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Thu, May 10, 2012

U.S. Army Faces New Budget Reality

Capital Spending Reduction Will Cut Helicopter Purchases

The U.S. military, and Army in particular, will be doing more with less due to the wars overseas winding down and the threat of a large funding cut come the first of the year. The U.S. defense budget is flat, and that means the Army and Marine Corps will not be buying many new helicopters going forward. Money that had been budgeted for new aircraft purchases will instead be used to maintain existing aircraft fleets. At an American Helicopter Society meeting in Forth Worth last week, Army Maj. Gen. Tom Crosby, responsible for overseeing the service’s aviation programs, referred to his $7.8 billion budget for fiscal 2012. “Anybody see that going up? Not me” he said referring to the DoD budget that faces a potential $50 billion cut in January.

The Star-Telegram reports that in addition to recapitalizing its Black Hawk fleet, the Army wants a new light scout helicopter to replace its OH-58s (pictured). The industry has rallied around the program; Eurocopter has joined with Lockheed Martin to build a prototype, as has Bell Helicopter. Sikorsky is planning two prototypes to use its X2 high speed technology. The Army is planning to hold a demonstration to see what the manufacturers have to offer, but Gen. Crosby is not optimistic that he can buy any of it. He said “As much as I want and need a new armed scout, it’s unaffordable.” The USMC is in slightly better shape than the Army, although V-22 Osprey purchases from 2013 through 2017 have already been cut – and this is before the looming January cuts.

The military will likely have money for aircraft upgrades and modifications, but probably not for new aircraft. This shifts the focus to aircraft component manufacturers who will have opportunities to repair and improve existing fleets. Troy Gaffey, president of AVX Aircraft of Fort Worth, sees the affordability push as a positive for his company's proposal to refit the Army's aging OH-58D scout helicopters with new rotor systems. The AVX plan would dramatically boost performance and improve safety at low cost, Gaffey said.

FMI: www.army.mil

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