Armed Helicopter Market - New Rotary Realities?

Armed Helicopter Market - New Rotary Realities?


September 2001



The award of the long-running Australian Air 87 competition to the Eurocopter Tiger opens a number of avenues for both the winning company and the armed helicopter market. It is not be going too far to suggest that there is now a very different market for this type of product compared with even five years ago, let alone a decade.
At A$1.3-billion ($670-million) for 22 Tigers, the deal looks good for both sides. The UPC one gets from this figure looks very competitive – looking at a variety of armed helicopter contracts over the past five years, it seems on a like-for-like basis to be slightly less than half the price for a Longbow Apache. But the figures suggest that Eurocopter has not had to enter a (self) cut-throat deal to win the first export customer. Instead, all the signs are that even with licensed assembly in Queensland, it will make money nicely.

At the same time, coming merely scant days after the Loi de Programmation 2003-08, an award for 22 machines at time when the French offtake of Tiger HAPs was cut back by 13 aircraft in the 2003-08 timeframe comes as a welcome breath of oxygen. It is even more vital for sustenance of the Tiger programme as the Australian machines are to be delivered from late 2003-early 2004 for a late 2004 ISD – a good few years before France's own procurement time slot. In effect, Canberra is, almost certainly accidentally, allowing Paris to slip its own programme and to still achieve economies.

As a first export contract, Air 87 is a major boost for Tiger, which had been struggling in the armed helicopter mart. In many markets – especially those such as the Middle East – Tiger had lost out to various AH-64 Apache models. In effect, the Gulf is an Apache fiefdom, what with Kuwait (soon?), Saudi Arabia, Bahrain, and the UAE all operators. Losses in the Netherlands and UK contests were serious blows to Tiger. It seemed that "serious" players had looked at the Tiger, and then turned away.

The UK competition raised serious doubts over Tiger. One was that it was too light – it did not carry enough weapons, or range of weapons. And of crucial concern was its battlefield survivability. This centred on the fact that although the mast-mounted Osiris sight could identify targets at up to 8km, the lock-before-launch Trigat LR missiles were limited to an assured lock-on range of some 4km, regarded as too close to call.

But is it the case that the way in which the UK ran its own attack helicopter contest is now obsolete? Has the world changed so dramatically since early 1996? Defence Analysis would argue that in many respects, it has. Key to the change is the realisation that major armoured threats are now not going to be really significant. When the US acknowledges that there are 75 per cent fewer significant and realistic armoured threats facing US forces today than in 1990, one must think again. Where are the major armoured threats? In the end, the overwhelming majority are in the Middle East, so it is understandable that both Arabs and Israelis should opt for Apache.



But in the Antipodes, how great an armoured threat might Australian forces be expected to face? Yes, Indonesia has some armour – but most is light and who else is there who might reasonably be expected to invade Australia or threaten an ally in the region while possessing major armoured assets? Many purchasers of what were called attack helicopters now have seen that they do not need an attack – anti-tank – helicopter, but rather they need an armed – that is to say scout – helicopter.

Traditionally, most scout helos were light on both sensors and weapons. With Tiger, the sensor suite is beefed up over those of previous generations of scout choppers. And comparison of weapon loads sees also Tiger getting extra marks. But how often in this day and age would one need to carry 16 Hellfires? Or even eight Hellfires, some AAMs, and some rockets? Isn't this weapons load just a bit de trop?

Is the result of Air 87 the first sign of a significant split in the armed helicopter market? There probably still will be customers for AH-64, especially the Longbow version. But for many potential operators it is too sophisticated, too expensive, and too heavy. Offering it to Australia for an armed scout requirement was a major effort – like squeezing a prize fighter into a tutu.

Now, the UK approach would be to say, "As the worst case will require the best and most complex equipment, always plan for the worst case – then simpler operations will be easier". This approach drives one always to buy the biggest, bestest and most capable. But is it always the best use of taxpayers' dollars or pounds? Is there not an easy medium, not necessarily the best, but sure as hell not the worst? With Air 87, isn't Canberra saying that it recognises that Tiger cannot carry and use what a Longbow Apache can. But it is cheaper upfront and in operating costs.

Will we now see the split of the attack helicopter market firmly into two with a number of countries, whose priorities are not based around the destruction of massed armour or the highest of intensity warfare, looking at helicopters such as Tiger rather than Apache? Might one expect to see a number of purchasers – Malaysia, Singapore, South Korea, Spain, Brazil as examples – all re-examining their options?

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