South Korea's next big national aerospace project - the Korean Multi-role Helicopter (KMH) - is capturing the attention of local companies and the world's top helicopter manufacturers.
After years of delay, the government has launched the highly anticipated KMH programme by tentatively committing to begin development next year of an indigenous helicopter and to buy around 500 of the new machines in the next decade. The project promises to be a multi-billion dollar windfall for the country's ailing aerospace industry and for one foreign manufacturer, to be chosen after an intense competition to be held over the next eight months.
The size and scope of the project is still being defined and its ultimate success hinges on whether the government will follow through with its promise to provide at least $13 billion in financial support. South Korea's aerospace industry also must build rotary-wing technologies rapidly to successfully develop utility and attack variants by 2010 and 2012, respectively. It is also expected to export at least 500 aircraft.
"They are convinced they can develop a rotary-wing aerospace industry using KMH and at the same time meet the Republic of Korea Army's mission and spring on to the stage as a major export nation," says an industry official. "But building automobiles isn't like building aeroplanes."
AgustaWestland, Bell, Boeing, Eurocopter and Sikorsky plan to bid on the project. The manufacturers were visited by a Korean team early this year and will attend a project briefing to be held shortly. A tender should be released by year-end, with contractor selection expected by mid-2004.
Whoever wins will be in South Korea forever," predicts an industry official.
Partnership arrangementsSouth Korea has not yet defined a role for the foreign partner and the tender is likely to leave room for manufacturers to propose slightly different partnership arrangements and for future programme revisions. The manufacturers expect the government will seek to import technology and marketing capabilities, but keep as much development and manufacturing in South Korea as possible. The country says it aims to import only 28% of the KMH.
Licensed production will only be considered if the programme is later downsized. Manufacturers do not expect to receive licensing fees. Instead they expect a share of all sales in exchange for providing technology, giving up export sales territory and making an equity investment.
In many ways, the project will follow the model of the Korea Aerospace Industries (KAI)/Lockheed Martin T-50 advanced trainer. South Korea is developing roughly half of the T-50 and the government is banking on export sales to help recoup its investment. KAI also expects to be appointed KMH prime contractor and says it is discussing this with the Ministry of National Defence (MND).
"Because South Korea has designated us the sole manufacturer of aircraft, we think that's the way to go [on KMH]," KAI says. "But it is not yet formally resolved."
The MND plans to select prime and local subcontractors by year-end. The Agency for Defence Development (ADD) and Korean Aerospace Research Institute (KARI) expect to play significant roles in helping KAI with development.
Samsung Techwin is the prime candidate to develop and manufacture the powerplant. Korean conglomerate LG could supply the avionics, while several other local manufacturers with limited or no aerospace businesses also seek to supply small parts.
KAI and Korean Air (KAL) Aerospace stand to get all the major manufacturing work because they are the only indigenous companies able to assemble helicopters and build large aircraft components. KAL plans to complete a merger with KAI by year-end that would give it control of KAI.
Helicopter experienceKAL Aerospace and KAI each have plants with helicopter experience. KAL Aerospace's Busan factory has licence-built more than 100 Sikorsky UH-60P Black Hawks. KAI's Sacheon plant builds Bell SB427s and its Changwon plant produces Boeing AH-64 Apache fuselages and tail booms.
AgustaWestland and Eurocopter have had comparatively weak market presences in Korea recently after their sales last decade of Lynxs and licence-built BO105s, respectively. They are considered long shots because Seoul typically buys from the USA.
Sikorsky believes the KAL/KAI merger will give it an edge in the competition because of its strong ties with KAL. But if the merger is not completed, KAL will not be able to pursue a prime role in the project and its Busan plant would be limited to a subcontract role.
Over the past few years KAL and Sikorsky have been lobbying the government to strip KAI of its designation as the exclusive military aircraft manufacturer. But KAL says this effort has been unsuccessful and taking over KAI is the only way it can get a significant piece of the KMH.
Bell and Boeing, however, believe the KAL/KAI link will not affect the KMH and the government will reward them for their long-standing relationship with KAI
"We are not concerned with the KAL/KAI deal," says an official with one manufacturer. "They won't do something against the wishes of the customer, which is the army."
Bell is also offering KAI almost 100% workshare in a proposed upgraded variant of the 427. This could give KAI's Sacheon plant extra capabilities over the next three years that could help prepare it for the KMH.
Earlier this year Boeing gave KAI Apache work in the hope it would get a leg-up on the KMH and in South Korea's proposed AH-X heavy attack helicopter programme. The Apache is considered the favourite for AH-X, but the programme's future is questionable.
The proposed size of the KMH has steadily increased over the last several years - from about 3,600kg (8,000lb) to at least 5,900kg and possibly up to 8,200kg - throwing into question whether a separate heavy attack helicopter is needed. But some manufacturers believe South Korea may ultimately be forced to pull the plug on the attack variant.
Boeing believes the country's strategy of developing a common attack and utility helicopter will prove to be unfeasible. Bell is trying to persuade Seoul to first develop an attack helicopter and then a utility machine, similar to the approach it is using for the new AH-1Z and UH-1Y.
All the manufacturers agree that defining the KMH is the MND's main focus, so an AH-X decision has been put on the backburner until at least the end of 2004. Some do not expect an AH-X decision until 2006, when the KMH will be far enough into development for programme officials to assess whether an attack variant is feasible, and there will still be time to import an AH-X to meet a 2009 deployment requirement.
AH-X would give the nation a new capability, while its plan to buy 178 KMH attack variants is aimed at replacing Bell AH-1 Cobras, some of which are 25 years old. Bell and Longbow International are pitching Cobra upgrades, but South Korea wants to finalise plans for the proposed KMH attack variant before deciding on the Cobras.
Proposals to upgrade the nation's ageing fleet of Bell UH-1H Hueys have similarly been put on hold until the KMH programme becomes more defined.For several years Bell has been pitching a Huey 2 upgrade package to extend the lives of Korean UH-1Hs, some of which are now 40 years old. But the army has repeatedly held off on purchasing the upgrade.
Huey spare partsThe KMH programme office has been tasked with evaluating South Korea's fleet of Hueys and KAL licence-built MD500s to determine if they can last until the KMH enters service. The country recently signed a $48 million, seven-year contract for Huey parts, indicating it hopes to keep its ageing utility fleet airborne until the first KMH arrives in 2010. But most industry observers expect it will take longer than expected to develop KMH, which could force South Korea to either acquire Huey upgrades or buy additional Black Hawks.
Sikorsky believes South Korea does not want to invest in Huey upgrades and will instead buy around 40 extra Black Hawks. But such a purchase would reduce the requirement for the KMH and make it harder for South Korea to recoup its investment. The KMH office is evaluating whether the 299 utility variants as planned are too many because they will be larger and more reliable than UH-1s and MD500s being replaced
The MND's new 85-man KMH office is also evaluating whether the air force, navy or marines could acquire the KMH to offset a potential reduction in the army purchase. A proposed civilian variant may also be sold to the Korean police.
South Korea's goal of 500 exports is even more questionable, say international manufacturers. Some believe this target could only be met with a joint Korean-UK programme, which has been loosely considered for several years because the UK has a similar requirement for about 500 helicopters.
Adding to the uncertainty is the budget. So far only $8.4 million is committed to the programme. These funds will go towards planning as the KMH office tries to define the programme over the next year. Final governmental approval, a long-term budget and a contract award will not come until next October.
"I guarantee the KMH programme will be changed over the next year - the size, the time timing and the required operational capability," says one official. "It's a loosely defined, vague programme," says another.
Source: Flight International
