Sikorsky Military Outlook Solid, Commercial Outlook Mixed

By Ray Jaworowski, Senior Aerospace Analyst, Forecast International.

U.S. soldiers assigned to the 2nd Squadron, 2nd Cavalry Regiment conduct air movement training in a Black Hawk helicopter in preparation for their upcoming deployment at the Joint Multinational Training Command’s Grafenwoehr Training Area, Bavaria, Germany, August 13, 2013. Image

Sikorsky is one of the dominant manufacturers on the military side of the rotorcraft market, but only has a relatively small slice of the civil market.  The H-60 series of Black Hawk and Seahawk helicopters provides the company with a solid business foundation in the military market, with U.S. Army procurement of the Black Hawk at the core of this foundation.  The Black Hawk is also a popular item on the export market, while the U.S. Air Force is acquiring a Black Hawk variant, the HH-60W, for combat search-and-rescue.  The versatility and reliable and robust performance of the Black Hawk are among the keys to the model’s success on the global marketplace.

However, U.S. Army procurement of the UH-60M is currently planned to end in the late 2020s and, while export sales will keep the Black Hawk in production, annual production totals of the model will probably start to decline at that point.  Thus, the Pentagon’s Future Vertical Lift (FVL) program looms large in the future market outlook for Sikorsky and other military rotorcraft manufacturers.  Sikorsky will be a prime contender for the various FVL contracts.  It has proposed the S-97 based Raider X for the Future Attack Reconnaissance Aircraft (FARA) effort, and may (along with Boeing) offer a derivative of the SB>1 Defiant for the Future Long-Range Assault Aircraft (FLRAA) project.

On the civil side, the oil and gas sector is key to the overall market prospects of both the S-76 and the S-92.  Demand from the oil and gas segment remains muted, and overcapacity of the type of helicopters favored by this industry remains an issue.  Still, there are signs that demand may be starting to slowly pick up.

For the longer term, Sikorsky and its Lockheed Martin parent have to decide on how they are going to evolve their civil rotorcraft product line, presuming they opt to stay in the civil market.   The still-moribund nature of the civil rotorcraft market complicates the question.

Notably, Sikorsky has so far not responded to the introduction by its competitors of new “super medium” civil rotorcraft.  Such models, which include the Airbus Helicopters H175, the Bell 525, and the Leonardo AW189, constitute a new class in the civil market situated above intermediate twins such as the S-76D but below heavy-lift types such as the S-92.

Should it stay in the civil market, Sikorsky can be expected to eventually launch a new civil rotorcraft, perhaps one that incorporates technology from the X2 demonstrator.  It remains to be seen whether the new machine would be a direct S-76 replacement or perhaps something fitting between the S-76 and the S-92.

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