LDN - Business

German military kicks off heavy lift helicopter competition: source

[December 15, 2017]

By Andrea Shalal

BERLIN (Reuters) - Germany's top military official has approved plans to buy 45 to 60 new heavy-lift helicopters in a competition valued at nearly 4 billion euros ($4.72 billion) that will be decided between the two largest U.S. weapons makers, a source familiar with the decision said.

General Volker Wieker signed a document that kicks off the long-awaited competition between Lockheed Martin Corp's <LMT.N> massive CH-53K helicopter and Boeing Co's <BA.N> smaller twin-rotor CH-47, but stressed that no decision had been made on a preferred helicopter model, the source told Reuters on Friday.

The defense ministry expects to issue a request for information in the second half of 2018 after completing a fleet capability study, with a contract award seen in mid-2020.

Initial deliveries would begin in 2023, replacing Germany's existing fleet of CH-53G aircraft, the source said.

Wieker's decision calls for a combined contract to include both manufacturing and maintenance, defying a call by Airbus <AIR.PA> and other German firms that the ministry split the contract into two segments.

The terms of the procurement will require that maintenance is supported in Germany, but would not stipulate an award to a German company, the source said.

No comment was immediately available from Lockheed, Boeing or Airbus.

Both Boeing and Lockheed already work closely with German industry and have said they would seek to form partnerships to build and maintain a future German helicopter.

Some military sources had expected the competition to begin only after a new German government was in place. But Wieker decided to press ahead amid signs it could take months until Chancellor Angela Merkel forms a new ruling coalition.

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Chief of Staff of the German Armed Forces Bundeswehr Volker Wieker arrives for a news conference in Berlin, Germany December 3, 2015, on the deployment of German aircraft to Syria. REUTERS/Hannibal Hanschke - LR2EBC30UJ9MC

The ministry has proposed spending 3.84 billion euros on the program from 2018 to 2029, although it must still be approved by parliament.

Boeing's CH-47 Chinook, already used by eight other NATO countries, will compete against Lockheed's Sikorsky CH-53K, a redesigned version of the CH-53G that Germany now flies and which the U.S. Marine Corps will start using in combat in 2019. Israel is also considering buying 20 of the Lockheed aircraft.

The CH-53K will make its international debut at the Berlin air show next April.

Two Boeing CH-47 Chinook helicopters were brought to a conference in Germany in July, but the Lockheed aircraft, just entering production for the U.S. Marine Corps, was not on site.

German military officials will now study the capabilities of the two helicopter models, comparing their effectiveness in different scenarios, the source said. Some officials favor the CH-47 which they say is combat-proven and cheaper, but others say the larger CH-53K would allow growth in future missions.

The U.S. Marine Corps has said the average cost of the huge aircraft will be around $88 million per aircraft. The cost could drop somewhat if Germany, Israel and Japan also buy the planes.

Experts say it would cost less for Germany to buy the Chinook, but that helicopter will require several upgrades in coming years that could add cost. It also carries less, so it takes more flights to accomplish the same mission.

(Reporting by Andrea Shalal; Editing by Adrian Croft)

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