Heli-Expo 2011: MD Helicopters Reports Big Contracts Imminent

 - March 7, 2011, 6:40 AM

MD Helicopters (MDH) CEO Lynn Tilton said at Heli-Expo 2011 that the Mesa, Ariz.-based company is on the verge of finalizing several deals that could keep its production line at capacity for the next four years.

The largest potential order is a long-term contract with Boeing to build airframes for the Boeing AH-6i light attack/reconnaissance helicopter for the U. S. Army, a production run that “could be more than 200 aircraft over the next four years,” with initial orders already in hand, Tilton said. MDH will build the entire airframe with the exception of the front nose section and pedestal, and workshare details are being finalized.

Also pending is a contract with a six-nation EMS program in the Middle East to provide 50 to 75 twin-engine MD902 helicopters and support over 10 years. Production of aircraft covered under that contract would begin sometime in June, Tilton said. A contract with the National Guard of Saudi Arabia for MD530Fs is also close to signing, she said, and sales to other foreign military operators are also moving forward.

After several years of “selling one aircraft at a time,” Tilton said, the company is gearing up to meet the anticipated demand. “We’ve been faced with some very major long-term contracts, and in facing that you also have to be able to deliver.”

Tilton, who oversees 74 companies in her Patriarch Partners investment portfolio, said she is taking a more hands-on approach at MDH to ensure it can fulfill the orders. “I have stepped back into the helm and full-time CEO role, four or five days every two weeks to rebuild each and every area of MD.”

Tilton also highlighted recent product innovations the company is showcasing in the aircraft at its display (Booth No. 1618) at Heli-Expo 2011: a new composite blade for the MD500F developed by Van Horn Aviation; the Sagem ICGS display system currently undergoing certification for installation on MD500 series helicopters; the Garmin G500H dual-screen display certified for installation on the MD500E; and LED exterior lighting from Emteq.

“We have a name that people recognize and great products, but what we didn’t do as well is innovate,” said Tilton, who bought MDH in 2005. “We continue to evolve, and I like to think this year we’ve made some headway.”

Tilton said the company’s next innovation will be a glass cockpit for the MD902, and she added that Garmin is among the companies working on the upgrade. MDH will also introduce a new aircraft, the MD540F, a hybrid of the MD530F and the MD600, which will occupy a sweet spot in power and performance between the two models and is expected to have more appeal in the marketplace.

The MD540F will be aimed at the foreign military market and at domestic EMS helicopter operators. “The cabin is perfect [for EMS] and it’s a little more easy to handle” than the MD600, Tilton said. “It’s something we can do in the short term, because they’ll be made from pieces of our [current] aircraft.”

Looking back on the past year, Tilton reported that MDH sold 20 helicopters: one twin-engine MD902 Explorer and the rest single-engine aircraft. The company also continues its in-sourcing production efforts, and in the past year has brought some of the assembly work for the MD902, previously built in Turkey, back to its Mesa plant.

At last year’s Heli-Expo Tilton, combating rumors the company was near shutting down, said it then had $11 million in overdue payments to vendors outstanding. This year overdue payments “are zero,” Tilton said. “We are extremely excited about the future. We keep working on our processes so we can get better and better so we can deliver.”