Due to budget cuts, the market will have to focus on upgrades, service life extension programs and FMS to keep itself afloat, says Frost & Sullivan
MOUNTAIN VIEW, California, Oct. 14, 2015 /PRNewswire/ -- With a small number of new procurement programs scheduled for the coming years, the need for logistical support, upgrades, and the remanufacture of current platforms and subsystems will sustain growth in the U.S. Department of Defense (DoD) helicopter market. Opportunities will emerge from the DoD's demand for innovative systems and solutions to increase the service life of new and existing rotary-winged weapon systems. Technologies allowing commonality of parts and subsystems as well as easing the maintenance to reduce overall life cycle costs will gain favor.
Analysis from Frost & Sullivan, US DoD Helicopter Market (http://www.frost.com/sublib/display-report.do?id=NF85-01-00-00-00&src=PR), expects military helicopter funding to decrease from $9.99 billion in 2015 to $6.89 billion in 2020, at a negative compound annual growth rate of five percent.
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"U.S. DoD budget cuts, looming sequestration and budget uncertainties explain the bleak military helicopter funding forecast," said Frost & Sullivan Aerospace & Defense Senior Industry Analyst Michael Blades. "While the defense budget has been used as a political bargaining tool for several years, this has not had any effect on the industry so far."
In May 2015, Army Chief of Staff, General Ray Odierno stated budget uncertainty is "going to put us in a modernization hole for 10 years, and our ability to continue to meet our current missions will be challenged." Helicopter manufacturers across the U.S. will have to find novel ways of boosting revenues.
"Leading helicopter manufacturers must foster partnerships to remain competitive," noted Blades. "They should focus on drawing synergies from these partnerships and establishing relationships leading to foreign military sales (FMS)."
Saudi Arabia, Taiwan, Iraq, United Arab Emirates and Sweden are among the countries already purchasing U.S. military helicopters. Countries with recent purchase agreements driving future FMS revenues include South Korea, Qatar and Indonesia.
US DoD Helicopter Market is part of the Defense (http://ww2.frost.com/research/industry/aerospace-defense) Growth Partnership Service program. Frost & Sullivan's related studies include: Global Military Aircraft Maintenance, Repair, and Overhaul (MRO) Market, Rapidly Evolving Defense Markets, Part 1, Global Military Fixed Wing Market Assessment, and Global Military Avionics Market Assessment 2014-2023. All studies included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.
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US DoD Helicopter Market
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SOURCE Frost & Sullivan