Memorandum from AgustaWestland
EXECUTIVE SUMMARY
A balanced fleet of helicopters on expeditionary
operations saves both resources by adding mobility and thus reducing
the overall force levels required and saves lives by reducing
risk and providing a unique capability for the evacuation of casualties.
Reducing the number of helicopter types
in service would create savings across the lines of development.
The Strategic Partnering Agreement between
the MoD and AW is driving down costs of both procurement and support.
There are more gains to be made if partnering is developed further.
The Integrated Operational Support concept
is improving the availability of aircraft and will, over time,
further reduce the cost of ownership of MoD aircraft.
Helicopter aircrew and maintainer training
is an area where opportunities exist for greater innovation and
savings to be made.
AGUSTAWESTLAND
1. AgustaWestland, a Finmeccanica company,
is a world leader in the helicopter
market. AgustaWestland has the technology required
to undertake the design and development of helicopters and tiltrotors
for civil and military .use from the preliminary analysis and
definition of operational requirements to the design, development
and production of transmissions, rotors, metal and composite structures
and avionics systems, as well as their integration into a complete
"helicopter system". The company also specialises in
the provision of helicopter maintenance support and training services.
THE ROLE
PLAYED BY
HELICOPTERS ON
OPERATIONS.
2. Over the last 50 years helicopters
have changed the way the Armed Forces fight maritime and land
operations. Although often perceived as expensive to procure and
support, helicopters bring capabilities such as firepower, range
and mobility, which enable the size of deployed expeditionary
forces to be smaller than they would otherwise have to be. This
is particularly the case in Afghanistan today where the distances
are great and the terrain unforgiving.
3. A balanced mix of attack, light, medium
and heavy lift helicopters gives force commanders greater flexibility
and tactical options. Helicopters save lives by enabling troops
to move beyond the threat of the ground-based IEDs as well as
the means to rapidly evacuate casualties from the front line.
Therefore the cost effectiveness of helicopters should be viewed
not simply in terms of platform and-support costs but also against
the wider savings of reduced overall force numbers, combat effectiveness
and the saving of life and limb.
CURRENT AND
FUTURE SIZE
AND STRUCTURE
OF THE
UK HELICOPTER FLEET
4. There is still a significant degree of
fragmentation across the UK's helicopter fleet with some 10[4]
different types of helicopter in operational service (not including
training). It is predicted that the overall MoD helicopter fleet
numbers will reduce in the next decade. Operating many relatively
small fleets of very UK bespoke helicopters[5]
is expensive in terms of support, training and modification costs.
As these smaller fleets are extended into old age the MoD is likely
to have to face increasing costs and safety risks due to obsolescence
and fatigue. There are, therefore, likely to be broad cost savings
across all the lines of development if the number of types in
service is reduced.
CURRENT PROCUREMENT
AND MAINTENANCE
PROJECTS
5. The Defence Industrial Strategy of 2005 and
the Strategic Partnering Agreement (SPA) signed by the MoD and
AgustaWestland (AW) in 2006 now provides the basis for joint
MoD/industry future planning and the maintenance of the UK's legacy
fleet. This has resulted in more cost effective maintenance for
the MoD based around the Integrated Operational Support (IOS)
concept, where AW is incentivised to achieve high levels of aircraft
availability and fixed maintenance costs with more of the risk
being taken on by industry than ever before. The Sea King and
Merlin IOS contracts were approved by the MoD only after savings
of greater than 10% and 20% respectively was demonstrated. Proof
of the benefit of these contracts is being demonstrated today
where the Merlin IMOS contract is taking corrective action on
the RN Merlins where corrosion has occurred with no extra cost
to the MoD. Prior to the IMOS contract the MoD would have had
to fund all of this additional activity. Industry has also demonstrated
it is prepared to partner on development and procurement with
AW taking on additional financial risk following the renegotiation
of the Future Lynx contract in order to match the MoD's funding
profile without any substantial loss of operational capability.
6. Partnering and the ever closer and more
open relationship that it brings, has the potential to enable
industry and the MoD to get together and plan strategically in
the interests of both parties. This would provide a more coherent
longer-term level of predictability that enables the prime contractors
to align and maintain the industrial health of their supply chain
as well as the operational sovereignty of key future capability
requirements as required by DIS. This is an important driver towards
keeping costs down. In addition, the closer the intellectual relationship
the greater the chances are of creating innovation and of sharing
the risks with increased confidence by industry to make PV investments.
However, the challenge for both sides is that while the UK approach
to competition remains one of the most open in the industrialised
nations, the relationship between competition and partnership
requires further clarification and understanding if partnering
is to move into its next, potentially even more productive, phase.
7. The important procurements relevant to
the Helicopter Inquiry's focus on Afghanistan and Iraq are concentrated
mainly on maintaining and increasing battlefield helicopter lift;
these include the recent Merlin Mk3A acquisition, Sea King performance
enhancements and the potential life-extension of the Puma. The
recent confirmation of the Future Lynx for the RN and the Army
will also provide a multi-role light lift capability as well as
reconnaissance and surface attack capabilities. An example of
a successful helicopter capability upgrade is the integration
of the Carson rotor-blades to the Sea King, which demonstrates
how a partnering approach has resulted in a competitor's blade
being fitted to the aircraft to the mutual benefit of the Armed
Forces and industry.
8. The Future Medium Helicopter programme
will potentially play a dominant role in the competition for the
scarce resources likely to be available for future procurements.
This will inevitably require the MoD to prioritise its requirements
and take risks against operational output as it is not clear that
all the programmes are affordable within the current budgets.
But it is also the responsibility of industry to play its part
to ensure that the provision of essential helicopter capability
is as affordable as possible. Industry would therefore welcome
clarity on the relative priority and costs likely to be afforded
to each programme to aid planning and risk related investment.
In addition a stronger focus for a coherent tri-service helicopter
strategy energised by a single senior point of contact within
the UK MoD would also be welcomed.
THE SUPPORT
STRUCTURE UNDERPINNING
HELICOPTER OPERATIONS
9. The support structure underpinning helicopter
operations is an area undergoing significant change. Prior to
the introduction of the Integrated Operational Support (IOS) schemes
the MoD was responsible for all elements of the aircraft's support
from the front line to depth maintenance facilities. This included
the timely and accurate ordering of aircraft spares and support
equipment. Industry provided 4th line support which centred upon
technical product support and additional repair and overhaul capacity.
10. The concept of an IOS scheme is to transfer
more responsibility and hence risk to industry, allowing the MoD
to focus on the support to the aircraft on deployed operations
and those preparing for deployment. Within an IOS scheme, MoD
defines a flying hour requirement and fleet size, industry is
then required to deliver the requisite number of aircraft to the
MoD. This entails industry being wholly responsible for all support
elements from determining the number of spares to buy and hold
in stock right up to managing the depth maintenance facilities.
Payment is also linked to the achievement of flying hours which
ensures that industry are fully incentivised to improve any weaknesses
in the aircraft or support structure.
11. Sea King Integrated Operational Support
(SKIOS) was the first contract to be signed in 2005 for the
support of 130 RN and RAF Sea King aircraft. The Integrated
Merlin Operational Support (IMOS) contract, signed in 2007, provides
long term. support that incentivises industry provide continually
improving performance for all Merlin helicopters. Although still
in its early phase, the IOS concept is successfully increasing
aircraft availability to the MoD at reduced cost and AW are planning
to further reduce the cost of ownership as a result of the incentives
inherent within these contracts.
12. Established in March 2007 as an
SPA initiative, the Joint Modifications Scheme (JMS) has corralled
work on modifications and Urgent Operational Requirements (UOR)
under one collaborative MoD and AW organisation. It has taken
on 490 modifications since its launch, including 40 UORs,
and is another positive example of how a MoD and industry partnership
can cut out process and time arid deliver an improved helicopter
capability to the front-line.
13. AW continues to develop a range of training
capabilities to meet the training requirements of all three services.
In particular, Apache training delivered through Aviation Training
International Ltd (ATIL a 50:50 JV with Boeing), is delivering
real benefit to crews as they train for operations; pressure on
front-line crews is also being relieved through the provision
ATIL instructors to supplement Army Instructors on the Apache
conversion unit. Training of helicopter aircrew and maintainers
remains an area where there are many opportunities for innovation,
particularly to reduce the time spent by service pilots in training
and to make savings through initiatives that reduce the overall
MoD balance sheet.
2 April 2009
4 Lynx (4 marks), Merlin (2), Apache, Chinook
(2), Puma, Sea King (5), Bell 412/212 (2), Gazelle, Dauphin,
AW109. Back
5
The average fleet size in 2009 of the top 8 types/marks
is around 50. This average figure is likely to reduce. Back
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