GLOBAL MILITARY HELICOPTERS 2016-17 MARKET UPDATE CONTENTS MARKET OVERVIEW 2 LATEST INTERNATIONAL DEVELOPMENTS 4 EUROPE 5 NORTH AMERICA 12 LATIN AMERICA & THE CARIBBEAN 16 AFRICA 17 ASIA-PACIFIC 18 MIDDLE EAST 20 WORLD MILITARY HELICOPTER HOLDINGS 22 EUROPE 23 NORTH AMERICA 27 LATIN AMERICA & THE CARIBBEAN 28 AFRICA 30 ASIA-PACIFIC 31 MIDDLE EAST / CENTRAL ASIA 34 EVENT INFORMATION 36 Please note that all information herein is subject to change. Defence IQ endeavours to ensure accuracy wherever possible, but errors are often unavoidable. We encourage readers to contact us if they note any need for amendments or updates. We accept no responsibility for the use or application of this information. We suggest that readers contact the specific government and military programme offices if seeking to confirm the reliability of any data. 1 MARKET OVERVIEW Broadly speaking, the global helicopter market is currently facing a two- pronged assault. The military helicopter segment has been impacted significantly by continued defense budgetary pressures across most traditional markets, and a recent slide in global crude oil prices has impacted the demand for new civil helicopters as well as the level of activity for existing fleets engaged in the offshore oil & gas exploration sector. This situation has impacted industry OEMs significantly, many of which had been working towards strengthening the civil helicopter segment to partially offset the impact of budgetary cuts on the military segment. However, the medium- to long-term view of the market is promising given the presence of strong fundamentals and persistent, sustainable growth drivers. The market for military helicopters in particular is set to cross a technological threshold in the form of next-generation compound helicopters and tilt rotorcraft. Emergence of these technologies, expected to be set into motion and completed within the next decade, are likely to result in a significant expansion of the operational spectrum, force capabilities and performance. Aircraft arising from these new programmes may well see their conventional roles redefined, and thereby enhance the overall effectiveness of modern military operations. There are a number of strong and stable growth drivers for military helicopters globally, despite the continued challenges of funding and approval. A total of 20,790 military helicopters are currently in service in 153 countries, with a further 3,402 on order in over 60 countries. The most widely operated type is the S-70/UH-60, of which some 3,600 are in service, followed by the Mi-8/17, of which 2,400 are in operation. Between them, these two types represent 29% of the world military helicopter fleet. 2 MARKET OVERVIEW Geographical Breakdown of World Military Helicopter Fleet 7000 6265 5393 6000 4940 FLEET 5000 NUMBERS 4000 3000 2209 NUMBERS ON 2000 1296 1213 687 941 712 ORDER 1000 38 320 178 0 North America operates the largest part of the world military helicopter fleet (30.2%), followed by Asia-Pacific (25.9%) and Europe (23.8%). However, in terms of orders, Asia-Pacific has the highest proportion (35.7%), with India alone accounting for 42% of the military helicopters on order in that region. Africa is also anticipating a huge increase to its regional fleet number. In Europe, Russia presently accounts for 43% of military helicopter orders. 3 KEY REQUIREMENTS LATEST INTERNATIONAL DEVELOPMENTS LATEST INTERNATIONAL DEVELOPMENTS Selected acquisition and modernisation from around the world… EUROPE DENMARK • Denmark has taken delivery of its first 3 Sikorsky MH-60R Seahawks. • They will be flown by the Royal Danish Air Force’s Eskadrille 723. They will replace the unit’s current Super Lynx Mlk 90Bs. Deliveries are due to be completed by 2018. GERMANY • A potential Tiger Capability Assurance Programme (CAP) is being studied, while a CH-53 replacement decision is due in late 2016, with a contract to be signed in 2018 and deliveries from 2022. The requirement is to be contested by the CH-53K and Boeing CH-47F. • A light utility helicopter may be procured, with preference given to a platform already in service or on order. Studies for a Sea Lynx replacement by 2020-25 have commenced, with UAVs possible for some of the role. An initiative for a multinational medical evacuation helicopter fleet is still being pursued, with a decision anticipated by 2018. • Germany’s first NH Industries NTH90 Sea Lion is on schedule to make its flight debut in the fourth quarter of 2016, as Airbus Helicopters prepares to bid the same type for another requirement with the nation’s navy. • 18 helicopters will be produced for the German Navy, as replacements for its Westland Sea King fleet. The first of these is now in final assembly at the company’s Donauwörth site near Munich • Deliveries of the NH90 will continue to 2023, with an MLU or capability assurance programme planned for 2025. 5 LATEST INTERNATIONAL DEVELOPMENTS EUROPE NETHERLANDS • 12 CH-47F Chinooks have been ordered for the Royal Netherlands Air Force (RNLAF). NORWAY • Norway’s first 2 AgustaWestland AW101s have been rolled out at the Leonardo-Finmeccanica assembly site in the UK, as part of an at least 16- unit production order. • The first aircraft will be delivered to the Royal Norwegian Air Force in March 2017, with the defence ministry expecting this to undergo a one- year programme of testing and evaluation. The remainder will be transferred by 2020. POLAND • Poland has redefined the requirements for the Kruk attack helicopter, which will delay the tender by a year. The initial plan was to sign a contract in late 2017. • The Polish Ministry of Economic Development has announced the end of negotiations over a potential offset deal with Airbus Helicopters, indicating that the Ministry of Defence will not purchase Caracal military transport helicopterss for the country’s military. • Poland will most likely revise the previous cabinet’s decision from April 2015 to award a deal for 70 Caracals to Airbus Helicopters. 6 LATEST INTERNATIONAL DEVELOPMENTS EUROPE RUSSIA • The maiden flight of the first prototype of the Kamov Ka-62 multipurpose helicopter, took place on the 28th April 2016 at the Progress Arsenyev Aviation Company plant in Russia’s Far East. • Russia’s Defence Ministry has placed its first order for the dual-control Mi- 28UB. A contract for 24 of the training and combat variant, along with 2 heavy-lift Mi-26s, was announced on the 24th April. Deliveries are due for completion by the end of 2018. • The first Kamov Ka-52 Alligator attack helicopters being built for export will be delivered in 2017. SERBIA • Kazan Helicopters is preparing to deliver 2 new-production Mi-17-V5s to the Serbian Air Force and Air Defence (SAF&AD) forces. • Russian Helicopters delivered two Mil Mi-17V5s to Serbia on the 28th June 2016, marking the first delivery of new rotorcraft to its air force in 25 years. Acquired for $28 million, the pair will augment Belgrade’s existing rotorcraft fleet, which consists of 6 Mi-8Ts and one Mi-17 transport – the service lives of which are expected to end between 2017 and 2019. SPAIN • Airbus Helicopters is on track to deliver another pair of NH Industries (NHI) NH90 troop transports to Spain before the end of the year, adding to the 3 examples already accepted. • Spain will eventually operate 22 of the type. 7 LATEST INTERNATIONAL DEVELOPMENTS EUROPE U.K. • CAE is approaching the halfway point in its 40-year Medium Support Helicopter Aircrew Training Facility (MSHATF) contract, which provides full flight simulation for the UK’s AW101 Merlin, Puma HC2 and CH-47 Chinook helicopter crews at RAF Benson, in Oxfordshire. • Some 9,000 hours are logged using the system each year, with another 2,000 hours accumulated by third-party users, including AW101 operators Canada and Denmark, and the Netherlands for its Chinooks. • 3 Chinook, 2 Merlin and a Puma simulator are being upgraded by CAE. • Aircrew across the three Services will continue to conduct their basic and advanced rotary-wing training at RAF Shawbury and Army Air Corps Middle Wallop, Hampshire. Mountain and maritime rotary-wing aircrew training will take place at RAF Valley, Anglesey. • Airbus Helicopters will deliver an integrated support solution over a period of 18 months, ready to begin training in April 2018. • The H135s and H145s will deliver the 28,000 flying hours per year required to meet the training requirement. • The British Army’s Gazelle AH.1 observation and utility helicopters are to remain in service for another 9 years, according to the UK Ministry of Defence (MoD). • The MoD confirmed it is to run a new competition for all elements of the helicopter’s in-service support, in time for new contracts to be in place to be re-let by March 2018. The new contracts to keep the Gazelles in UK Army Air Corps (AAC) service will run from 2018 to 2025. • The AAC currently operates a fleet of 34 Gazelles, of which 15 are routinely undergoing maintenance, with 19 in daily operation. 8 LATEST INTERNATIONAL DEVELOPMENTS EUROPE U.K. (cont) • The British Army has purchased a new fleet of Apache attack helicopters from Boeing, it was announced during the opening of the Farnborough International Airshow 2016 on the 11th July 2016. • In total the UK is purchasing 50 AH-64E Apache Guardian helicopters at aa cost of $2.3 billion. These will replace the 66 AgustaWestland-Boeing WAH-64D Block I Apache Longbow AH.1 helicopters currently operated by the Army Air Corps (AAC). • The first AH-64E is due to come off the US production line in early 2020, with the type beginning to enter service with the AAC in 2022. The UK’s existing WAH-64Ds will be fully withdrawn from service between 2023 and 2024.