19-May-2014 Source: Rostec
Mikhail Mil, the famous Soviet aerospace engineer, once said that Russia, with its vast lands and lack of good roads, was cast for the helicopters. The Russian helicopter industry is the only branch of the Russian machine-building industry that has been showing sustainable growth during the past decade. According to the Helicopter Industry Association data, production of helicopters in Russia has increased in 3.5 times from 2004 to 2013. During the period from 2009 to 2013, when the severe impact of the global financial crisis made itself felt, the industry demonstrated stable growth (66%). According to the results of 2013, the Russian Helicopters manufactured 303 helicopters and supplied 275 of them to the customers. In 2007, the corporation consolidated several enterprises of the industry. By comparison, in the year of 1999, when the production volume was the lowest after the collapse of the USSR, the total number of new helicopters assembled at the Russian plants was 40.
The profit in this branch of economy is growing correspondingly. According to the published information, the revenue from production of civil and military helicopters between the years of 2008 and 2013 increased from RUB 31 million to 138 million. Even the Oil&Gas sector does not show such a significant annual growth (20-30%). In fact, if to continue making comparisons with the main product that contributes into the Russian budget – that is oil, – it must be noted that the export geography of the Russian helicopters is even wider than of the products of the Oil&Gas industry. The Russian helicopters are exported into more than a hundred of countries worldwide; they are supplied to practically all key regions, including Europe, Latin America, Central and Southern Africa, South-East Asia. Even the United States, where military helicopters are manufactured by Bell Helicopter, Sikorsky Aircraft and Boeing, have procured the Russian logistic support helicopters MI-17 V-5 for the Afghan fighting forces.
Positions of the Russian Helicopters in the global helicopter engineering market are strong as well. In total, according to JetNet AvData, nearly 29 thousand of civil gas-turbine helicopters currently operated in the world are manufactured by four main international market players, including Airbus Helicopters (former Eurocopter), AgustaWestland, Bell Helicopter and Sikorsky Aircraft, as well as the Russian Helicopters. The MI-8/17 aircraft amount for more than 8 thousand units among the world fleet of helicopters. According to the data provided by the Upcast Agency, the MI-8/17 is the most widely used gas-turbine helicopter in the world. According to the Russian Helicopters data, the world market share of the Russian heavy-class helicopters, where Russia traditionally holds the leading position, is 56 percent. In lower classes, however, particularly in the market segment of light helicopters (according to the international classification) the Russian products are less widely presented. This is determined by certain historical peculiarities of development of the domestic helicopter industry.
By financial performance, the Russian Helicopters are decent rivals of the “giants” of the global helicopter market. According to The SIPRI Top-100 Arms-Producing and Military Services Companies 2012 rating, the sales volume of the military products of the Russian company in 2012 was RUB 3.52 billion (or 28-percent growth). For reference: the Sikorsky Company forming the part of one of the U.S. largest industrial groups – United Technologies, showed 9-percent drop by the similar indicator, and the Italian AgustaWestland showed nearly 15-percent decrease. The Russian helicopter production may hope for the stable high demand in the future; according to the 2013 data, the business portfolio of the Russian Helicopters values for USD 12.26 billion. The weight of this value can be compared by the similar figures of the Company’s rivals: Bell Helicopter (affiliate of the American Textron Corporation), that produces military as well as civil helicopters, has reported on the business portfolio evaluated in USD 6.45 billion for the year of 2013.
Future Technological Background
Relatively quick restoration of the Russian helicopter industry post the collapse of the USSR can be explained by a whole lot of external and domestic factors; the last but not least among them is a wide-scale modernization of the production facilities. It should be noted that the process of innovation has covered not one or two plants, but the whole industry, which comprises helicopter plants, companies supplying the spare parts, service companies and design offices. Since 2008, the Kazan helicopter Plant, the Far East Progress Arsenyev Aviation Company, the Ulan-Ude Aviation Plant, the Rostov Helicopter Plant and the Perm Reductor-PM, as well as the other companies of the Holding, have been in the process of technical modernization. In the first six months of 2013, the investments into total renovation of the industry increased to 46.7% (compared to the same 2012 period), reaching RUB 8.3billion. RUB 4.3 billion of them was invested into production development.
Facilitating the Future
The plants of helicopter industry have lots of customers, but they are busy with long-term prospects nonetheless. The key area of future plans is capturing of the new market niches, such as light and medium helicopters. All experts agree that the market interest of the Russian Helicopters concerning this category of aircraft is related to the poor diversification of the production line of the Holding, in view of clear overbalance of the military products. In order to be free from demand fluctuations in the military segment of the market, the Company should develop and expand the model range of civil helicopters. Traditionally, the Russian helicopter manufacturers hold strong positions in the niche of heavy and super-heavy aircraft, where the Russian vendors account for 56 percent and 74 percent of the global market, respectively. However, Russia and the world have recently demonstrated demand for the lighter models. According to the Helicopter Industry Association, the export volumes of light and medium-class helicopters to Russia in 2013 increased in 50 percent, compared to the previous year (145 helicopters in total). The Russian helicopter manufacturers have started their works in this direction: Light helicopters (as per the Russian classification) Ka-226T and Ansat are being prepared for the market, and the mutual project with AgustaWestland – creation of a helicopter with maximal gross weight 2.5-3 tons – has also been started.
But the most ambitious project in the segment of medium civil helicopters is RACHEL. This bright name – RACHEL – is the abbreviation of Russian Advanced Commercial Helicopter. In future, this model will replace the most successful product of the Russian helicopter industry – MI-8/17. During the development period, this project has come through several fundamental changes – the priorities were shifted from ultra-fast characteristics to efficiency and environment friendliness. Priorities were selected in the Western manner, that is, after thorough marketing investigations carried out in collaboration with aircraft operators. As a result, RACHEL will become a multipurpose commercial helicopter with maximal gross weight from 10 to 12 tons, which will be able to carry from 21 to 24 passengers. The specialized models such as ranger, patrol, and medical variants also being designed.
Another development on the class of light helicopters, that is Ka-62, will be also aimed for wide use. Due to its vast cabin, Ka-62 can carry 12 to 15 passengers (corporate and passenger options), or can be used for specific missions. This is the first civil helicopter designed by the Kama Design Bureau with a single rotor, and its antitorque propeller is made under the “fenestron” scheme. This project is implemented within the framework of international cooperation. Ka-62 is equipped with modern Ardiden 3G engines produced by the French Turbomeca that meet strict requirements to environmental friendliness and fuel efficiency, and FADEC engine control.
The end of the past year saw the flight tests of another development – the passenger MI-38 helicopter equipped by engines of the Russian production. The evident advantages of this aircraft include its multiple uses, such as cargo and passenger transportation and “flying hospital”, together with its high cruise speed (295 km/hr) and high flying range (1200 km). Certification of MI-38 should be completed and its commercial production should be started in late 2015 – early 2016.
The global strategy of the Russian helicopter industry aims to occupy 20 percent of the global market by the year of 2020. Prerequisites to achievement of these objectives are obvious – the world is depending on helicopters more and more. Uses of helicopters are rapidly widening; in critical situations, helicopters are impossible to replace. Oil and gas prices that determine the dynamics of the supply for helicopters are stable; demand in the sector of military export is high; the government contracts have been renewed; and the number of private and corporate owners of helicopters is growing. A little is left to do – not to wind down.