After months of speculation, United Technologies Corporation has formally announced its intention to separate from Sikorsky and exit the helicopter business.
Speaking today at Le Bourget, UTC president and chief executive Gregory Hayes said the board has decided to remove Sikorsky from its portfolio so both organisations can focus on their core businesses.
The company’s decision comes after a “review of strategic alternatives for Sikorsky”, and a decision on whether to spin off or sell the US military and commercial helicopter manufacturer is expected in the third quarter with “the process complete by the end of the year,” according to Hayes. “It’s a tough decision, but the right decision for the UTC portfolio.”
Sikorsky has captured about $49 billion-worth of work with the US Department of Defense, thanks in part to its successful H-60 Black Hawk line, and has projected annual revenues of about $10 billion by 2025, says Sikorsky president Robert Leduc. But Leduc warns of “head winds” for the company on the commercial side, with helicopter sales dropping significantly in the oil and gas sector.
Commercial helicopters account for about 30% of the company’s business, and 80% of those commercial sales and the majority of aftermarket services support the “cyclic” oil and gas industry.
“It’s not a Sikorsky event, it’s an industry event,” he says, adding that 80 helicopters will probably be delivered to the sector this year, compared to 122 in 2014.
Despite those concerns, Leduc is buoyed by the company’s strength in the defence sector.
Sikorsky has captured 65% of the US military’s planned spend on rotorcraft, including the US Air Force’s $8 billion combat rescue helicopter programme in 2014. The company’s closest rival – Boeing – has secured 25% of the planned spend, and Bell has 10%.
A number of companies are said to be interested in acquiring Sikorsky since UTC floated the idea earlier this year.
Source: FlightGlobal.com
