Rotocraft Sylvia Wower
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Rotorcraft Industry INTELLIGENCE REPORT 2009 / 2010 ROTORCRAFT INDUSTRY MARKET FORECAST AND ANALYSIS NAICS 336411-336415 © 2009 DVIRC Growing Business Value
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Next generation US military helicopter manufacturers losing ground to Asia and Europe • Attack, Transport, and Utility Rotary Wing represents 43% (apx. 16,500 units) of total military aircraft fleets • MRO spending in 2009 for Military Fleet generated $61 billion (38,500 units), expected to grow to $67.5 billion by 2018 • Rotorcraft market is strong, especially compared to declining sales in other aviation sectors • 2009 Rotorcraft Export: Europe holds 55% of world market ($1.54 billion) while North America holds 38% ($1.071 billion) The global aerospace and defense market grew by 9.8% in 2008 to $674.6 billion, and is forecasted to grow to $910 billion by 2013 • In 2008, the European aerospace and defense market generated $184.3 billion in total revenue, the Asian market generated $124.6 billion, and the U.S. market generated $335.9 billion, capturing 49.8% of the global market • Projected revenue over the next decade for the rotorcraft industry totals $143 billion for turbine rotorcraft and engine deliveries - $27 billion for Civil airframe value - $4 billion for Civil engine value - $104 billion for Military airframe value - $8 billion for Military engine value • In 2009, new-build medium/heavy military rotorcraft revenues will be $6.7 billion, projected to be $10.3 billion in 2018 • Sikorsky Aircraft Corporation is expected to account for apx. 33% of the medium/heavy military rotorcraft market during 10-year forecast period • Eurocopter experienced 30% decline in sales in 2009; lost civil sales being offset by military and governmental backlog • Boeing Company’s Integrated Defense System (IDS) expects to generate $34 billion in 2009 • 16% of Boeing Company’s revenue is international sales, primarily from Asia and Middle East (expected to grow 20% by 2011) Macro Drivers: • The EU is incorporating airlines into Emissions Trading Scheme (ETS) starting in 2012 • Brazil signed a $1 billion contract for new EC 725 Cougars with Eurocopter in Dec 2008 making the Cougar the standard medium helicopter for Brazilian Navy, Army and Airforce • France and Germany have an emerging joint requirement for a Heavy Transport Helicopter with a service entry of 2020 • Turkey will be purchasing a fleet of 12 Mi-28 “Havoc” attack helicopters from Russia, and not the US-made Cobra attack helicopters originally requested • By 2015 Russia plans to triple its world market share for non-military helicopters to 15%
Transcript of Rotocraft Sylvia Wower
Rotorcraft Industry
INTELLIGENCE REPORT2009 / 2010
ROTORCRAFT INDUSTRYMARKET FORECAST AND ANALYSISNAICS 336411-336415
© 2009 DVIRC
Growing Business Value
ROTORCRAFT INDUSTRY
© 2009 DVIRC
Strategic View: •NextgenerationUSmilitaryhelicoptermanufacturerslosinggroundtoAsiaandEurope
•Attack,Transport,andUtilityRotaryWingrepresents43%(apx.16,500units)oftotalmilitaryaircraftfleets•MROspendingin2009forMilitaryFleetgenerated$61billion(38,500units),expectedtogrowto$67.5billionby2018•Rotorcraftmarketisstrong,especiallycomparedtodecliningsalesinotheraviationsectors•2009RotorcraftExport:Europeholds55%ofworldmarket($1.54billion)whileNorthAmericaholds38%($1.071billion)
Financial Trends: •Theglobalaerospaceanddefensemarketgrewby9.8%in2008to$674.6billion,andisforecastedtogrowto$910billionby
2013•In2008,theEuropeanaerospaceanddefensemarketgenerated$184.3billionintotalrevenue,theAsianmarketgenerated$124.6billion,andtheU.S.marketgenerated$335.9billion,capturing49.8%oftheglobalmarket•Projectedrevenueoverthenextdecadefortherotorcraftindustrytotals$143billionforturbinerotorcraftandenginedeliveries -$27 billion for Civilairframevalue -$4 billion forCivilenginevalue -$104 billion forMilitaryairframevalue -$8 billion for Militaryenginevalue•In2009,new-buildmedium/heavymilitaryrotorcraftrevenueswillbe$6.7billion,projectedtobe$10.3billionin2018•SikorskyAircraftCorporationisexpectedtoaccountforapx.33%ofthemedium/heavymilitaryrotorcraftmarketduring10-yearforecastperiod•Eurocopterexperienced30%declineinsalesin2009;lostcivilsalesbeingoffsetbymilitaryandgovernmentalbacklog•BoeingCompany’sIntegratedDefenseSystem(IDS)expectstogenerate$34billionin2009•16%ofBoeingCompany’srevenueisinternationalsales,primarilyfromAsiaandMiddleEast(expectedtogrow20%by2011)
Macro Drivers: •TheEUisincorporatingairlinesintoEmissionsTradingScheme(ETS)startingin2012
•Brazilsigneda$1billioncontractfornewEC725CougarswithEurocopterinDec2008makingtheCougarthestandardmediumhelicopterforBrazilianNavy,ArmyandAirforce•FranceandGermanyhaveanemergingjointrequirementforaHeavyTransportHelicopterwithaserviceentryof2020•Turkeywillbepurchasingafleetof12Mi-28“Havoc”attackhelicoptersfromRussia,andnottheUS-madeCobraattack helicoptersoriginallyrequested•By2015Russiaplanstotripleitsworldmarketsharefornon-militaryhelicoptersto15%
Industry Drivers •USMilitaryandCongressseetheGlobalWaronTerroras“RotorcraftWars”
•USExportControlPolicyforcesforeigncompetitorsto‘designout’UScomponentstoavoidapplyingforaUSexportlicense•Withaprojectedproductiongapfrom2019onwards,USmanufacturerswilllikelyneedtoconsolidateduetolackofnewaircraftmodelsinthepipeline•Fuelasapercentageoftotaloperatingexpenseisexpectedtodropto29%in2009,withalternative sustainable biofuels identifiedtoreducegreenhousegasemissions•Eurocopter’s“Bluecopter”dieselengineconceptforlighthelicoptersenhancesgreenperformance -Targeted40% decrease in CO2 Emissionand 53% reduction in Nitric Oxide Emissions
Market Trends: •R&Dfocusesonmakingrotorcraftsturdier,lessvulnerabletoenemyfire,morefuelefficient,quieter,andfaster
•3,924medium/heavymilitaryrotorcraft(largestsegment)tobemanufacturedinUSfrom2009-2018,estimatedat$88.1billion•Only13%ofhelicoptersintheDoDhavefly-by-wiretechnology,expectedtoincreaseto35%by2020•SmartMaterialsActuatedRotorTechnology(SMART)beingstudiedbyDARPA,NASA,USArmy,USAirForce,andBoeingas awaytoimproveperformanceanddramaticallyreducenoiseandvibration•Technologiesfocusedonhoverabilityandsafelandingsinbrownout/whiteoutconditionsbeinginvestigatedusingLIDAR,laser sensors,andsimulationdevices•Honeywellprojects3,500-4,500 new civil helicopterstoenterservicegloballywithinfiveyears(steadyin2009,butdeclining 2011and2012)withCorporate,EmergencyMedicalServices,LawEnforcement,andUtilityaccountingfor80%ofsales•Rolls-Royceexpectsaslowdownofnewcivilhelicoptersin2009andthenincreasingdemandthrough2013(9,600unitsfrom2009-2018)•In2009,newcivilhelicopterpurchasefellabout21%globallycomparedto2008levels•80%ofnewcommercialpurchaseswillbemadetoreplaceolderaircraftinthesamesize/capabilityandpriceclass,lessthan 11%ofoperatorsplantotrade-up•Tiltrotortechnologybeingintegratedintocommercialaircraftmarket -DualcertificationofAgustaWestland’sBA609TiltrotorVTOLAircraftplannedfor2012•HelicopterEmergencyMedicalServices(HEMS)sectorfacingsafetyandoperationalissueswith26riskfactorsidentified
Jobs:•Strongdemandforskilled laborisintensifying,whichwillinturnincreaserealwagerates•Averagesalaryin2008was$56,007andexpectedtoincreaseto$63,547in2012•Wageswillgeneratesomepressureoncorporateprofitsevenasproductionrevenuerises
INTELLIGENCE REPORT
© 2009 DVIRC
Pricing:•Rotarywingaccountsfor 6% of total aerospace raw material demand(56.6millionlbs)•Aggregate aluminum demandintheaerospaceindustrywillfallbelow420millionlbsin2009,butisexpectedtoincreaseto 600millionlbsby2013•Aluminum pricingwillfollowdomesticaluminumconsumption:9,861thousandmetrictonsin2011,a4.5%increasefrom2009•Nickel alloydemand willdeclineby12%in2010to101millionlbs•Steel alloydemandwilldeclinefrom240to215millionlbsby2010butisexpectedtopickupby2012•Aggregateaerospace composites demandis40millionlbsin2009andwilldoubleby2015;pricingvaliditywillincrease•Total raw material demandprojectedtoincreaseata4.5%CAGRthrough2019;titaniumandcompositeswillgrowthefastest•JetFuelpricingisdown26%from2008-2009butisexpectedtoleveloffin2011
Regional Focus: •June2009,USNavycanceledMartin/Agusta WestlandVH-71contracttodeveloppresidentialhelicopterafterbudgetmore
thandoubledto$13billionandwasdelayedseveralyears•Boeing Companycompleteda6-yr.Armycontract(BlockI)toretrofitandupgrade22ApacheLongbowCrewTrainers, 22 MaintenanceTrainingDevicesandaLongbowCollectiveTrainingSystem -BlockIIincludesupgradestothedigitalcommunicationssystemstoimprovecommunicationswiththe‘tacticalinternet’ -BlockIIIoftheApacheLongbowHelicopter(2008onwards)includesincreasingdigitization,jointtacticalradio system,enhancedenginesanddrivesystems,capabilitytocontrolUAVs,newcompositerotorblade,andlandinggear upgrades•Atwo-phaseJointPerformanceBasedLogistics(PBL)contractfromUSDoDawardedtoBell-BoeingforthedevelopmentandupgradingoftheOspreyFleet -Phase1($581millionoverfiveyears)awardedinJanuary2009,providesintegratedlogisticssupport -Phase1.5($11million)awardedinJune2009,isamodificationtoanexistingcontract,designedtoimplementreliability improvementsonaselectnumberofaircraftcomponentswhichhavebeendeterminedtohaveasignificantimpacton missionreadiness -Phase2(notyetawarded)willincludesupplychainmanagement,whichencompassesthepurchase,repair,stockingand deliveryofapproximately15,000spareandrepairaircraftparts•Boeing Company and AgustaWestlandsignedacontracttomanufactureandsupport16ICH-47FChinookhelicoptersat Boeing’sRidley,PAfacilityfortheItalianArmy($1.23billion),deliveriesbeginin2013•JointHeavyLiftRotorcraftprogramisUSArmy’snext-generationofrotorcrafttoreplaceBoeing’sCH-47Chinook,deliverynot expecteduntil2025•SubsonicRotaryWingTechnologyDevelopmentContractawardedbyNASAinFebruary2009toBell Helicopter Textron Inc., Boeing Co., and Sikorsky Aircraft Corp.for$40millionwitha5-yearperiodofperformance•Piasecki Aircraft Corporation’s“Speedhawk”VectoredThrustDuctedPropeller(VTDP)CompoundHelicopterProgram,partoftheArmyAdvancedTechnologyDemonstrationprogramtoimprovefutureRotorcraftperformance,isnowinPhase2offlighttestingandmodifications
© 2009 DVIRC2905 Southampton Road • Philadelphia, Pennsylvania 19154 • 215 464 8550 • www.dvirc.org
Source:BureauofLaborStatistics;Moody’sEconomy.com;LexusNexus;Integra;Deloitte;DepartmentofCommerce;GlobalInsight,Inc.;HarvardBusinessReview;Hoovers;McKinseyQuarterly;INGForeignExchangeWholesaleBanking;EconomistIntelligenceUnit;Edgar;FederalReserveBank;PricewaterhouseCoopersHealthcareIndicators;HospitalStatistics;BruegelBrusselsBelgium;Standard&Poors;SecurityPriceIndex;WallStreetJournal;ConsumerConfidenceBoard;EcoTrends2009.FederalEnergyRegulatoryCommission;Rolls-RoyceMarketOutlook;Boeing2009-2028KeyIndicators;AeroStrategy-MilitaryMaintenance,RepairandOverhaulMarketOutlook;AMM(AerospaceMetal)Outlook2008;BombardierAerospace2007-2008,TheGrowingRoleofEmergingMarketsinAerospace;ITAFlightPlan2009;BombardierAerospace2008-2009.GrowingRoleofEmergingMarketsinAerospace;AerospaceIndustriesAssociation;AirTransportAssociation;FAAAerospaceForecast2009-2025;Rotor&WingMagazine;ForecastInternationalMarketAnalysis2009;IconGroupWorldMarketforHelicopters(2009).
Disclaimer:Theinformationpublishedandopinionsexpressedinthisdocumentaresubjecttochangewithoutnotice.TheDelawareValleyIndustrialResourceCenter(DVIRC)makesnorepresenta-tion(eitherexpressorimplied)thattheinformationandopinionsonthisDocumentaretimely,accurate,complete,oruptodateatanytimeaftertheirinitialJune30,2009publication.DVIRCshallnotbeobligedtoremoveanyoutdatedinformationfromthisreportortoexpresslymarkitasbeingoutdated.NeithertheDVIRCnoritsaffiliates,noranyoftheirrespectiveagents,employees,informationprovidersorcontentprovidersshallbeliabletoanyuseroranyoneelseforanyinaccuracy,error,omission,alterationof,oruseofanycontentherein,regardlessofcause,orforanydamagesresultingtherefrom.
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