OPINION: Sales are not the only metric of success

20 January, 2017 SOURCE: Flight International BY: Flight International

As Leonardo chief executive Mauro Moretti notes, the bulk of the company’s core defence and helicopter activities are concentrated in its “twin-pillar” domestic markets of Italy and the UK.

Compare and contrast, then, the recent moves by the two countries’ governments to shore up those pillars.

On one hand, Rome has awarded the company a €487 million ($515 million) contract to develop a new attack helicopter for its army. The initial deal is for the delivery of just four helicopters, from an eventual 48.

Meanwhile, the two most recent orders for rotary-wing aircraft from London – for training and attack missions, respectively – went to Leonardo’s rivals, Airbus Helicopters and Boeing.

The most recent contract awarded to Leonardo’s UK helicopter business (the former AgustaWestland) was a five-year maintenance arrangement worth £271 million ($330 million), covering the AW159 Wildcats flown by the British Army and Royal Navy.

Of course, sustainment work is a nice little earner for manufacturers and, assuming a constant value, the contract could be worth a total of £1.5 billion over 30 years. However, with Wildcat assembly now winding down, there are serious questions about what Leonardo’s Yeovil plant in Somerset will look like in five years.

Although it says it supports manufacturing at the site, the UK government has to decide in what form and by how much it wishes to underwrite that.

They seem so much better at it on the continent, particularly in Italy, where the government is an enthusiastic customer of its own aerospace industry.

That said, the world does not need another attack helicopter type. Leonardo’s most recent stab at the segment – the AW129 Mangusta – failed to register a single international order. Except, that is, for the sale of the entire programme to Turkish Aerospace Industries, where it morphed into the more capable T129 Atak.

It is a crowded market, with Airbus Helicopters, Bell Helicopter, Boeing and Russian Helicopters already producing highly capable aircraft. China and India, too, are developing their own platforms.

To be a commercial success, Leonardo’s new model must win export orders. However, supporting a strategic industry appears to be Italy’s real goal.