Industry Perspective: Sikorsky
Sikorsky’s growth in the last four years has been astronomical. Since 2003 the company has doubled its revenue to almost $5 billion thanks to a succession of orders that have come pouring in from military and civil buyers. The latest deal, announced in December, was for 537 Black Hawks for the Army and Navy. These helicopters will be delivered over the next five years as part of a contract worth $7.4 billion.
The civil market remains red hot as well, forcing Sikorsky to move S-76 production to subsidiary Keystone in Pennsylvania. Given the current situation, the term “cyclical downturn” does not seem as though it could enter the lexicon at the Stratford, Conn. manufacturer. Not surprisingly, Sikorsky vice president of commercial programs Marc Poland was exuberant when he sat down with HAI Convention News.
At last June’s Paris Air Show Sikorsky provided some impressive sales and revenue numbers. How did the company fare through the remainder of the year?
Last year ended up being our strongest ever. We take some pride in the fact that in 2003 when our revenues were $2.3 billion we set the target of doubling the company by 2008. Our actual 2007 revenue figure was $4.8 billion, so we’ve more than doubled in four years. I don’t know about you, but I would consider that a pretty impressive growth rate, particularly for a company that has been around for several decades.
What are the factors that have driven growth and allowed you to meet the goal?
It’s kind of been the perfect storm for us in terms of market demand. Military demand is at a high point–perhaps not an all-time high, but certainly a surge as we support our U.S. government customers’ operations around the world–but at the same time we have a commercial market that’s raging, with demand coming from oil exploration and a strong economy that has driven corporate buying to pretty high levels as well. All of that has happened right on top of each other, giving us the results that we had last year.
Given the uncertainty in the economy this year, what are you predicting short term and also for a longer-range view?
The key to understanding this year’s confidence and optimism can be summed up in one word: backlog. The business book that we’ve got for this year was established almost completely before the year began. We’re executing contracts now that fill the overwhelming majority of this year’s capacity for deliveries. In fact, the backlog goes well beyond this year, and on most of our products we’re in the vicinity of a two-plus-year order book.
The next product to reach the market will be the S-76D. Can you provide an update on that program?
We ended last year with the critical design review, which is a milestone that has linguistic significance in the military world and typically not so much in the commercial world, but as a company we follow the same processes for design reviews on both sides. It’s a very structured and comprehensive review of the plans for projects, and it’s based on that review that I can say the project is on schedule and will proceed on schedule.
As we reviewed the attributes of the aircraft–payload, range capability, price points, fuel efficiency and so forth–all of those attributes are consistent with the goals that were set with the design team at the outset. As far as milestones, this year will be the first flight of the all-composite main rotor blades. We’ll be doing that late this spring or early this summer on an S-76C+, and then later this year another set of those same blades will fly on the first conforming S-76D, along with all the other technology we are building into the design.
What progress have you made on the X2 design?
We have the aircraft here on the show floor, and it’s a beautiful, small aircraft that’s ready to fly. Unfortunately, the show comes at a point that interrupts what would have been the time when we would have flown the X2 for the first time. If it wasn’t for the show we would probably start flying it right about now. As things stand, we’ve backed off that timetable somewhat so that we could have the aircraft here, but we expect to fly it very shortly after the show.
What do you hope to gain from flight tests of the X2 demonstrator?
You’re correct to call it a demonstrator, but as you’ll see it’s a relatively mature demonstrator in the sense that it’s robustly built. That’s not because that exact design would ever go into production, but it’s also not an aircraft that we intend to fly for 50 or 100 hours and then park in the barn. It really is proving out and maturing the technologies that will allow X2 to become a commercially viable project.
We’ve flown counter-rotating main rotor designs in our history, but the world of technology has advanced radically since that time. The composite technology has changed drastically, and fly-by-wire has certainly become a reality in a way that it wasn’t before. Those two technologies are going to be advanced by this demonstrator, and from that point forward it’s a matter of determining the market receptiveness for the value of speed and tradeoffs that inevitably come with the X2 design approach, both in the context of commercial and military applications and in finding the sweet spot where those two may overlap. Then we will pursue the application of the technology.