Examination of Witnesses (Questions 1-19)
MR NICK
WHITNEY, MR
DAVID PITCHFORTH,
MR DEREK
SHARPLES AND
MR ALEX
SHARP
19 MAY 2009
Q1 Chairman: Good morning. Could I ask
you please to introduce yourselves and to just give a very brief
outline of the industry you are here to represent. Who would like
to begin?
Mr Sharples: My
name is Derek Sharples. I am the Executive Vice President for
Support and Services in the Eurocopter group of companies. I am
here today representing the Eurocopter manufacturer, the original
equipment manufacturer and supplier of Eurocopter products to
the UK Armed Forces
Mr Pitchforth: I am David Pitchforth.
I work for the Boeing company and I am the Managing Director of
UK Rotorcraft Support here in-country; and I am here to represent
Boeing as we stand with our UK footprint.
Mr Whitney: Good morning, Chairman.
My name is Nick Whitney. I am Senior Vice President for the UK
Government Business Unit within AgustaWestland. I am responsible
for MoD business for AgustaWestland.
Mr Sharp: Good morning, Chairman.
Alex Sharp, Sikorsky Aircraft in the United States. I am the Regional
Sales Manager for Western Europe.
Chairman: Thank you. We have this session
which will last for about an hour with you, and then we will move
on to some representatives of other companies. Are there any declarations
of interest?
Mr Jenkin: Chairman, may I draw attention
to an entry on the Register of Members' Interests under "miscellaneous
and unremunerated items". I organised a charitable event
for combat stress earlier this year; it was sponsored by Finmeccanica.
Mrs Moon: Perhaps I should declare that
I did an Industry and Parliament Trust fellowship, part of which
was with Finmeccanica.
Q2 Chairman: Could you please explain,
and let us start at the other end, which UK helicopters you currently
are involved in, and which projects your companies are involved
in?
Mr Sharp: I am pleased to be here;
thank you for allowing me to come and speak with you. Sikorsky
has had a long history in the UK. If you go back almost 50 years,
Sikorsky actually manufactured the first helicopter that was used
by the UK military, the R-4. Subsequently, under licence to Agusta
or to Westland at the time, a number of helicopters, S-51, S-55,
S-58 Wessex and the S-61 Sea King, were all built under licence
here. We are currently involved with marketing, of course, to
MoD on potential platforms that are used by the US Government
in the Middle East; and to that end we are here to support and
give testimony as to what helicopters might fit best and work
best for the British.
Mr Whitney: Principally, we support
a number of rotorcraft platforms. If we look at Apache, the attack
helicopter which is actually doing good service in Afghanistan
as we speak; the Merlin Mk1 which is in service with the Royal
Navy; the Merlin Mk3 which is in service with the RAF, but also
in service in Iraq; we also support the Sea King aircraft in terms
of its role with the RAF in search and rescue; and the Mk4 aircraft
in Afghanistan, and the Royal Navy. We also support the Gazelle;
and we have had involvement with Puma. We do a number of modifications;
and we are also installing modifications on some Chinook airframes.
Q3 Chairman: While you support some
of them, you make some of them as well? There is a distinction.
Mr Whitney: We have manufactured
Apache, Merlin, Sea King and we support the other aircraft. We
do not manufacture Chinook.
Q4 Chairman: Mr Sharp, the Sea King
is a Sikorsky design?
Mr Sharp: Yes.
Mr Pitchforth: We are primarily
involved in the Chinook aircraft, which we are the manufacturers
of. We also support that aircraft here for the UK through our
Through-Life Capability Management service; and have a number
of other projects to do with the Chinook which are to do with
modification of the UK fleet: the Mk3 project; and also the Julius
Project. We act as a sub-prime to AgustaWestland for the design
authority of the Apache aircraft, which was made under licence
by Westland Helicopters at the time.
Mr Sharples: Chairman, thank you
very much for this opportunity to address you this morning. Eurocopter
is the world's largest manufacturer of helicopters. Last year
we delivered 585 helicopters to a market base of 2,500 customers
around the world in 140 countries. In the United Kingdom our fleet
in service is more than 400 helicopters, representing about 42%
of the UK fleet of helicopters.
Q5 Chairman: You are talking there
about the civilian fleet?
Mr Sharples: Generally it is civilian
and military. In the military fleet in the UK Armed Forces, we
have 122 helicopters in service, including 44 Puma HC1s, more
than 40 Gazelles and 38 helicopters at the Defence Helicopter
Flying Training School in Shawbury. We also support and supply
helicopters to the UK Police Forces. 27 UK Police Forces operate
our helicopters. In terms of contracting, we are involved through
the TLS, the Through-Life Support Contract, to support all of
the UK Armed Forces' Pumas and Gazelle helicopters; in total 44
Pumas and 119 Gazelle helicopters. Of course we are a preferred
bidder and down-selected for the Future Life Extension Programme
for the Puma helicopter fleet in the RAF.
Mr Whitney: Chairman, could I
just make one other point. I have omitted to mention of course
that we also provide and support the existing Lynx aircraft; and
indeed the new aircraft which has now been renamed the Wildcat,
which is currently in build.
Chairman: I think we knew that, but thank
you for reminding us. We have a lot of questions to ask and we
have less than an hour to get through them. You do not need each
of you to answer each of the questions. If you feel that the point
you would have made has already been made, there is no need to
say it again; there is no need to come in on everything.
Q6 Mr Crausby: Of the nearly 600
helicopters that we own, I understand we have 17 different types
and within those types there are several subset marks: for example,
we have four different marks of Lynx, three of Merlin, five of
Sea King. So many subsets are bound to cause problems. Can you
describe to us some of the problems that arise from having so
many fleets within fleets?
Mr Whitney: There are good reasons
for having fleets of aircraft and fleets within fleets. If we
look at the Merlin aircraft we have a number of aircraft that
were procured for the RAF. We have added to that with six aircraft
coming with a separate designation, but operate alongside them.
There are 44 aircraft that were originally procured for the Merlins;
so you end up with a designation Mk1, Mk3, Mk3a. Where you get
problems I think is when you modify smaller batches of aircraft
within those fleets. That is when you get the problems in terms
of support. You get a different mark of aircraft and this is particularly
relevant when you are on operational deployment and you are looking
to fit certain pieces of equipment for operations that you will
not fit to the rest of the fleet. That can give difficulties in
terms of support and maybe training and other areas and lines
of development.
Q7 Mr Crausby: We are given to understand,
for example, that on training some of our crews have to train
on one type of helicopter only to go into operation on a completely
different sort. Is that a problem we can resolve?
Mr Whitney: I do not think you
can train on a different aircraft from the one you are going to
fly in theatre. You can probably train on a variant that is slightly
different and does not necessarily have all of the equipment,
and there will have to be some training means of catching-up that
training. Yes, you could be forced to operate in that manner.
Q8 Mr Crausby: Is there a general
acceptance that we have too many types and too many subsets? Would
we not be better off with fewer? What sort of improvements could
you see with a more coherent fleet? I know it is easier said than
done but from our point of view is that the place to be, to have
less types, less subsets and a more manageable fleet; or would
that deny us some flexibility?
Mr Whitney: I think personally
my view would be, yes, that is the place to be. You can get greater
economies of scale by having larger fleets. There is a fixed cost
associated with operating aircraft. The more aircraft you have,
the more you spread that fixed cost across your fleet. Equally,
the points you raise about having small fleets, the training burden
and the additional cost that that incurs, the problems that that
incurs can all be solved by having reduced numbers. You need the
budget to be able to make that happen.
Mr Sharples: Could I reply to
your question in a different way. You ask: what are the principal
problems of having so many fleets inside fleets, and there are
two important problems for operating aircraft front line in that
regard. One of them is configuration management. It means understanding
and controlling what is on your helicopter; knowing what is on
your helicopter; and therefore being able to provide the correct
parts for that particular sub fleet. Understanding the configuration
of the helicopter and controlling the configuration is one of
the challenges of multiple fleet operations. A second one, which
is closely linked, is obsolescence management. It means ensuring
that you are able to manage out of your fleet small batches of
obsolescent equipment, and ensure that you are providing from
the supply chain replacement parts which are new and current and
available in small batches. In the industry one of our key challenges
is to manage the supply chain which is often enthusiastic to be
involved in high rate production, but not so enthusiastic to be
involved in small batch manufacturing for subsequent small fleets
in service, particularly when configurations of aircraft change
during service. If I could just make a comment as well on your
training question: it is true that in our Armed Forces we train
our pilots, and therefore our technicians as well, on different
helicopters from those that are operated front line. Of course,
there is a cost issue there. First of all, we are training
ab initio from the beginning, and therefore we want to train
our young pilots on simple aircraft in order to acclimatise them
to airworthiness and to basic flying training; and gradually step-by-step
the training system becomes more sophisticated as we move towards
the front line, and therefore towards the aircraft that they will
eventually operate in theatre. Therefore, my point would be that
it would not be cost-effective to use the same aircraft for training,
in particular for basic training, as is used front line, because
of course these are very expensive and sophisticated weapons systems.
Q9 Chairman: Mr Sharples, would you
suggest that it would be a wise way to train pilots to train them
in the UK on, for example, analogue cockpits and then to send
them out to Afghanistan, so that the first time they are using
digital cockpits is when they are in operation against the Taliban?
Mr Sharples: I have some personal
experiences as for 25 years I was a Fleet Air Arm helicopter pilot
and went through the military flying training programme and operated
Sea King front line in theatre. To answer your question, I think
it is more cost-effective to train pilots on cockpits and machines
which are similar to those that they will eventually operate front
line. To answer your direct question, where available, glass cockpit
training is available at ab initio level these days in
simple helicopters; and where we can, we should make available
that level of training to our pilots.
Q10 Chairman: "Where we can":
but surely we should be training pilots before they go out to
Afghanistan on theatre-entry standard helicopters?
Mr Sharples: Yes, I would have
to agree. It is certainly true in other sectors of the aerospace
industry and the general aviation sector, a light aircraft sector
these days. You can find light aircraft with similar avionics,
screens, layouts, and systems in light aircraft similar to very
sophisticated Boeing and Airbus aircraft. Yes, you can familiarise
and you should where possible familiarise on systems which are
similar to those you will operate in-theatre. It is clearly cost-effective;
it is clearly more efficient training; and it clearly brings to
the pilot more familiarisation with the systems that they will
ultimately be asked to operate in battle.
Q11 Chairman: But in battle their
hand should go instinctively to the right place, so they should
know exactly where the levers are without having to think about
it. So they should have been doing it for a long time, is that
not right?
Mr Sharples: I think the concept
of commonality is one which is already prevalent in the aircraft
industry; is one which is not so prevalent in the helicopter business;
would certainly bring additional advantages to familiarity and
therefore reduce training, more reliability, greater flight safety.
Mr Sharp: Chairman, going back
to the training question, I do not disagree. Certainly in the
US my experience, 10 years on fixed wing with the US Navy and
then as a reserve pilot, was that the more commonality you have
in training, clearly gives you benefits in the field—no
question. I think we have seen a move certainly across the Pond
towards similar systems. Certainly the great reliance on simulator
training of a glass cockpit gives you that advantage without tearing
up airplanes. I would like to go back to an earlier question (because
I think it is important to understand) that my colleagues here
talked about in terms of configuration control. Configuration
control through small subsets is difficult. It is not uncommon
to have little problem with that domestically at training bases,
potentially here in the UK or in the US. The issue is really accentuated
when you have long supply lines to places around the world and
it is hard to get the right part to the right airplane at the
right time. There is a balance because, as a former commander,
I know that you need that right piece of gear at the right time
to get the mission accomplished, so there is a balance. You cannot
let the pendulum swing all of one side and say, "We'll only
have this one kind". I would mention, you bring up good points
in terms of sets within sets; and really you all set the standard
many years ago in the fixed wing community. You had many different
types of air vehicles and you came out with the idea of the MRCA
and you replaced Phantom and you replaced Lightning and you replaced
others, the Buccaneer. The issue at the time, I think I recall,
was that people were saying you were going to introduce a new
type so we should not do it; but at the end of the day, you introduced
a new type and you in fact retired three other types. It is not
the actual type, of course, it is the cost savings. It is that
long logistical tail, a 7:1 ratio that you are getting rid of.
If you had more of a multi-role face, where you could take a single
helicopter and mould it into a multi-role helicopter, then I think
you are probably going in the right direction.
Chairman: That is extremely helpful.
We are just about to get onto that series of questions now. Mike
Hancock?
Q12 Mr Hancock: Can I just go back
to the question about training and pilots being trained, say,
on Apaches here which have one type of configuration and then
they go to theatre and they are flying a different type. Is it
as easy as what you have said, Mr Sharples, to switch from one
style of training to actually flying in combat?
Mr Sharples: I am afraid I do
not have experience of flying the Apache. I have flown multiple
types of Sea King. The difference training can be relatively minor,
but it really depends on how much difference there is in terms
of systems management and systems on the training machine compared
to the weapon.
Q13 Mr Hancock: For how long on a
relatively new aircraft like the Apache can it be possible to
have that sort of variant?
Mr Whitney: I think it is important
to understand there is a process of learning to fly a helicopter,
and you start at the defence helicopter flying school and you
are introduced into the rotary wing concept on relatively simple
aircraft; you move up to more complex aircraft; and you then go
through a progress where you convert to role, and convert to type.
Converting to type is a training that you go through to learn
to fly, let us say, a Lynx or an Apache; and this is taking you
from a basic helicopter where you have done single engine and
twin engine, and you go into a specific training phase to learn
to fly the Apache. You then go conversion to role, which is teaching
you to fight the Apache, or to use the aircraft in its true combat
environment. This is not a week's training; it is many weeks of
training. So pilots will not go into theatre and get into an aircraft
and not know what to expect. I think that is a false illusion
if that is being taken by the Committee. There are procedures
that they have to go through. I think the point you do get is,
with these small fleets within fleets where you might be modifying
aircraft for the battlefield environment quickly but through the
urgent operational procedures, you could end up where there is
some additional training or some equipment that is fitted to those
aircraft that is not "not understood" but might be not
on the training aircraft and you will have to find alternative
means of training—whether that be simulation, textbook etc.
Q14 Mr Hancock: Can I ask then about
the Through-Life Commitment that you have to service these aircraft,
and where the delays occur. If you take on the responsibility
to provide through-life maintenance for a particular helicopter,
why are there such long delays in getting parts for these helicopters
when you have signed up to give the service which you said you
would at the initial stages?
Mr Sharples: I would like to think
with the Through-Life Support Contract that we have recently signed
there will be less delays in future than there have been in the
past prior to signing the contract. I think one of the advantages
that the OEM brings to the operator with through-life contracts
is that we are able to bring our full resources of logistics,
maintenance and technical support to the operators, which the
operators have not necessarily had access to previously. In Eurocopter
we have in the region of €500 million of inventory located
in stock logistic centres around the world. One of the core competences
necessary to manage the spares supply chain is the ability to
anticipate and forecast what will be needed in terms of spares
for maintenance. That may sound simple but it is not, for the
simple reason that most spares required for helicopters are in
fact very rarely called up from the inventories. It is quite common
for 80% of all spares to be on stock for more than three years
and never called. So you have a very small number of high rotating
parts, and a very large percentage of slow movers. Therefore,
one of the key competences is to predict which parts will be required
and which parts are to be therefore stored in an inventory. Through
the OEMs, the Armed Forces have access to a core competence which
is logistics forecasting.
Q15 Chairman: We will have to move
away from Ministry of Defence abbreviations here.
Mr Sharples: The manufacturing
supply chain. One of the things that the manufacturing supply
chain is most capable of doing is managing the supply chain. We
have more than 2,500 suppliers in Eurocopter and one of our key
tasks is to manage that supply chain so that they can deliver
on time to our facilities. You ask: why are there difficulties?
The simple answer is: it is a great challenge to manage the supply
chain from anticipation, through to procurement, inventory and
eventually delivery of parts to a diverse fleet in service in
often very remote geographical locations.
Q16 Mr Hancock: That is what you
have signed up to do, is it not?
Mr Sharples: Yes, we have, and
we have signed up to deliver according to KPIs with the MoD in
terms of performance.
Q17 Mr Hancock: So why is there so
much cannibalisation going on? If 80% of the spare parts stay
on the shelf for up to three years you will have worked out by
now that the 20% is the critical area, would you not? Why is it
that helicopters are regularly cannibalised and some of them never
fly again, because that 20% is not forthcoming?
Mr Pitchforth: I would like to
talk about our TLCS programme.
Q18 Mr Hancock: I would like you
to answer that question, first, about why it is that the parts
are not available and so much cannibalisation goes on?
Mr Pitchforth: I do not recognise
the hypothesis you are making, because under TLCS we are delivering
more aircraft than contracted. We are contracted to produce 27
aircraft and currently today we have produced 29 aircraft, so
that is above our target. For those items that are in scope we
have very, very low levels of cannibalisation. We do not allow
cannibalisation on our depth line, unless it is for an aircraft
state in theatre which requires that to be removed and taken to
theatre urgently. Under TLCS I do not recognise the cannibalisation
statement and/or the long lead time. We are producing aircraft
above the contracted and targeted level; and for the items in
scope we are above our KPIs on component production to theatre
also. I would be interested to understand this specific area.
Mr Hancock: You do not think that helicopters
are regularly cannibalised to provide spare parts for operational
aircraft?
Q19 Chairman: Or not Chinooks anyway!
Mr Pitchforth: The only time a
Chinook would be cannibalised is if there was a state in theatre
where it needed a component that was not available in the supply
chain; otherwise we resist that as much as we can.
Mr Whitney: I have to take the
question. We have two support schemes in place: one supporting
the Sea King, which we call SKIOS; and one supporting the Merlin
which is called IMOS. These are long-term support contracts with
longer pricing periods so we can see a long-term throughput, and
that enables us to work with the supply chain; indeed partner
with the supply chain; partner with the Ministry of Defence. Your
direct question about cannibalisation, yes, it happens; it is
happening today on Merlin; it is happening on Apache. I think
the simple answer why is that there are insufficient spares that
have been procured in first instance. We are operating aircraft
in theatres that are more challenging than the assumptions that
were taken. If you certainly take the case of Apache, it is fielded
in theatre many years ahead of that which was planned. Inevitably
you work on the basis that you are going to have an increasing
training and flying burden, and you plan your spares procurement
around that accordingly. In the instance of Apache you ramp that
up, as a result of the conflicts that we are currently in, significantly
above that which was planned.
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