And Military Buys Will Help

Moderate production of aviation turboshaft engines will take place in the near future despite an essentially flat civil turboshaft outlook, with the slight uptrend being propelled by major military rotorcraft programs (including re-engining efforts). According to Forecast International's "The Market for Aviation Turboshaft Engines" analysis, several of those programs will hit their stride later in the 2005-2014 period, compensating for weakening civilian turboshaft engine production. 

Re-engineering of existing US fleets (US Marine Corps AH-1s and CH-53s, US Army AH-64s and UH-60s) will also be substantial, though those programs will be subject to possible budgetary cuts. For the 2005-2014 timeframe, Forecast International projects the production of 21,544 aviation turboshaft engines, including 9,868 commercial and 11,676 military engines. Military sales will account for $7.68 billion of the total market's $11.26 billion in projected value.

Over half of the market activity will occur in the 1,200.01-2,500 SHP range, and more than 40 percent of those engines will be General Electric T700/CT7 series units. That engine program alone makes GE the largest player in the turboshaft market in terms of revenues ($3.24 billion, representing 28.8 percent of total market value). Turbomeca will, however, be the market leader in terms of units manufactured (5,209 compared to GE's 4,785). The US Army will be GE's biggest T700 customer, retrofitting UH-60s on a massive scale through 2014; eventually more than 1,000 UH-60 Black Hawks may be upgraded with T700-GE-701D engines.

As news of the US DoD's FY2006 budget began to leak out, considerable concern was raised that, as part of the planned $30 billion reduction over fiscal years 2006-2011, the increasingly controversial V-22 could see a reduction in its procurement ramp, resulting in a savings of $1.2 billion. Concerns have been raised that top defense officials will not support buying the V-22 aircraft (in its various versions) in large quantities until the program has completed further testing.

David J. Franus, Senior Analyst for Power Systems/Turbomachinery, summed up the current forecast by saying that "despite a few dark clouds, our current 10-year aviation turboshaft engine forecast is almost 13 percent higher than our previous 10-year forecast because some helicopter models are becoming increasingly more popular."

FMI: www.forecast1.com