AgustaWestland likes to think of itself as the top helicopter maker in the world. Eurocopter may assemble more aircraft and Sikorsky have a higher market capitalisation, but for AgustaWestland, profits are what matter.

When Finmeccanica's Agusta merged with GKN's Westland Helicopters in July 2000, a major restructuring programme began. "One of the objectives of the joint venture was to reduce costs by a significant amount," says Roberto Garavaglia, vice-president of marketing. By reducing production overlaps, using joint procurement and sharing management costs, the company has cut costs by around 3%, and moving away from 50:50 workshare splits to conventional production decisions should allow more reductions, he says.

The joint venture built on earlier co-operation through EH Industries on the EH101 civil/military utility helicopter, first delivered in 1997 to the UK Royal Navy. Garavaglia says the move from this basis to an integrated company, with common marketing functions and a single product line, has been less fraught than expected, and achieved more rapidly than Eurocopter.

"It is easier to integrate UK and Italian companies than French and German, because the mentalities are complementary, rather than competing," says Garavaglia, citing his own experience with the Franco-Italian ATR, whose aircraft marketing joint venture with British Aerospace - Aero International (Regional) - collapsed in 1998 (Flight International, 22-29 July 1998). "The problem was there was no common product," he recalls.

AgustaWestland hopes that the two decades of joint development of the EH101 have instilled a sense of shared purpose in the engineers. The company also benefits from having no overlapping products, as Westland was largely military and Agusta civil, he adds.

The outlook for sales of civil helicopters is flat over the next 10 years, but the military market is poised for an increase of around $3 billion, or 50%, by 2010. "Most of this will come from the USA, whose share will grow from 30% today to 50%," explains Garavaglia. Italy and the UK benefit from considerable political goodwill in Washington, which helps in military competitions, he adds.

AgustaWestland has formed a partnership with Lockheed Martin on offering the EH101 for US military needs. This follows Agusta's membership of NH Industries in 1992 and the formation of Bell/Agusta Aerospace in 1998 to develop the AB139 medium utility helicopter and the BA609 civil tiltrotor. International tie-ups are the key to success, the company believes.

In multinational programmes, AgustaWestland plans to move towards more rational market-based component manufacturing decisions, split between its facilities in Cascina Costa and Vergiate, both near Milan, and Yeovil in the UK, which should reduce costs and deliver value to shareholders of the world's most profitable helicopter company.

Source: Flight International