Political considerations working against EH101

AgustaWestland, the Anglo-Italian helicopter manufacturer, is facing a host of challenges as it chases contracts for its EH101 in the US, Canada and Australia, and seeks to build on the significance of its recent contract award in Japan. The increasing competitiveness of the helicopter market and the political pressures that go hand in hand with major defence procurements are combining to make life difficult for the European company.

The Canadian Maritime Helicopter Project (MHP) may be one project that AgustaWestland will be glad to see the back of, win or lose. The C$3.1 billion procurement programme for 28 maritime helicopters has been exceptionally longwinded and more than a little controversial. The latest twist is likely to work against the EH101.

Lockheed Martin Canada and NHIndustries (a joint company formed by Agusta, Eurocopter, Eurocopter Deutschland and Fokker Aerostructures) have joined in a formal teaming agreement, which has seen NHI withdraw the NH90 F from the competition and the new team will offer the helicopter under the imaginative new name of the NH 90-C. Not only is Lockheed Martin the only Canadian based company leading a bid for the MHP, but it has the experience of similar maritime helicopter projects in the US and the UK. US firm Sikorsky is also competing with its H-92 medium lift aircraft.

These factors are likely to work against the EH101 despite the fact that it can boast the advantage of commonality as the Canadian Coast Guard already operates a fleet of EH101 Cormorants as search and rescue aircraft. The EH101 has had its work cut out to win the competition since Canadian Prime Minister Jean Chretien cancelled a previous $5 billion contract with AgustaWestland to purchase EH101s on his ascent to power in 1993.

The feeling in the AgustaWestland camp is that until Chretien steps down in February next year, the project can not go ahead. Marc Halloran, Communications Manager at Agusta Westland said "Nothing will happen until Chretien goes. The whole situation is mired in politics."

The Lockheed Martin team is making all the right noises about the way the project is being run despite the allegations and insinuations from the Canadian press that have dogged its development. The Ministry of Defence has been accused of altering the requirements to ensure that the EH101 is at a disadvantage. Rod Scotty, vice president of business development for Lockheed Martin Canada, contented himself with saying that "the requirements are as stringent as I have seen for a maritime helicopter."

For its part Sikorsky may have its eyes on a more prestigious award closer to home. The US firm is intent on making sure that the next helicopter the US President rides in is the Sikorsky VH-92, which is competing for the US Marine Corps contract for the HMX-1 fleet of helicopters that transport the most powerful man in the world. Competing against them is the US101, a version of the EH101 this time with AgustaWestland in collusion with Lockheed Martin.

Again politics is likely to overshadow the relative merits of the helicopters themselves beyond the required capabilities. It has been reported that British Prime Minister Tony Blair has lobbied President Bush on behalf of the US101 and there is a feeling that the US owes the UK for its support over Iraq. However, the chances of the AgustaWestland/ Lockheed bid may come down to US perceptions.

"They (AgustaWestland) have a good platform," said Matt Abraham, manager of ATKearney, " but is the 101 perceived in the US as a UK helicopter or a European helicopter. It would be better if it is seen as British."

Even with the addition of US influence in the shape of Lockheed Martin, Abraham thinks that there may still be too many challenges for the 101 to overcome. "Lockheed Martin may be the tool to open the door to the US market but is that enough." In the end the idea of the US President taking a European ride may be unthinkable to too many stateside.

At least politics may not be the downfall of the EH101 in its bid for the Australian Project Air 9000, a procurement process for 12 troop lift helicopters for the Australian Defence Force (ADF). The problem here is technical, the Australians want a helicopter that will fit in a C-130 transport aircraft, and the EH101 won't.

So while the recent Japanese breakthrough was a significant one for AgustaWestland, it may not represent the start of world success in an increasingly competitive market.

REF XQQEE XQQAS XQQPC XQQAR XQQTY XQQFL