Slumping US Helicopter Market Forces Sikorsky to Look Overseas

Sikorksky S-92

Eight months after buying Sikorsky in an 'excess capacity' market, Lockheed is signing partnerships with non-US companies.

Lockheed Martin is hoping international helicopter sales will make up for slow commercial business at its newly acquired Sikorsky division, a top company executive says.

The firm is pushing its helicopters for a range of missions, from cargo hauling to VIP transport.

“Clearly the oil and gas industry has been a headwind for everybody in the market,” Lorraine Martin, deputy executive vice president of Lockheed’s mission systems and training business, said in an interview.

“Right now, since there’s a little bit of a downturn here on helicopters being used to go out to [oil] rigs and far-reaching places, there’s excess capacity,” she said. “Everybody’s a little dampened right now in that area, actually fairly significantly.”

Martin expects the oil and gas market for helicopters rebound “hopefully” next year.

In the meantime, Lockheed is looking for other missions for its S-92 helicopter, a popular aircraft used for oil and gas operations, including as VIP transport in 11 countries. The U.S. Marine Corps will fly the U.S. president in an S-92.

They’re also touting the helicopter for search-and-rescue missions. The firm Bristow uses the S-92 to fly these types of missions in the U.K.

The civil helicopter market has taken a hit since oil prices began dropping in 2014. Last year, Sikorsky cut 1,400 jobs as demand for helicopters to fly oil workers to offshore rigs has declined. Earlier this year, Honeywell, a major aircraft engine supplier, said it expects 4,300 to 4,800 civilian helicopter deliveries between 2016 to 2020. That’s about 400 fewer than it predicted in its 2015 five-year forecast.

Still, Martin believes “there are some really great growth markets internationally.”

Lockheed recently inked a deal with Turkey to build Blackhawk helicopters there and is working a partner arrangement in Saudi Arabia. The company is also is eyeing helicopter sales in Germany.

“Helicopters and the ability to have multi-mission capability right now is in very high demand around the world,” Martin said.

Lockheed announced plans to buy Sikorsky from United Technologies for $9 billion a year ago and took control of the helicopter maker in November. Since then it has been merging the workforce, its IT systems, and healthcare. “The integration is going really well,” Martin said.

Martin, who ran the F-35 Joint Strike Fighter program before becoming the No. 2 at Lockheed’s missions systems and training business, was put into her current position to provide extra leadership during the acquisition, which doubled the size of the division to more than 33,000 people. In addition to Sikorsky, Lockheed moved its command and control, intelligence, and cyber work into the division as well.

Close [ x ] More from DefenseOne