The US Army has started executing a plan that will lead to a historic reshaping and downsizing of a war-weary aviation branch as it attempts to both upgrade its capabilities and cut more than $12 billion in spending over the next five years.

The aviation restructuring initiative (ARI) unveiled earlier this year is ambitious. Not since the cancellation of the Sikorsky/Boeing RAH-66 Comanche in 2004 has the army proposed as much change for the aviation branch.

ARI proposes to divest all of army aviation’s more than 800 single-engined helicopters. It retires the Bell Helicopter OH-58D Kiowa Warriors, used as armed scouts, with no replacement. A fleet of OH-58A/Cs assigned as advanced trainers also are retired. The TH-67 Creek primary trainer – the military designations for the Bell 206 JetRanger – will be sold as surplus equipment,a plan that has raised concerns from lawmakers over flooding the market with more than 180 cheap trainers.

More controversially, the army is seeking to rebalance active and reserve fleets. It would force the National Guard to transfer Boeing AH-64 Apaches, then receive active army Sikorsky UH-60 Black Hawks in return. The army also would acquire 100 more Airbus Helicopters LUH-72A Lakotas for the National Guard, as it transfers more than 100 already delivered LUH-72As to replace the TH-67s as trainers.

Meanwhile, the OH-58D mission will be absorbed by AH-64D/Es, which will team up with AAI Corp RQ-7B Shadows and General Atomics Aeronautical Systems MQ-9 Gray Eagles to perform the armed scout role. These manned-unmanned teams have already been deployed in operations, says Col John Lindsay, director of army aviation operations and plans.

Speaking at the Federal City chapter of the American Helicopter Society recently, Lindsay defended the plan from critics in Congress and the National Guard.

In Lindsay’s view, the ARI is the best possible solution to a problem caused by sequestration budget policy, which removes $79 billion in planned outlays to the army’s budget over the next five years.

“The money is gone,” he says. “The structure must adapt to the money that is out there.”

Adaptation can take many forms. ARI seeks to reduce spending while protecting the army’s newest and most capable aircraft, he says.

But even Lindsay acknowledges ARI may not be enough. Right now, ARI allows the army to recapitalise its multi-engine fleet while investing in next-generation rotorcraft programmes, such as the joint multi-role technology demonstration (JMR-TD). If Congress does not repeal or reduce sequestration budget cuts in fiscal 2016, the budget cutting must go deeper.

“When I say we have to make some difficult choices we’re going to have to make some really difficult choices,” Lindsay says. “I’m not the decider. I’m just reading the tea leaves.”