Products, Services

Finding a Better Way

By By Douglas Nelms | June 10, 2014

To virtually no one’s surprise, the upcoming end to a decade of war has resulted in a serious drop in the U.S. President’s fiscal year 2015 military budget, with little hope for increases over the next half-decade or so. The U.S. Department of Defense (DoD) budget request for FY15 is $495.6 billion, compared to the FY14 budget of $615.10 billion. From that, the Army is asking for $120.5 billion, down from $125 billion in the FY14 budget and from a peak of $144 billion in 2010.

Of the 2014 budget, roughly 1.6 percent was for helicopters, with an expected continued drop of 9.7 percent compound annual growth rate (CAGR) through 2018, according to a recent Frost & Sullivan forecast. Michael Blades, senior industry analyst, said that most of the reduction in spending would be from platform procurement funding. Whereas the procurement funding was up around $10.7 billion two years ago, it is now expected to be cut roughly in half, to $4.9 billion, by 2018. However, he noted, by that time programs such as the Sikorsky CH-53K, MH-60L and Bell-Boeing CV-22 will either be completed or ramping down.

But while money for procurement will drop, money for research, development, testing and evaluation (RDT&E) will remain fairly level. Even that will not be a major panacea for funding for developing new systems technology, since a lot of future military R&D money will be aimed at the Joint Multi-Role (JMR) helicopter, which will provide the technology demonstration for the Future Vertical Lift program – and that will not even start until around 2017 or later.


So the name of the game until then is using upgraded commercial-off-the-shelf (COTS) technology in order to do more with less – and let the civil industry pay for it.

“There is a business case for the expanded use of COTS,” said Tom Captain, vice chairman of Deloitte LLP. “In the absence of U.S. budget capacity, with the inability of the U.S. government to spend the kind of money needed for R&D, the civil industry is going to be spending more of their own money for product development R&D. There will be more use of commercial existing platforms retrofitted to defense applications.”

Steve Mundt, strategy and development at EADS North America, made a point during an industry panel at the Quad-A Missions Solutions Summit in May about Joint Multi-Role/Future Vertical Lift. He said that the technology changes between 2015 and 2035, the earliest potential date for the fielding of the FVL (medium), will be extensive. He wondered how industry and the army could work to manage that process better.

Industry is already taking up a lot of the slack by investing in R&D for programs that can transition between civil and military. AgustaWestland noted that it already invests over 10 percent on R&D, which is “several times the defense industry average.”

L-3 Wescam MX-15 EO/IR imaging turrets on the UH-72A. Photo courtesy L-3 Wescam

A departure from traditional procurement processes and government funding R&D “is likely to lead to new, and more effective, solutions and partnerships with industry,” said AgustaWestland North America CEO Robert LaBelle. The military goal is for industry to come up with even more technology that can be used to improve its helicopter fleet while reducing the size of that fleet. Secretary of Defense Chuck Hagel has already stated that the overall Army fleet would be reduced by 25 percent, but modernized under the President’s budget plan to compensate for that loss.

A major reduction in the fleet will be under Army Aviation’s Restructuring Initiative. Under that plan, the fleet of OH-58D Kiowa Warriors will be retired, saving the Army more than $10 billion in modernization costs. The armed reconnaissance role of the OH-58D will be taken over by the AH-64 Apache. The Army will also retire the TH-67 trainers at Fort Rucker. Instead, the Army is asking for funding for an additional 100 UH-72s, with the first 55 from the FY15 budget, at a cost of $5.5 million per aircraft. Another 45 will be requested from the FY16 budget. These will be used for training.

AgustaWestland is offering its AW119Kx to the Navy to replace that services primary helicopter trainers. The company said that with no modifications from its current configuration, the AW119Kx’s combination of “low operating costs, strong performance characteristics, advanced capabilities, superior avionics upgrades, and reduced maintenance requirements would allow training squadrons to conduct the same levels of training with fewer aircraft.”

Both of those platforms would provide the respective services a primary trainer with digital glass cockpits, allowing students to advance in their training without having to transition from an analogue “steam gauge” initial trainer.

Rendering of the HPW3000 Engine. Courtesy ATEC

So except for possibly new trainers and the recent selection of the Sikorsky- S-92 as the next VXX presidential helicopter – all COTS programs – the big losers will be platform. The now-defunct Armed Aerial Scout program is the primary example of this. The winners will be systems and subsystems that can save the military money at a low cost… many of which are already under contract and in the pipeline.

One of those is the Improved Turbine Engine Program (ITEP) with Honeywell and Pratt & Whitney’s HPW3000 pitted against General Electric’s GE3000 for a 3,000-shp engine to power the UH-60s and AH-64s.

These engines are being developed to meet the Army’s increased altitude requirement. But perhaps more importantly, they will reduce specific fuel consumption, production and maintenance costs, and increase engine life by 20 percent.

Originally, the plan was to take both competitors into the production phase of the program. Now, however, budget cuts will probably only allow the Army to take both companies through the technology development phase of the program, or milestone B.

Tom Hart, vice president of sales, defense and space for Honeywell, said that “ideally you want both competitors to be fully funded through the (production) phase, but if they have to make a selection after the milestone B phase, that’s what we have to prepare for.”

Honeywell SVS. Photo courtesy of Honeywell

Hart also noted that the ITEP program is jointly funded by the military and the manufacturers, with the Army, Honeywell and Pratt & Whitney each picking up a third of the cost. “And it’s the same with GE and the Army,” he said.

Another example is development of a Degraded Visual Environment (DVE) system – or synthetic vision – that allows pilots to land safely in brownout (sand) or whiteout (snow). “That is an area where we see some funding coming through with the Special Forces, and we know that the Army continues to develop a program, although it is not out yet,” Hart said.

However, this is another area where the military and civil technology crosses paths.

Honeywell already has synthetic vision systems on the commercial side that can be applied toward DVE “although you have to add in additional features around radar so you can see right through the dust. We can overlay that across the synthetic vision backbone,” he said.

The Army has already awarded contracts to Rockwell Collins to develop what it calls the Degraded Visual Environment Pilotage System (DVEPS) for the Army’s Special Operations Aviation Regiment (SOAR) aircraft, primarily the MH-47G and MH-60M. Rockwell Collins said that the system is compatible with the existing Common Avionics Architecture System on those two aircraft, with the goal being to develop and qualify a DVE solution through a three-phase program to be fielded by 2018.

Also a winner in the modernization of current platforms that tie into the civil market is inertial navigation, currently used in numerous civil aircraft. Hart said that a Honeywell program currently produces the Embedded Global Positioning System Inertial Navigation System (EGI). “This is a commercially based system, modified as required for military application. It is used across the military platform board – every Chinook, Black Hawk, Apache and Kiowa has the Honeywell INS that’s founded on a commercial capability.”

He added that Honeywell “is continuing to invest” in INS development, “and we believe the next generation navigation system, which is going to have a lot lower weight, is going to have applications in the military environment. So we believe even with tighter budgets that there is going to be funding to buy that equipment because it’s an upgrade to the existing system.”

Linked to that is the increasing need for improved cockpit management, which will also be a big winner for the civil/military crossover with companies such as Garmin, Honeywell, Rockwell Collins and others providing both military and civil versions of avionics from nav/com to mapping. While increasingly advanced digital cockpits provide the pilots with massive amounts of information and capability, the human brain is still thousands of years old, so being able to deal with all that information and capability becomes the problem. Improved systems such as the INS (or EGI) already cut down on the pilot’s workload, and systems that will allow a civil helicopter to fly out to, and land on, an oil rig platform hands off are already being developed. These systems will easily transition into the military market.

Fortunately, with major growth in the civil helicopter industry – particularly with the oil and gas industry and VIP/executive transport leading that growth – there will be a lot of advancements in technology that can meet military needs. “Bell is putting out the 525 just to hit those markets, and those larger helicopters, the super medium twins, do carry a lot of the requirements that the military can use,” Hart said. “They will have inertial systems, they will have dual engines, they’ll have HUMS capability embedded on those aircraft – and that is where we see applicability of products we have on military aircraft fitting into the larger commercial helicopters like the Sikorsky S-92.”

With most rotorcraft technology now being less about the airframe and more about the subsystems, “many of the improved cockpit displays that have found their way to military platforms were created for civil aircraft,” according to Richard Aboulafia, vice president of analysis for the Teal Group. He also noted that having had plenty of military work tended to make the OEMs complacent. “Bell is only returning to new civil product development now that its defense work is under heavy pressure, resulting in the launch of the 505 and 525. Similarly, Sikorsky’s most ambitious new civil product in recent decades, the S-92, was created in the middle of the terrible post-Cold War defense spending downturn.”

Chuck Evans, director of marketing and sales support for Bell Helicopter Textron, pretty much backed that up, stating that along with introducing the next generation 525 and 505, “we’re also taking steps to modernize and upgrade our current products on the market.”

This includes upgrading the 407GX and its military counterpart, the 407GT, with a new glass cockpit. The 412EPI also got a glass cockpit and higher performance engine. Although the military budget has dropped, the continuing need for modernization and upgrades ensures there is still going to be plenty of money to go around, Aboulafia said. “Since DoD continues to fund improvements here, the civil side gets all it needs.”

And a lot of new upgraded systems will be needed. Although somewhat long of tooth, the H-60, AH-64 and CH-47 models are all working their way through the alphabet, with each new version requiring new systems, many of which are applicable to both civil and military platforms. Even the relatively new UH-72A is now being produced in eight different versions, from VIP transport to training, with each version requiring its own MEP. Deloitte’s Tom Captain noted that when the venerable B-52 reaches its expected retirement date in the 2040 timeframe, it will be 90 years old and have gone through three separate phases, from strategic bombing to dropping GPS laser guided munitions. “I suspect that we will see the H-60 and the Apache being re-purposed over time. They are perfectly good, and armed with new types of precision strike weapons and new sensors, and even convert to unmanned aircraft, we’ll see a lot more life to the programs.”

Even Bell can’t be considered a loser from the loss of the OH-58, although for the first time since the OH-13 flew in Korea, it will not have any of its products flying for the U.S. Army – with the exception of a few stray UH-1s left in a few support units. Bell has a strong civil line with systems that are applicable to military use. And those OH-58 Kiowa Warriors being grounded by the U.S. Army are not going to be mothballed out in Arizona. They still have a lot of life left in them, and most will be snatched up by foreign militaries, which will need long term service support from Bell.

“We will work with the Army on the OH-58D to see if there is FMS opportunities,” remarked Bell Helicopter President and CEO John Garrison during Quad-A. Two panels convened on the second day of Quad-A. Maj. Gen. Lynn Collyar, the Commanding General of the Aviation and Missile Command (AMCOM), hosted the first panel, which included most of the Program Mangers including the recently appointed PEO Aviation, Brig. Gen. Robert Marion. After that session, an industry panel took the stage. Moderated by Maj. Gen. Jeff Schloesser (Ret.), the panel included: Marc Paganini, President and CEO of Airbus Helicopters Inc.; Philip Dunford, COO of Boeing Military Aircraft; John Chadwick, President of Chadwick & Co.; Leonard Genna, President of L-3 Communications; Tom Harrison, CEO of Robertson Fuel Systems; and HAI President Matthew Zuccaro.

But just to end on a depressing note – there is still sequestration. If it returns in 2016, “it will get really rough to make up the cuts the Budget Control Act requests and the spending caps that are there,” Blades said.

This could mean the 100 additional UH-72As will be cut back to the 55 already programed for 2015, the CH-53K program could be postponed for another year and the UH-1Y/AH-1Z would be delayed and cost more, he said. —Andrew Drwiega, International Bureau Chief, contributed to this report.

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