If Sikorsky Aircraft Corp.”™s S-76 is good enough for Queen Elizabeth II and James Bond, perhaps it will again prove itself worthy for the United Kingdom”™s maritime needs.
Two years after a syndicate got the inside track on a mammoth contract to use new Sikorsky helicopters in coastal search and rescue ”“ only to see it ripped away over allegations of improper bidding procedures ”“ Britain reportedly is again seeking bidders to take over its maritime rescue operations.
In 2010, Britain”™s ministries of defense and transportation selected Canada-based CHC Helicopter as the “preferred bidder” to take over search-and-rescue helicopter operations, with CHC selecting Sikorsky and its S-92 helicopter for the job.
According to Bloomberg, the United Kingdom is now reopening bidding on the potential $5 billion contract, with CHC again a bidder along with Bond Aviation Group and Bristow Helicopter, the latter based in Houston and operating a large fleet of Sikorsky helicopters.
If Bond Aviation Group represents a formidable rival for CHC, operating bases throughout the United Kingdom, it was Sikorsky that got a bit of free publicity during the Olympic Games opening ceremonies, depicting Queen Elizabeth II and James Bond actor Daniel Craig skydiving into the Olympic Stadium in London”™s Stratford district from the monarch”™s Sikorsky S76C++ helicopter.
Stratford-based Sikorsky is fresh off a momentous second quarter, its last under Jeff Pino who stepped down as Sikorsky president entering July. Pino capped his six-year-plus stint leading Sikorsky with a new U.S. Department of Defense helicopter deal with a baseline value of $8.5 billion and options that could escalate the deal to $11.7 billion. And Sikorsky had a flurry of smaller but significant international deals during the quarter, most recently a $235 million deal to sell helicopters to Thailand.
Despite the new contracts, sales totaled $1.6 billion in the second quarter, 9 percent lower than a year ago, and Sikorsky operating profits fell 23 percent to $213 million.
Sikorsky continues to struggle, meanwhile, with continued delays in shipments of its new Cyclone maritime helicopter to the government of Canada.
Canadian Defense Minister Peter MacKay reportedly called the Sikorsky Cyclone contract “the worst procurement in the history of Canada,” and said the country needs the aircraft to replace aging Sikorsky Sea King helicopters it currently uses for coastal duties, including search and rescue.
“They”™re going to go right out of aviation service and into the museum in Ottawa, and that”™s not a joke,” MacKay said, as quoted by CBC.
Sikorsky expects to ship five Cyclones to Canada this year, according to Greg Walsh, CFO of Sikorsky parent company United Technologies Corp.
“But obviously if those slip into next year, it gives us a little more headwind,” Walsh said. “I think there”™s nothing to do in terms of next year”™s issue around delivering the 19 helicopters financially until we resolve the contractual and configuration issues. But we clearly have an eye toward that ”¦ to see what we can do to help offset some of that and what will be a pretty big headwind at Sikorsky next year.”
United Technologies CEO and Canada native Louis Chenevert said the Cyclone elicited “high interest” at Farnborough on the eve of Sikorsky”™s Olympic moment, but acknowledged the continued frustrations in the Canada program.
“While it”™s been a painful experience to this point ”¦ there”™s potential to deliver basically many, many new helicopters of the same configuration that we”™ve now developed,” Chenevert said.
