Press Release

Contact: Bill Dane, Senior Aerospace Analyst

Phone: (203) 426-0800

Fax: (203) 426-4262

Web site: www.forecast1.com

E-mail: bill.dane@forecast1.com

Forecast International, Inc.

22 Commerce Rd. Newtown, CT  06470 USA

 

FOR IMMEDIATE RELEASE

 

Military Demand Driving Engine Retrofits & Modernization Programs

 

NEWTOWN, Conn. [February 9, 2004] — In a new analysis, The Market for Engine Retrofit & Modernization, 2004–2013, Forecast International is projecting opportunities worth nearly $3.3 billion over the next 10 years, with just under 80 percent of this amount headed toward military projects.

 

The once-booming commercial market was driven by the need to comply with Stage/Chapter 3 noise and emissions guidelines but that deadline has come and gone.  Further, large numbers of hushkit candidate narrowbody models were subjects of accelerated retirement due to the decline in traffic following the events of September 11, 2001. Forecast International's Senior Aviation Analyst Bill Dane notes that "some modest hushkitting of 707 and DC-8 models will continue and a small number of 707s are expected to be re-engined, but all these upgrades will be completed by about 2007."

 

More stringent Stage 4 guidelines will take effect in 2006, but the U.S. FAA has said that the OEMs will be able to comply with the new standards using currently available noise reduction technology and that retrofitting will not be necessary.  A new Stage 4-compliant hushkit has been developed by Jet Engineering and Goodrich for the 300 or so MD-80s operating in Europe, and Forecast International expects some of these operators to install the kits as a rational alternative to paying noise penalty fees enacted at the local level.  Jet Engineering has reported interest from a number of European carriers and from aircraft leasing firm GECAS.

 

The military programs "should begin hitting their stride during the second half" of the 10-year forecast timeframe, according to Dane.  The most lucrative of the programs addressed by the study is the U.S. Air Force's re-engining of 50 Lockheed Martin C-5B heavy-lift transports, a project estimated to cost nearly $2 billion.  An additional $600 million will fund the U.S. Marine Corps re-engining of 100 Bell UH-1s with GE T700 turboshafts, while a modest number of Kaman SH-2s will be upgraded and re-engined to SH-2G standard for overseas air arms. 

 

Military engine upgrade funding could receive a significant boost should the U.S. Air Force obtain money to re-engine its 17 E-8 JSTARS platforms with a JT8D-219 propulsion package on offer from a team of Pratt & Whitney and Seven Q Seven. This refit package could also find applications by about 20 other nations operating 707 military variants.  In another lucrative possibility, USAF and Boeing have come up with a $4-6-billion proposal to re-engine the service's B-52H bomber fleet, with plans calling for a competition between the Rolls-Royce RB211, P&W F117/PW2000, and CFMI CFM56. USAF has neither endorsed the plan nor requested funds for this upgrade.

 

In the coming years, the engine manufacturers and the military may be expected to explore engine leasing programs as a more cost-effective means of acquiring state-of-the-art propulsion systems for some of their larger platforms, particularly those derived from the venerable, four-engined Boeing 707 commercial transport.

 

Forecast International Inc., is a leading provider of Market Intelligence and Analyses in the areas of aerospace, defense, power systems and military electronics.  Based in Newtown, CT, USA, Forecast International specializes in long-range industry forecasts and innovative marketing presentations, including regular 10-year forecasts.  To arrange an interview with Forecast International's analysts, please contact Monty Nebinger (203-426-0800, monty.nebinger@forecast1.com).