MILITARY HELICOPTER EXPORTS: A GROWING SECURITY ISSUE

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• Document Creation Date: March 9, 2023
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• Publication Date: July 1, 1985

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Directorate of
Intelligence
Military Helicopter Exports:
A Growing Security Issue
An Intelligence Assessment
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GI 85-10193
July 1985
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Directorate of
Intelligence
Military Helicopter Exports:
A Growing Security Issue
An Intelligence Assessment
This paper was prepared by
Office of Global Issues. Comments
and queries are welcome and may be directed to
the Chief, International Security Issues Division,
OGI,
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GI 85-101
July 1985
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�Tern+,
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Key Judgments
Information available
as of 28 June 1985
was used in this report.
Military Helicopter Exports:
A Growing Security Issue
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Helicopters make up the only sector of the military export market likely to
experience continued strong demand over the next 10 years, when 7,100
military helicopters will be sold. The military capabilities of several Third
World countries will improve as their helicopter inventories grow. Exports
of ground attack helicopters�which can be used for missions ranging from
antiarmor to anti-insurgency� will lead the way as many of the 30 current
users expand their fleets and at least 22 more create ground attack
helicopter units. The major customers for military helicopters through the
mid-1990s will include Saudi Arabia, Iraq, Iran, South Korea, China, East
and West Germany, Czechoslovakia, and Turkey.
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Expansion of helicopter assets may prompt some recipients to be more
assertive in military operations as a result of their improved ability to
sustain logistic supply lines for both conventional and anti-insurgent
warfare. The rapid deployment of troops and equipment in Third World
countries, such as Jordan, Peru, Pakistan, Thailand, and North and South
Korea, is hindered by poor road networks and mountainous terrain. These
problems can be overcome by greater reliance on helicopters for transport
functions. Specific areas of improvement include:
� Antiarmor. The proliferation of ground attack helicopters could enable
several of the new operators to duplicate Syrian and Israeli antiarmor
successes in the 1982 Lebanon conflict.
� Counterinsurgency. Several Latin American and East Asian countries
are planning to enlarge their helicopter inventories to combat growing
insurgent movements. (b)(3)
The continuing strong demand for military helicopters is likely to benefit
West European suppliers most. Preferential financing and a wide variety of
light and medium transport helicopters and attack helicopters tailored to
Third World needs will give West European manufacturers a competitive
edge in the market. Soviet exports may decrease somewhat as some
traditional customers, such as Iraq and Syria, turn to West European
suppliers to meet their growing demand for agile ground attack helicopters.
We expect US manufacturers to remain behind the Soviet Union and
France in total aircraft delivered; only those few customers willing and able
to pay premium prices for advanced technology helicopters are likely to
turn to US suppliers. Licensed producers of helicopters in the Third World
and Eastern Europe, such as Brazil, India, and Romania, are likely to take
a more active role in meeting the continued strong demand for military
helicopters.
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GI 85-10193
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Contents
Page
Page
Key Judgments
iii
Introduction
1
The Past Decade-1975-84
1
Recipients
2
Suppliers
2
Continued Strong Demand-1985-94 3
Continued Inventory Expansion 3
The Need To Replenish Inventories 3
New Roles 4
Areas of Growth 5
Attack Helicopters 5
Counterinsurgency 7
Heavy-Lift and Naval Helicopters 8
Outlook for Suppliers 8
Western Europe 8
Soviet Union and Poland 10
Emerging Suppliers 12
Implications for the United States 12
Appendixes
A.
Military Helicopter Exports, 1975-84 15
B. Projected Military Helicopter Deliveries Through 1995, by Region 25
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Military Helicopters: Structure of the Market
The vast majority of military helicopters exported
internationally are newly produced aircraft. Used or
refurbished aircraft account for only about 4 percent
of sales because:
� Most developed and Third World militaries estab-
lished large helicopter fleets in the late 1960s
through the 1970s and continue to use these air-
craft. Until now there have been few retiring aircraft
available for subsequent retransfer.
� New helicopters are generally less expensive to
operate than older models, which require more
extensive follow-on support and maintenance.
Producers
Only the United States and the Soviet Union produce
the entire range of light-, medium-, and heavy-lift
helicopters and specialized variants of these aircraft
for attack and other purposes. The Soviet Mil Design
Bureau has designed the MI series of medium- and
heavy-lift helicopters, and the Kamov Bureau designs
the Ka-25, -26, and -32 light and medium helicopters.
There are four major producers in the United
States�Hughes Aircraft, Boeing Vertol, Sikorsky,
and Bell. Bell and Hughes are known for their light
and medium models; Sikorsky and Boeing have
specialized in medium and heavy rotorcraft. Industry
observers believe that US helicopters are superior to
Soviet models on the basis of the many technological
breakthroughs in helicopter design and use�such as
the tilt-rotor and mine countermeasure helicopter�
that US manufacturers have instituted.
West European firms produce only light- and medi-
um-lift helicopters. The high cost and small interna-
tional market for heavy-lift helicopters have kept
European firms from producing helicopters of more
than 35,000 lbs. maximum takeoff weight. France's
Aerospatiale is the most prolific European producer,
offering seven basic models on the international
market. Italy and Great Britain have only recently
begun domestic design and production of military
helicopters, having relied in the past on manufactur-
ing US aircraft under license or on coproduction with
other European partners. Italy's Agusta has indigen-
eously developed the A-109 general purpose and
A-129 antitank helicopters, and Westland in the
United Kingdom has developed the Lynx-3 antitank
and Westland 30 light-utility aircraft. West
Germany's Messerschmitt-Bolkow-Blohm manufac-
tures one basic aircraft the B0-105�and plans to
develop the PAH-2 HAC attack helicopter with Aer-
ospatiale.
The Importance of the Export Market
The export market is of particular importance to
West European helicopter manufacturers. Collective-
ly, West European firms export 65 percent of their
military production. France exports 76 percent of its
production; Italy, 70 percent; West Germany, 57
percent; and the United Kingdom, 30 percent. Exports
create economies of scale, making helicopters more
affordable for domestic services. In addition, export
revenues help fund research and development pro-
grams that have made European helicopters more
competitive with US and Soviet aircraft. By contrast,
manufacturers in the United States and the Soviet
Union rely on sales to domestic armed forces to
sustain national industries. The United States and
the USSR exported some 15 and 20 percent of their
military production, respectively, over the past de-
cade.
Because of the need for extensive follow-on support
for helicopters, exports of spare parts and follow-on
equipment provide the most revenue for helicopter
manufacturers. The inherent vibrations and large
number of moving parts in a helicopter create a high
demand for replacement parts, especially gears, en-
gines, and electronics equipment.
the spare parts market for helicopters is
more lucrative than for other aircraft and that,
within five years after delivery, an operator spends an
amount equal to the initial purchase price on spare
and repair parts.
upport for the 20-year operational life of a
military helicopter costs four to six times the original
cost. Consequently, we believe that the revenues
helicopter manufacturers earn far exceed the
$15 billion spent on initial purchase since 1974.
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"--Steget
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Military Helicopter Exports:
A Growing Security Issue
Introduction
During the next 10 years, exports of military helicop-
ters will remain strong in spite of declining global
demand for other major weapon systems.' This assess-
ment examines the factors that support this outlook;
estimates the impact on suppliers and on military
capabilities, especially in the Third World; covers all
exporters; and includes purchases by the Third World,
Western Europe, and the Warsaw Pact.
The Past Decade-1975-84
Exports of military helicopters have grown tremen-
dously during the past 10 years; foreign sales totaled
nearly 7,000 aircraft valued at approximately $15
billion. Global inventories expanded by 62 percent to
some 11,000 helicopters (figure 1), including a dou-
bling of helicopters in the Third World. The growth of
national inventories is attributable to:
� The recognized ability of helicopters to perform a
variety of combat missions, including troop and
equipment transport, observation, evacuation, anti-
submarine warfare (ASW), and battlefield fire
support.
� Regional tensions in South Asia, the Middle East,
and on the Korean Peninsula. Pakistan and India,
the frontline states of the Arab-Israeli conflict, and
the two Koreas collectively bought 2,243 helicopters
over the decade, accounting for half of Third World
purchases and one-third of all international sales.
1
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Type of Helicopters
In this assessment, helicopters are categorized into
three basic weight-lift classes:
� Light. Up to 10,000 lbs. maximum takeoff weight.
� Medium. Up to 35,000 lbs. maximum takeoff
weight.
� Heav Above 35,000 lbs. maximum takeoff weight.
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Most helicopters perform traditional observation,
evacuation, and troop and equipment transport du-
ties, but several models have been configured for
specialized missions as their combat role has been
redefined and expanded. These include:
� Ground attack. Light- or medium-lift helicopters
equipped with machineguns, grenade launchers,
rockets, antitank guided missiles (ATGMs), and
more recently�air-to-air missiles.
� Assault. Armed medium-lift helicopters that can
carry five to 20 troops into combat.
� Naval attack. Light- or medium-lift helicopters
fitted with search radars and sea-skimming mis-
siles�such as the Exocet AM39 or Sea Skua
that can detect and destroy enemy warships or
resupply vessels.
� Antisubmarine warfare. Light- or medium-lift heli-
copters carrying sonars and guided air-launched
torpedoes capable of identifying and destroying
submerged submarines.
� Mine countermeasures. Heavy-lift helicopters with
towed magnetic mine-detection equipment.
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.-S'encgt
Figure 1
Global Military Helicopter Inventory
Growth, 1975-84'
197
MI 1984
Suh-Saharan
Africa
atin America/
aribbean
Asia-Pacific
Middle East/
North Africa
rd Vorld
\kesiern
4urope
:isle m
111�000
Thousand helicopters
-111
I .111,1 SO CI 111,211E 1M,
306971 685
12
Helicopters configured for specific attack or electron-
ic countermeasure missions have become important
export items. Thirty countries bought 922 ground
attack helicopters, accounting for 13 percent of total
export sales. Moreover, 244 ASW, naval attack, mine
and electronic countermeasures helicopters were sold
to 22 countries, many of them Third World nations,
adding these unique capabilities to their armed forces
for the first time. For example:
� Iran received nine RH-53 mine countermeasures
helicopters from the United States.
� Libya purchased 27 MI-14 ASW helicopters from
the Soviet Union.
� Syria received 18 MI-14s and four MI-8s from the
USSR for ASW and electronic countermeasures
missions.
� Nicaragua received 12 M1-25s in late 1984 that
significantly enhanced the Sandinista's counterin-
surgency capability and bolstered any effort it
might make to operate beyond its borders.
Recipients
Middle Eastern and North African countries bought
the most helicopters over the past decade (figure 2).
Large purchases by a few countries typified purchas-
ing patterns. Syria, Iran, and Iraq, for example,
imported 350, 480, and 400 aircraft, respectively,
replacing war losses and greatly expanding inven-
tories. Warsaw Pact nations also represented a sizable
export market for military helicopters. East Asian,
Pacific, and South Asian countries collectively were
the next largest regional market, accounting for 18
percent of exports. Latin America where Peru con-
tinued to import Soviet equipment and Nicaragua
expanded its medium-lift inventory in addition to the
squadron of Hind gunships�was the fourth-largest
market. Inventory expansion by countries on NATO's
"southern flank" made Western Europe the fifth-
largest regional market. Finally, inventory expansion
in Africa where Angola was the largest recipient of
Soviet helicopters rounded out the market.
Suppliers
The Soviet Union and France were the leading ex-
porters of military helicopters during the last 10 years
(table I and figure 3). The Soviets exported 1,940
aircraft, primarily to the Middle East and to close
allies in Eastern Europe and Southeast Asia. France's
Aerospatiale was a significant exporter, selling more
than 1,620 helicopters to 57 countries. No single
region dominated French sales; exports were balanced
between Middle Eastern, Asian, and East European
countries. Manufacturers in the United States deliv-
ered 1,334 aircraft, relying on sales to customers in
2
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ret
Figure 2
Recipients of Exported Military
Helicopters, 1975-84
Percent
Total - 7,040
Africa 7.0
Southeast Asia
7.2
South Asia 8.2
Western
Li rope 8.2
Latin America 9.0
Fast Asia 9.0
PaLille 0.5
Middle Fast/
North Africa
USSR and Eastern
Europe
306972 6-85
Warsaw Pact Military Helicopter Procurement
Deliveries of military helicopters within the Warsaw
Pact amounted to more than 1,200 helicopters over
the past 10 years-17 percent of global transfers.
Most of this trade consisted of Soviet purchases of
945 MI-2s from Poland, where they have been pro-
duced under license since the 1950s. The Soviet
Union delivered 254 helicopters to other Warsaw
Pact allies; East Germany received almost half of
these. The Warsaw Pact was not a totally closed
market; Romania purchased and produced more than
200 Alouettes and Pumas under French license.
Asia, the Middle East, and Western Europe. Poland
was the fourth-largest supplier, providing helicopters
to Libya and North Korea, in addition to the Soviet
Union. Italy, West Germany, and Great Britain to-
gether accounted for 12 percent of export deliveries.
Continued Strong Demand-1985-94
We estimate that exports of military helicopters will
remain strong, as some 7,100' helicopters will be
exported through the mid-1990s. Many of these ex-
ports in Western Europe will be replacement aircraft,
thereby slowing the rate of global inventory growth.
We do not believe that the economic problems facing
many LDCs will drastically diminish helicopter ex-
ports. Attache reports indicate that several LDCs are
committed to expanding and modernizing their heli-
copter fleets and have already approved funding for
these programs. Furthermore, the initial cost of heli-
copters is not as high as that for other major equip-
ment such as jet fighters and warships. Several factors
will contribute to continued strong exports of military
helicopters over the next 10 years
Continued Inventory Expansion
Many Third World armed forces do not have full
helicopter fleets and plan to make significant helicop-
ter purchases by the mid-1990s.
hich will more than triple their helicopter
force. South Korea plans to add more than 95 attack,
observation, and medium transport helicopters to its
inventory of 254 purchased since 1974. Jordan and
Ecuador also recently agreed to large purchases of
French Pumas, Ecureuils, and Gazelles that will
increase their respective inventories by 200 and 50
percent.
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The Need To Replenish Inventories
Most West and East European militaries established
large helicopter forces in the 1960s and must now
replace their aging aircraft.' West Germany, for
' Most countries replacing old helicopters will scran them in lieu of
upgrading them for possible reexport
the extensive vibrations that airframes experience over their service
life make upgrading costly.
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example, must replace most of its 300 aging UH-1
medium- and CH-53 heavy-lift helicopters. Spain,
Canada, Belgium, East Germany, and Czechoslovakia
represent other large European replacement markets,
totaling nearly 600 aircraft. In the Third World,
China has begun replacing nearly 300 MI-4s pur-
chased from the Soviets in the 1960s and early 1970s
with small purchases of US S-70Cs and French
Pumas. Elsewhere, Thailand must replace about 90
utility helicopters, and South Africa will be in the
market for 80 light-lift, 45 medium-lift, and 10 ASW
(b)(3) helicopters by the early 1990s.
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New Roles
Export sales are likely to grow somewhat as helicop-
ters fill roles previously reserved for fixed-wing air-
craft or armored vehicles.
for instance, some
Swiss defense planners have suggested replacing ag-
ing Hawker Hunter jet fighters with attack helicop-
ters in light of increasing doubts about the survivabil-
ity of fixed-wing ground attack aircraft on the
European battlefield. Other attache reports indicate
that some Third World countries are considering
attack and transport helicopters to fill roles now
assigned to armored forces. The widespread substitu-
tion of helicopters for other weapon systems, however,
will be tempered by the entrenched preferences of air
and ground forces commanders for traditional fixed-
win aircraft, tanks, and armored personnel carriers.
�
4
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Figure 3
Exporters of Military Helicopters,
1975-84
Percent
Total -7,040
United Kingdom 1.5
West Germany 4.0
Italy 6.6
Poland
United States
Others 2.5
USSR
Frank. C
.A.A4/1 0-5D
Areas of Growth
The continued strong demand for ground attack
helicopters will play an important role in shaping
future exports of all helicopters. Over the next decade,
ground attack helicopters will account for approxi-
mately the same percentage of total sales as the past
decade�around 13 percent�but new helicopter and
weapon systems technologies will make these aircraft
more capable than earlier models
several Third World
militaries intend to procure transport and observation
helicopters, in addition to ground attack models, to
help combat internal threats. Finally, we expect sever-
al developed and Third World militaries that current-
ly field relatively large helicopter fleets�between 150
and 250 aircraft�to improve troop and equipment
transport and shoreline defense with the purchase of
heavy-lift and naval warfare helicopters.
Attack Helicopters
We estimate that exports of ground attack helicopters
will drive the continued strong demand for military
5
The Soviet MI-8 Hip was the most widely
exported helicopter over the past 10 years More
than 1,170 were sold to 35 countries.
(b)(3)
helicopters.' Exports will approach 900 aircraft, as
many of the 30 current operators expand their inven-
tories and at least 22 more countries create antitank
helicopter units. Most new buyers will be attracted by
the heavy firepower and maneuverability of attack
helicopters. Major factors generating the increasing
demand for these helicopters include:
� The more than doubling of Third World tank and
armored personnel carriers (APC) inventories since
1974. Tank inventories have grown from 16,900 to
37,500, and APC fleets have expanded from 17,500
to 44,000 vehicles during the same period.
� The demonstrated effectiveness of antitank helicop-
ters in recent conflicts. During the 1982 Lebanon
war, for example, both Syria and Israel scored
impressive victories with attack helicopters against
ground armor. (b)(3)
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For a more detailed discussion of the attack helicopter export
market see DI Typescript Memorandum GI M 85-10067
April 1985, Attack Helicopters: Strong Demand Abroad.
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Many Third World countries
are attracted to the versatility
and firepower that antitank he-
licopters�such as the French
Gazelle and Italian A-129�
can provide.
Several countries have already taken steps to expand
their existing ground attack helicopter inventories:
� The Syrian Air Force recently purchased 15 Ga-
zelles from France to replace war losses,
Syrian
interest in acquiring 20 French Dauphin II attack
helicopters with night-fighting capability.
� The Egyptian Air Force has placed an order for 24
additional Gazelles, some of which will be manufac-
tured domestically.
� The Spanish Army will decide soon on the purchase
of 30 US antitank helicopters to expand its current
force of four AH-ls and 28 B0-105s.
� The Israeli Air Force is evaluating the US AH-64
and AH-1T Cobra and will purchase 12 in the near
future, with the option of a follow-on buy of 12 to 24
aircraft
Whichever helicopter is chosen, it will be armed
with new generation Hellfire ATGMs.
� We expect that both Iran and Iraq will make large
purchases of attack helicopters to build effective
heliborne antitank units. Iraq has already shown an
interest in West European helicopters to replace war
losses, and we believe Baghdad will expand its
inventory by 120 aircraft to surpass the strength of
Iran's prewar force. Iran probably will refurbish
some of its 200 AH-ls�of which only 25 are
currently operational�and may purchase around
60 helicopters to replace irrepairable aircraft after
the war
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--secut,
Several countries that previously did not possess
heliborne ground attack capabilities have recently
purchased aircraft or plan to purchase them over the
next decade. For example:
� The Jordanian Air Force has requested 24 AH-1
gunships from the United States
� Pakistan received its first part of a total shipment of
20 AH-ls in January of this year.
� Sweden recently decided to purchase 20 B0-105
antitank helicopters from West Germany,
� Denmark, the Netherlands, Belgium, and Switzer-
land hope to establish attack helicopter units of
between 12 and 28 aircraft and are evaluating the
British Lynx-3, the US Hughes 500 MD, and the
West German B0-105 for possible procurement,
according to press reports
In addition to these countries, we believe several
others will also buy antiarmor helicopters. Within
NATO, Greece, Turkey, and Canada are likely to
establish attack helicopter units. Potential Third
World recipients include China, Argentina, Yugosla-
via, South Africa and possibly Indonesia, Thailand,
Taiwan, and the Philippines. Each of these countries
either fields a large, professional military, perceives
an imminent threat, or is in the process of a major
modernization of its helicopter inventory. We believe
most of these countries will create relatively small
attack helicopter units of 12 to 24 aircraft, but some,
such as China and India, may place larger orders for
50 to 70 aircraft.
Countries that purchase ground attack helicopters
will also need to buy observation helicopters to work
with their attack units, thereby further expanding the
market. Observation helicopters reconnoiter the battle
area and function as a command and control link
between ground troops and attack helicopter pilots.
The UN embargo on arms sales to South Africa makes a direct
purchase of attack helic Ipters from an established supplier doubt-
ful. The South African Air Force probably will purchase compo
nents and fit ATGMs to existing light utility helicopters.
Some militaries purchase nearly as many scout heli-
copters as attack aircraft. For example,
(b)(1)
Saudi Arabia plans to purchase
(b)(3)
15 observation helicopters to operate with its 21
(b)(1)
armed helicopters.
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7
Counterinsurgency
The demonstrated effectiveness of helicopters against
insurgents will also boost future export sales. The
helicopter's mobility and ability to operate at low
altitudes enable government forces to place troops
into contested areas and concentrate their firepower
against insurgent forces in rural, jungle, or mountain-
ous areas more effectively than with fixed-wing air-
craft or armored vehicles. Furthermore, helicopters do
not need the extensive runway, pilot training, and
support facilities required by fixed-wing fighters and
can therefore be directed against a rapidly developing
threat more quickly. Some Third World armies are
establishing special anti-insurgent groups and equip-
ping these units with helicopters. For example, the
Ecuadorean Army has become increasingly concerned
about internal security problems as the possibility of a
major border confrontation with Peru diminishes.
Other Third World countries in Latin America and
East Asia have also taken steps to enhance their
counterinsurgent capabilities through expansion of
their helicopter inventories:
� Peru recently requested 12 BK-117 and four BO-
105s from West Germany for use against Sendero
Luminoso insurgents around Ayacucho.
� Thailand is negotiating with a US firm for the
purchase of at least two CH-47 troop-transport
helicopters.
� Colombian officials approached the United States
to buy 12 UH-1 helicopters, following a terrorist
attack by M-19 last summer.
� The director of the Mexican Marine Corps wants to
buy an undisclosed number of utility helicopters for
use by antiguerrilla warfare units
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Heavy-Lift and Naval Helicopters
Heavy-lift helicopters will also contribute to a larger
export market, but on a considerably smaller scale
than attack helicopters. Heavy-lift rotocraft have
constituted only a small percentage of the export
market-2 percent since 1974�because of their:
� High unit cost. A CH-47 or CH-53 costs between
$14 million and $25 million apiece, and the Soviet
MI-26 sells for approximately $12 million.
� Unsuitability for national defense purposes. Few
Third World countries need to deploy rapidly large
numbers of troops or heavy equipment.
Nonetheless, we believe sales of this category of
helicopter will pick up as some developed and a few
Third World countries with large inventories move to
establish more comprehensive helicopter capabilities.
Spain, for example, recently signed a letter of agree-
ment to purchase six CH-47 Chinooks from the
United States, thereby expanding its heavy-lift capa-
bility by 50 percent. We believe that China will
develop into a sizable market. The People's Liberation
Army currently operates only three Soviet MI-10
Hooks, and the acquisition of heavy-lift helicopters
would complement the overall modernization of the
PLA's helicopter inventory. Moreover, the Indian Air
Force has expressed an interest in purchasing Soviet
(b)(3) MI-26 helicopters.
(b)(3)
Naval attack and antisubmarine warfare helicopter
exports will also increase but will be limited to
countries fielding relatively large navies. For example,
the Secretary of the Mexican Navy has approved the
installation of a helicopter platform on each of the
Navy's four Aquila-class frigates and the purchase of
four British antisubmarine Lynx helicopters. Similar-
ly, the Brazilian Navy is considering building a
carrier fitted with helicopters instead of fixed-wing
aircraft.
Outlook for Suppliers
Helicopter purchases over the next 10 years should
favor West European manufacturers that offer attrac-
tive financing and a wide variety of aircraft to meet
customer demands. Sales of US helicopters are likely
to diminish somewhat, as only those few Western
customers willing and able to pay premium prices will
turn to Washington for advanced weapon systems.
Traditional Soviet clients, such as Syria, Libya, and
Iraq, should continue to purchase most of their trans-
port helicopters from Moscow. The gap between level
US and Soviet sales and growing demand will be
filled by emerging suppliers in Eastern Europd and
the Third World, who in the past have limited their
helicopter production for the most part to domestic
requirements.
Western Europe
West European helicopter manufacturers should dom-
inate the military export market over the next 10
years, according to attache reports
he competitive position of West European
producers in the market will be enhanced by govern-
ment programs designed to bolster the ailing sectors
of their national defense industries. Declining demand
for their jet combat aircraft and naval warships, for
example, has prompted West European governments
to increase direct subsidies and soft loans to all of
their domestic arms industries, including helicopter
manufacturers. More liberal government financial aid
will allow West European producers to offer financial-
ly strapped Third World recipients preferential fi-
nancing packages and to increase their research and
development efforts. Furthermore, we expect West
European manufacturers to benefit from the trend in
Europe to replace light and medium transports and
attack helicopters
West European helicopter producers are already tak-
ing steps to improve their competitive position in the
export market through:
� Codevelopment. Britain's Westland and Italy's
Agusta are jointly building the EH-101 antisubma-
rine warfare helicopter,
Export prospects
for the EH-101 are enhanced by bringing together
Italy's extensive experience as an arms supplier to
the Middle Eastern and British sales programs in
Sc et
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The Civil-Military Relationship
The demand for civil helicopters plays an important
role in the military helicopter export market. On the
one hand, the sale of civil helicopters�which, minus
weapons and other equipment, are often identical to
military models�creates longer production runs and
economies of scale, thereby reducing unit costs of
military helicopters. The availability of civil helicop-
ters also allows Third World countries to circumvent
restrictive arms export policies, avoid potentially
embarrassing arms transfers, and enhance their mili-
tary capabilities. Civil model helicopters can perform
important military transport and observation duties
and are easily adapted for combat missions with the
addition of guns, rocket pods, or guided missiles
and civil helicopter production. We believe this could
result in longer leadtimes for military helicopter
development, increased research and development
expense, and generally higher unit costs
Security Implications
The sale of civil model helicopters provides a conve-
nient mechanism for suppliers and recipients to mask
politically sensitive weapon sales or circumvent re-
strictive arms export policies. Civil airframes can
usually be converted for combat purposes with the
addition of electronic equipment and rocket pods,
guided missiles, or machineguns.
Production
The civil market for helicopters is acquiring increas-
ing importance for helicopter manufacturers. Accord-
ing to aerospace industry studies, civil deliveries
accounted for only 19 percent of all non-Communist
helicopters produced in the 1960s. The proportion
doubled during the 1970s, and non-Communist civil
deliveries are projected to make up 63 percent of all
deliveries over the next 10 years. For the Soviet
Union, conversely, civil production has decreased.
The extensive use of helicopters to transport equip-
ment and workers boosted civil production to 75
percent of all production during the 1960s. By 1980
this proportion had fallen to 10 percent as the
Soviet's military helicopter inventory expanded. The
longer production runs for older Soviet-model heli-
copters to meet civil demand have played an impor-
tant role in making Soviet helicopters cheaper than
their Western counterparts.
The growing importance of the civil helicopter market
could, ironically, cause the price of military helicop-
ters to rise in the future. In the past, helicopters were
designed principally for military purposes and were
easily converted for the civil market. Now, however,
the civil market demands greater reliability, safety,
comfort, and lower acquisition and maintenance
costs; the military programs stress survivability, low
life-cycle costs, reduced detectability, and enhanced
maneuverability. The growing differences between
these two distinct markets have forced helicopter
manufacturers to specialize their military
a Chilean firm is
designing a "bolt-on" kit to capitalize on the easy
convertibility of standard helicopters into gunships.
Furthermore, civil model helicopters require few al-
terations to perform important military transport or
observation missions. Consequently, several countries
have turned to the civil market to meet their military
helicopter requirements:
� Iraq bought 24 commercial B0-105s in 1982 from
Spain, which produces the aircraft under West
German license. The aircraft were delivered in an
unarmed version to circumvent Bonn's strict arms
export policies forbidding sales to areas of tension.
The Iraqi armed forces uses approximately 10 of
these aircraft for attack purposes and the remain-
der in a utility role.
� North Korea recently received more than 80
Hughes helicopters
We believe the North
Koreans will fit some of the aircraft with antitank
guided missiles and use them for attack missions.
These helicopters are nearly identical to the
Hughes 500 MDs coproduced in South Korea and
used by the South Korean military forces, making
them ideal for infiltration missions.
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South Asia and the Pacific. France and West
Germany recently agreed to joint development of
the PAH-2/HAC antitank helicopter, which will
begin production in the early 1990s. Eurocopter
the organization created to manage development of
the helicopter�was established in Paris under
French law. We believe Bonn and Paris agreed to
this arrangement similar to the management
structure for the Franco-German Alpha jet and
Euromissile programs�to expedite exports of the
aircraft that could otherwise be halted by West
German arms export restrictions.
� New Markets. Licensing arrangements with US
firms restricted Agusta and Westland from export-
ing helicopters to East Asia. Now, however, these
firms are aggressively exporting domestically de-
signed and produced helicopters. Italy's Agusta, for
example, recently announced that it will assign
permanent representatives to Singapore to push
sales of its A-109 and A-129 helicopters in South-
east Asia. We expect Britain's Westland to be more
active in exporting its indigenous models�the
Westland 30 and Lynx-3�to East Asia and the
Middle East
In addition to exporting airframes, West European
armament manufacturers offer the weapon systems
and ancillary equipment needed to configure helicop-
ters for armed missions. The Euromissile consortium,
for example, will introduce the HOT-2 missile with an
improved warhead by 1987 to replace the current
HOT antitank guided missile and is developing a
third-generation missile to replace HOT-2 in the early
1990s. In addition, the success of the Exocet in the
Falklands conflict has heightened Third World inter-
est in antiship missiles. West European missile pro-
ducers dominate the market for sea-skimming anti-
ship missiles launchable from helicopters with the
British Sea Eagle and Sea Skua, the French Exocet
AM-39 and AS-15TT, the Italian Marte, and the
Norwe2ian Pen2uin (table 21.
Finally, we believe West European manufacturers will
sell attack helicopters to several countries that in the
past have purchased a majority of their helicopters
from the Soviet Union. Iraq, for example, is reported-
ly dissatisfied with the MI-25 because of its poor
maneuverability and maintenance problems and has
already expressed interest in buying European air-
craft
Soviet Union and Poland
We believe Soviet exports will slip slightly over the
next 10 years, but most of Moscow's clients will
continue to purchase Soviet helicopters. Past Soviet
clients, such as Iraq, Libya, Syria, and Vietnam, will
buy the bulk of their transport helicopters from
Moscow because of their political alignment and
established helicopter support facilities and training
programs.
hat Soviet helicopters are attractive to tradi-
tional customers because they are considerably less
expensive than Western aircraft�on average half to
two-thirds the cost�and are considered reliable. Sovi-
et helicopters are cheaper because of the relatively
simple production technologies used and the long
production runs needed to fill domestic orders.
for example, that an MI-26 Halo
heavy-lift helicopter costs about $12 million, or one-
half the price of a comparable Western helicopter�
the Sikorsky CH-53. The Iraqi Air Force reportedly
paid only $500,000 for each MI-8 helicopter. The
Iraqis do not attempt to overhaul or make extensive
repairs to damaged or wornout aircraft because of the
low price.
he Italian firm FIAR is
working on a new low-cost, look-up/look-down radar
for use on fixed-wing aircraft and helicopters. Compa-
ny representatives have stated that the radar system is
tailored for the export market, designed to give old
planes new capabilities at the comparatively modest
cost of less than $1 million per system.
We believe the Soviet Union will offer its most
advanced attack helicopter�the MI-28 Havoc to
counter clients' interest in Western models. The Hav-
oc incorporates target acquisition and night vision
equipment and has been designed for better accelera-
tion and agility than the cumbersome Hind. We
10
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Table 2
Helicopter-Launched Sea-Skimming Missiles
(b)(1)
(b)(3)
expect the first offers of this helicopter outside the
Warsaw Pact to go to Iraq and Syria. The cost of the
Havoc, however, probably will approximate those of
Western equipment. We believe the use of new tech-
nology subsystems in the Havoc and other new gener-
ation Soviet helicopters will drive up their unit costs,'
thereby reducing the cost advantage Soviet helicop-
ters now have over Western aircraft
Barring drastic political changes in the countries that
now own Western helicopters, none of these countries
is likely, in our view, to place large orders for Soviet
equipment. For example, Malaysia has recently
shown an interest in acquiring Soviet helicopters to
redress the growing trade imbalance between Kuala
Lumpur and Moscow. A Malaysian delegation visited
Moscow and was shown the MI-8, MI-17, and MI-26.
For a more comprehensive analysis of Soviet helicopter production
processes and new programs, see DI Intelligence Assessment SOYA
84-10205X/ SW 84-10102X December
1984 The Soviet Helicopter Industry: Development and Prospects.
11
(b)(3)
Malaysia will continue to purchase Western helicop-
ters and may use the Soviet visit to pressure Western
manufacturers to lower their prices. Malaysian offi-
cials have reportedly balked at the purchase of Soviet
helicopters because it would necessitate establishing a
Soviet logistic support system and accepting depen-
dence for spare parts on Aviaexport�the only source
of Soviet support equipment to export recipients.
We believe Poland's position in the international
market will be sustained through the production of
the W-3 Sokol, which will replace the MI-2 as
Poland's main production item.
(b)(1)
(b)(3)
(b)(3)
(b)(1)
(b)(3)
Warsaw Pact forces will
continue to be the dominant market for Poland, as the
W-3 augments aging MI-4s in allied inventories.
(b)(3)
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"Steret�__
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Table 3
Licensed Production of Helicopters
in the Third World and Eastern Europe
Licensor
Recipient
Helicopter
Date of Agreement
Status
France
India
Lama
1970
172 produced
Alouette III
1964
273 produced
Renewed 1976
Egypt
Gazelle
1981
61 produced
Super Puma
1983
Production beginning
Brazil
Puma
1978
90 produced
Lance
1978
50 produced
China
Dauphin
1981
48 assembled
Indonesia
Puma
1981
31 produced
Super Puma
Pakistan
Alouette III
1970
10 assembled
Romania
Alouette III
1970
100 produced
Puma
1974
40 produced
Yugoslavia
Gazelle
1970
123 produced
West Germany
Philippines
B0-105
1978
50 assembled, produc-
tion ceased due to lack
of funds
Indonesia
B0-105
1976
85 produced
BK-117
1984
Production beginning
Soviet Union
China
MI-4
1959
Approximately 300
produced for PLA
(b)(1)
(b)(3)
(b)(1)
(b)(3)
Emerging Suppliers
We believe licensed producers of helicopters in the
Third World and Eastern Europe (table 3) will come
to play a greater role in the expanding export market.
Since 1974 they have accounted for almost 3 percent
of total export sales. We believe that India, Romania,
Brazil, and Indonesia will become the more prominent
exporters in this group
for example, Romania has developed a smaller
version of the Puma it produces under French license
that will be armed with ATGMs.
The market
share of these licensed producers, however, will be
limited by the desire of the�mostly Western manu-
facturers that hold the licenses. Moreover, we do not
expect any of these emerging suppliers to embark on
purely indigeneous programs in the near future, a
development that would provide them greater flexibil-
ity in the export market.
Implications for the United States
The proliferation of attack helicopters could pose a
serious threat to US interests. We believe the intro-
duction of this capability into many Third World
militaries will significantly increase their ability to
conduct antiarmor operations. During the Lebanon
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(b)(1)
(b)(3)
conflict, for example, Israeli and Syrian helicopters
equipped with antiarmor missiles destroyed a number
of tanks and APCs. We believe Israeli and Syrian
successes could be duplicated by some other Third
World armies possessing attack helicopters. Further-
more, many attack helicopters available on the inter
national market today have night vision equipment
and mast-mounted sights not avaliable on earlier
models. Night vision equipment eliminates the need
for flares or other illuminating devices, thereby giving
attacking units greater protection and flexibility;
mast-mounted sights make helicopters less susceptible
to attack by permitting fire from concealed positions.
The expansion and modernization of Third World
helicopter inventories will result in generally improved
mobility of the affected armed forces. The rapid
deployment of troops and equipment in Third World
countries, such as Jordan, Peru, Pakistan, Thailand,
and North and South Korea, is hindered by poor road
networks and mountainous terrain. These problems
can be overcome by greater reliance on helicopters for
transport functions. Expansion of helicopter assets
will allow many of these countries to move troops
quickly from one region to another and sustain logistic
supply lines for both conventional and anti-insurgent
operations. for example,
the South Korean Army Chief of Staff views the
continued expansion of Korea's helicopter inventory
as necessary for quick movement of special forces and
commando units to critical battlefield areas.
As an exporter, the United States will, we believe,
maintain significant helicopter exports with estab-
lished customers, but exports will not expand over the
next 10 years. US manufacturers have lost one of
their largest customers, Iran, which received nearly
200 US attack, utility, heavy-lift, and mine counter-
measure helicopters from 1975 through 1979. This
loss, however, may be balanced by planned modern-
ization and expansion of helicopter forces in South
Korea, Saudi Arabia, and possibly China. Most for-
eign customers will be attracted to US systems by
their technological edge over competing aircraft. The
Chinese Air Force, for example, chose the Sikorsky 5-
70C over a comparable French model because of its
superior speed, rate of climb, and service ceiling. The
technological advantages of US systems, however, will
13
be offset by their generally higher costs.
US security assistance officials may receive more
frequent requests for surplus helicopters as US armed
forces modernize their medium-lift helicopter force.
We believe Latin American, Southeast Asian, and
(b)(11
Pacific countries will be the most frequent requesters
of aging UH-1�series helicopters, and many of these (b)(3)
helicopters may be used to combat insurgent forces.
Costa Rica, for example, hopes to purchase 20 surplus
UH-lBs and may configure them as gunships
equipped with portal machineguns.
The significance of this sector of the
market will be limited somewhat, however, by the
inadequate support facilities and pilot shortages fac-
ing many of these countries
(b)(3)
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Appendix A
Military Helicopter Exports,
1975-84
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Table A-1
Soviet Union: Military Helicopter Exports, 1975-84
Recipient
Total
Eastern Europe
Middle East/
North Africa
South Asia
Southeast Asia
Latin America
Africa
Total MI-2 MI-6 MI-8 MI-14 MI-25 KA-25 MI-17 MI-10 MI-4
KA-26
1,941 3 33 1,176 82 503 75 59 2 8
316
861
193
149
157
219
(b)(1)
(b)(3)
(b)(1)
(b)(3)
(b)(1)
(b)(3)
(b)(1)
(b)(3)
(b)(1)
(b)(3)
(b)(1)
(b)(3)
(b)(1)
(b)(3)
Western Europe
8
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(b)(3)
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Table A-2
France: Military Helicopter Exports, 1975-84
Recipient
Total Lama Super Super
Alouette Frelon
Puma
Gazelle Ecureuil Dauphin
Total
1,626 250
488
28
314
413
113
20
Eastern Europe
315
Middle East/North Africa 408
South Asia
378
East Asia
56
Southeast Asia
51
Pacific
10
Latin America
246
(b)(1)
(b)(3)
(b)(1)
(b)(3)
(b)(1)
(b)(3)
(b)(1)
(b)(3)
(b)(1)
(b)(3)
(b)(1)
(b)(3)
(b)(1)
(b)(3)
17
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Table A-2 (continued)
Recipient
Africa
Western Europe
Total
111
51
Lama Super Super
Alouette
Frelon
Puma
Gazelle Ecureuil Dauphin
Sec 18
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SecLc..L
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Table A-4
Poland: Military Helicopter Exports,
1975-84
Recipient
MI-2
Total
1,105
Soviet Union
945
East Asia
Middle East/North Africa
56
-
Se et 20
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--S'eefet_
Table A-5
Italy: Military Helicopter Exports, 1975-84
Recipient
Totals
AB204 AB212 SH-3 CH-47 A-109
AB205 AB412
AB206
Total
468
216
110
28
99
15
Middle East/
North Africa
Latin America
Africa
Western Europe
306
37
43
82
21
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Th-refeL
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Table A-6
West Germany: Military Helicopter Exports, 1975-84
Recipient
Total
B0-105
Alouette a
BK-117
Total
283
264
17
(b)(1)
Middle East/
North Africa
(b)(3)
East Asia
(b)(1)
Southeast Asia
67
(1D(3)
(b)(1)
Mexico
Africa
7
7
(b)(3)
37
(b)(1)
(b)(3)
Western Europe
149
(b)(1)
a Used aircraft.
(b)(3)
(b)(3)
22
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Table A-7
United Kingdom: Military Helicopter Exports, 1975-84
(b)(1)
(b)(3)
(b)(1)
(b)(3)
(b)(1)
(b)(3)
(b)(1)
(b)(3)
(b)(1)
(b)(3)
(b)(1)
(b)(3)
Recipient
Total
WASP
Sea King
Lynx
Commando
Total
108
4
26
49
29
Middle East/
North Africa
32
South Asia
3
Pacific
16
Latin America
2
Western Europe
55
Western Germany
6
6
23
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Table A-8
Other Suppliers:a Military Helicopter Exports,
1975-84
Recipient
Total
Middle
Asia
Western
Latin
Eastern
East
Europe
America
Europe
Total
175
47
45
44
16
23
Middle-East
38
18
20
Asia-Pacific
59
2
37
20
Latin America
33
16
1
16
Africa
45
11
7
4
23
Tht.sr< 24
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Appendix B
Projected Military Helicopter
Deliveries Through 1995 by Region
25
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Table B-1
Projected Military Helicopter Deliveries to
Attack
Naval Warfare
Light
Medium
Heavy
565
541
106
365
71
25
15
75
6
28
40
70
48
35
6
10
12
12
200
100
30
20
15
10
10
70
24
10
10
12
80
30
6
30
24
10
20
20
100
28
60
28
4
95
100
120
26
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�.s..,
Table B-2
Projected Military Helicopter Deliveries
Light
Medium
Heavy
Attack
Naval Warfare
241
912
62
319
39
15
85
10
100
24
30
150
30
60
60
150
120
110
20
24
10
18
24
10
12
10
20
100
20
10
15
15
5
35
54
12
24
30
40
35
10
15
6
10
25
10
27 -Ve�g<
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Table B-3
Projected Military Helicopter Deliveries to
Light
Medium
Heavy
Attack
Naval Warfare
480
635
115
345
64
30
12
55
40
20
5
5
10
5
200
20
72
50
20
10
48
10
25
30
24
50
55
72
12
35
15
12
5
10
15
40
10
5
20
20
15
12
10
10
100
40
21
12
30
20
10
50
3
12
10
20
90
28
5
30
20
12
28
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S�et
Table B-4
Projected Military Helicopter Deliveries
Light
Medium Heavy
Attack
Naval Warfare
241
227
30
22
10
20
12
10
4
30
30
15
15
20
20
20
30
10
6
5
15
5
10
30
10
5
10
20
10
12
12
12
10
5
25
15
5
2
30
10
29
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Table B-5
Projected Military Helicopter Deliveries
Light
Medium
Heavy Attack
Naval Warfare
195
117
20
12
20
15
10
2
5
2
5
3
2
5
5
15
3
3
20
5
80
50
10
20
4
20
10
10
''TtaL 30
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Table B-6
Projected Military Helicopter Deliveries
Naval
Warfare
Light
Medium Heavy
Attack
1,260
70
50
(b)(1)
-
5
(b)(3)
40
10
160
8
65
20
10
30
20
8
30
24
950
31
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