion in 2006 and fall slightly to 4.6 billion English pounds in 2015.
"The European military helicopter market will be determined by the demands of operations other than war (OOTW) for the next ten years," says Frost & Sullivan Defence Analyst Graham Cushway. "This generally means that they require a need for greater adaptability in terms of mission, and large carrying capacities. Subsidiary military helicopter markets, such as naval helicopters and attack helicopters will also be boosted by these requirements."
OOTW operations involve small numbers of troops being moved rapidly around large areas to deal with larger numbers of insurgents. Helicopters are usually the best way to achieve this, being faster moving than ground vehicles and avoiding the hazards posed by improvised explosive devices (IEDs).
At the same time, OOTW pose new problems in terms of military helicopter design, as they need to be reconfigurable for roles such as humanitarian aid and reconstruction, which require greater carrying capacities than simple troop transport aircraft.
A major restraint in the market is that military budgets are shrinking, particularly in terms of maintenance and ground staff. This means that new military helicopter designs have to allow for a higher level of maintainability and ease of repair than would previously have been the case.
Market participants need to educate end users and develop solutions that can bridge gaps in customer's communication needs while meeting the growth requirements of an enterprise. By fulfilling these consumer requirements, participants can expect steady demand in the future. The deregulation of markets and the privatization of incumbent carriers combined with the availability of feature-rich hosted IP telephony platforms will also support revenue growth in this market.
Moreover, in the current helicopter market, airframes are expected to greatly outlast mission systems through upgrades. This means that modern military helicopters might last 40 years, and less platforms need be purchased as a result.
"An approach to airframe design which favors ease of upgrade by the incorporation of numerous commercial off-the-shelf (COTS) products into mission systems will encourage sales," Cushway says. "A priority in terms of military budget is to reduce the maintenance and logistic footprint for their forces, which means that helicopters need to be easy to maintain, with simpler models such as the NH90 enjoying a significant market advantage over the more complex V-22 and EH101."
The Frost & Sullivan report is titled European Military Helicopter Markets 2006 - 2015. For more information on this report contact Frost & Sullivan online at www.frost.com.