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Leonardo has emphasized its historic UK ties to secure the UK Defense Ministry helicopter order.
When the UK launched a high-profile helicopter modernization effort more than two years ago, it expected as many as five bidders to battle for the contract. The Defense Ministry has ended up with one.
Airbus and Lockheed Martin have pulled the plug on their efforts to supply the UK with a new fleet of medium rotorcraft, leaving Leonardo as the sole bidder. Airbus says that after reviewing the invitation to negotiate issued in February to three companies, it concluded that it was “unable to formulate a responsible bid that would in parallel satisfy the customer’s requirements and provide adequate long-term returns to the business while implying a reasonable prospect of winning.”
- Leonardo might win the contract by default
- A reduced requirement for the helicopters challenged the production economics
Lockheed “elected not to submit a response to the New Medium Helicopter [invitation to negotiate] as we could not meet its minimum requirements in today’s market conditions,” the company’s UK subsidiary stated.
When asked for final bids, the UK said the program would be worth about £1.2 billion ($1.6 billion). Airbus and Lockheed dropped out at the proposal deadline of Aug. 30. Leonardo says it submitted a proposal matching the UK’s needs in terms of platforms, timeline and budget.
This development comes as the latest twist in the UK’s effort to replace the Royal Air Force’s Airbus H215 Puma and AS365 Dauphin fleets and reduce the number of helicopter types it operates. The modernization program also once served to take the place of Bell 212 and 412 rotorcraft. The UK had phased those out and replaced them in the interim with Pumas. The country last year ordered six Airbus H145s, a type it was already using for training.
When the effort to launch the modernization program began, the UK said it was looking to buy up to 44 helicopters. Lawmakers later disclosed that the number had shrunk to “circa 30.” The scope of the program still remains in doubt because of the wide-reaching defense review that the new Labour government kicked off in July, results of which are not expected until next year.
Moreover, the helicopter program’s schedule has shifted. The UK had once hoped to field the new rotorcraft by January 2025. Now even the bid evaluation and contract talks are not expected to be concluded by then.
Airbus, effectively the incumbent, was looking to offer the H175M helicopter. Leonardo has promoted the AW149 while Lockheed’s Sikorsky was in the race with the S-70M Black Hawk.
Over time, the competition became a political game about how best to promise local production in order to address UK Defense and Security Industrial Strategy demands. Airbus had proposed H175M final assembly at its site in Broughton, Wales, while Lockheed Martin had eyed Gosport, England, for the S-70M. However, the medium helicopter project’s reduced scale complicated the business case for UK assembly.
Leonardo said it would produce the A149, capable of carrying 16 fully equipped troops, at its existing facility in Yeovil, England. The fate of the UK’s historic helicopter production site—which belonged to Westland before that business was acquired by the Italian company that is now Leonardo—has long been a politically charged issue in the country. Leonardo promised to build helicopters for export at Yeovil; Airbus considered a similar commitment as part of its bid. The UK made considerations such as export potential a key plank of the program to underpin its defense industrial ambitions.
“We believe that the outcome of this procurement as it stands would not be able to deliver on current defense industrial strategy objectives, particularly its ambition for long-term new jobs, opportunities for the UK supply chain and sovereign capability,” Airbus said in an Aug. 30 statement.
Leonardo played up its existing roots. “Because we have an established UK onshore helicopter design and manufacturing capability and a related domestic supply chain, we have been able to meet the [Defense Ministry’s] requirements,” Leonardo Helicopters UK Managing Director Adam Clarke stated.
Airbus and Lockheed said they were looking to work with the UK Defense Ministry on future efforts.
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