Sikorsky sees good prospects in global helicopter market

PARIS Sun Jun 16, 2013 4:13pm EDT

PARIS (Reuters) - International orders are set to eclipse U.S. military purchases of Sikorsky Aircraft helicopters in four or five years, the company's president told Reuters ahead of the Paris air show.

Sikorsky Aircraft, a unit of United Technologies Corp (UTX.N), sees bright prospects overall for the global helicopter market, given strong international and commercial demand, as well as Washington's continued commitment to new U.S. military rotorcraft programs, including a new presidential helicopter.

"The big theme this is year is the international military side," Sikorsky President Mick Maurer told Reuters in an interview in Paris. "It looks pretty good."

Maurer said international sales of military helicopters would account for more than 50 percent of the company's revenues at some point in the coming four or five years, given strong demand for Sikorsky's helicopters.

Sikorsky is set to announce several new orders this week, including a contract with China's CITIC Offshore Helicopter Co (COHC) for two S-92 helicopters.

Sikorsky hopes the deal can break the stranglehold its big rival, Eurocopter, has on the lucrative and rapidly growing Chinese market for helicopters to be used in the offshore oil and gas business.

The offshore business "has really been heating up for us in the last couple of years," Maurer said.

He said the CITIC order from China was small, but could be the start of a large series of orders if everything went well. "CITIC is the biggest offshore operator. They're checking us out." Asked how large that market was, Maurer said, "I wouldn't even want to guess. You're talking about China."

Sikorsky is also poised to announce the order of four S-92 helicopters by long-time customer, Zhuhai Helicopter Co, which has already bought eight S-92s since 2011, an industry official said.

Maurer arrived at Le Bourget airport on Saturday from Poland, where the company is competing against AgustaWestland and Eurocopter for an order valued at around $1 billion.

Sikorsky brought its S70i helicopter, the international version of its workhorse Black Hawk to the air show. It is one of the few U.S. aircraft that will be on display given U.S. major defense spending cuts that took effect on March 1.

POTENTIAL ORDERS

Maurer said it was possible Poland would announce a contract winner in the first half of 2014, but noted that international military competitions often dragged on for years longer than expected.

He cited other potential military helicopter orders from India, Turkey and several Asian countries, including Thailand, the Philippines, Brunei and Australia, as well as Colombia and a few other South American countries.

Maurer said commercial sales were expanding, but Sikorsky expected to remain focused more heavily on military sales, which now account for about 70 percent of the company's revenues.

He said there was continuing uncertainty about the U.S. defense budget, but he was heartened by the U.S. Defense Department's plan to go ahead with some new helicopter programs, including a Navy plan to buy a new presidential helicopter.

Maurer said the company was also closely tracking the U.S. Air Force's bid to buy a new combat rescue helicopter. Other companies have dropped out of the running for this after concluding that the bid was structured to favor Sikorsky.

Maurer said the fate of the U.S. Army's "Armed Aerial Scout" competition depended on the depth of the budget cuts, but Sikorsky could benefit from a delay given that it is developing a brand new helicopter for the program.

Sikorsky has also teamed up with Boeing to jointly develop a technology demonstrator for the Army's Joint Multirole helicopter program. Last week it won a $435 million order from the Marine Corps for four CH-53K helicopters to be used during operational evaluation missions of the new helicopter.

Maurer said the CH-53K program was showing good progress, and could be a candidate for foreign sales in future. Sikorsky viewed the CH-53K as crucial to the firm's future success, he said.

Maurer said Sikorsky was also looking for other ways to offset a drop in aftermarket sales caused by the winding down of the war in Afghanistan.

He said it was important to maintain offices and a presence in countries such as India, which has money to spend, and a great need to modernize its technology.

"You're much more credible if you're already there ... you in a much better position to have conversations with the customer coming up," he said.

(Reporting By Andrea Shalal-Esa; Editing by David Brunnstrom)