Lockheed Martin And United Technologies Corporation Are In The Race For $8B Indian Navy Helicopter Tender

Includes: BA, LMT, UTX
by: Confero


The Indian Navy wants to buy more than 120 helicopters worth $8B.

Lockheed Martin and United Technologies Corporation stand a good chance getting this order with the MH-60R.

Problems might be in requirements for local assembly and possibly technology transfer.

The Indian Navy is planning to buy 120+ multi-role helicopters in a tender worth $8B. The Navy already asked helicopter manufacturers for details. Lockheed-Martin (NYSE:LMT) and United Technologies Corporation (NYSE:UTX) stand a good chance with the MH-60R Seahawk. Conditions required in the deal are possibly technology transfer and probably local assembly or co-manufacturing.

In this decade, the Indian armed forces are going to acquire more than 1000 new helicopters to replace aging helicopters in their inventories. India wants to rely less on Russian equipment, which offers opportunities for aerospace manufacturers from the US and Europe.

This huge renewal operation is one of the largest in this decade. Boeing (NYSE:BA) is in the final stages of selling India H-47 Chinook and AH64 Apache helicopters as part of this renewal process.

The Indian Navy requires a anti-submarine warfare, anti-surface warfare and special forces operations capable multi-role helicopter. The Lockheed-Sikorsky - as Lockheed calls it - MH-60R Seahawk is the likely candidate that will be offered, considering the requirements. Sikorsky is the helicopter division of United Technologies Corporation.

Although the MH-60R is based on the Sikorsky Black Hawk helicopter, the Lockheed Martin Common Cockpit (which is a glass cockpit) is used.


  • Airbus Helicopters (OTCPK:EADSF) will offer the EC725
  • NHIndustries will possibly offer the NH90 helicopter. Airbus Helicopters owns 62.5% of NHIndustries and Finmeccanica (OTCPK:FINMF) 32%
  • AugustaWestland, which is 100% owned by Finmeccanica, will probably offer the AW101

It is possible that AgustaWestland will be excluded (or not get the contract) because there is a corruption scandal with selling AW101 VIP helicopters to India.

This month Airbus formed a new subsidiary to integrate all Indian activities and Hindustan Aeronautics Limited [HAL], India's major aerospace manufacturer, already cooperates in developing and building the A320neo, A350XWB and A380.


There are 2 important reasons why the combined Lockheed Martin/Sikorsky proposal will not get the order:

  1. Technology transfer. At this moment, it is not known which technology will be offered. When some technology can not be exported and other - less advanced - technology is used, this could lead to a failure to get the contract;
  2. Considering the size of the order local participation (and probably assembly) of Hindustan Aeronautics Limited [HAL], HAL is India's major aerospace manufacturer.

Both will be important considering India's wish to grow its own aerospace industry. Choosing the Dassault Aviation Rafale as the India's new fighter aircraft depended for a large part on sharing production with HAL. This is detailed in Dassault Aviation: Purveyor Of France.

The Indian defense market is an important market, and India has the 8th largest defense budget in the world. India cannot afford to cut defense spending considering the regular problems (and wars) with Pakistan and China.

Both Lockheed Martin and UTX should be able to benefit from India's policy of decreasing its dependence on Russian equipment, which is becoming obsolete now.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

About this article:

Author payment: $35 + $0.01/page view. Authors of PRO articles receive a minimum guaranteed payment of $150-500.
Want to share your opinion on this article? Add a comment.
Disagree with this article? .
To report a factual error in this article, click here