AgustaWestland is a key part of Finmeccanica’s globalisation strategy, with strong footholds in the two key markets the company is targeting for growth. Since Finmeccanica finalised its ownership of 100% of the helicopter manufacturer, in a deal with former 50% owner GKN worth over €1.5 billion ($1.82 million), AgustaWestland has seen several successes. The most significant is its win, in January, of the US VXX presidential helicopter contest as part of the Lockheed Martin-led team which also includes Bell Helicopter and General Electric. Financially the contract is useful rather than critical, but in terms of getting into the US market it is “very, very important”, says one London-based analyst.

Finmeccanica chief operating office Giorgio Zappa says helicopters are “a dominant part of the group’s strategy”, and sees the USA as a “shop window” market that will allow the company to demonstrate its products to a wide audience. Such a high-profile success in the USA boosts other Finmeccanica companies’ prospects there too. The company is also competing for the US Army’s Light Utility Helicopter requirements with L-3 and for its combat search and rescue requirements with Lockheed, Zappa says.

Helicopters were not GKN’s core business, but AgustaWestland is feeling the benefit of its complete inclusion within the Finmeccanica fold: “The important message coming from Finmeccanica is that Agusta­Westland is considered a very important component and Finmeccanica is ready to invest, ” the company says. The helicopter manufacturer undoubtedly helps Finmeccanica’s strategy to view the UK as another domestic market. AgustaWestland is the UK’s second largest defence company, employing around 10,000 people. An extensive integration plan is under way the company.

Although parent Finmeccan­ica’s predominantly defence focus has an impact on its subsidiary’s strategy, civil aircraft are also important for AgustaWestland, and its joint programmes with Bell Helicopter provide a foothold in the US market. The company plans to start a US assembly line in Amarillo, Texas for the AB139 this year and says it will eventually deliver 15-20 helicopters a year. And the second prototype of the companies’ BA609 civil tiltrotor is due to fly in Italy by early 2006.

Meanwhile, the European NH90 will keep AgustaWestland busy at its final assembly site in Vergiate, near Milan, where it will assemble 150 of the transport helicopters, delivering the first to the Italian army next year. Production of the EH101 is split between Italy and the UK, partly to keep both governments happy, and partly for competitive advantage, the company says.

AgustaWestland is offering its A129 multi-role combat helicopter to Turkey as well as upgrading 45 of the 60 aircraft it has delivered to the Italian army and negotiating a further upgrade programme. The Italian army has asked AgustaWestland to evaluate the installation of a new observation and targeting systems associated with a new anti-tank missile. The army is also planning to replace its Rolls-Royce Gem 1004 engine with the more-powerful T800 turboshaft made by Honeywell/Rolls-Royce joint venture LHTEC.

AgustaWestland had an order backlog of €5.2 billion at the end of 2004, with new orders worth €1.8 billion and a double-digit profit. In total, it forecasts deliveries of around 120 helicopters in 2005, compared with 92 last year.

While the company recognises the importance of international partnerships, it is careful to safeguard its technological know-how. To this end there has been a shift towards buying-in “roughed-out” components and finishing them in-house.

Customer service and training is also growing. AgustaWestland’s Rotorsim training joint venture with Canada’s CAE is to begin operations next year.

Source: Flight International