Sikorsky Bags $1.28 Billion U.S. Helicopter Deal

Sikorsky won a $1.28 billion contract to develop a combat rescue helicopter for the U.S. Air Force.

The contract could sooner or later be worth up to $7.9 billion reported Reuters. The initial contract covers development and delivery of four Combat Rescue Helicopters (CRH) based on the company's workhorse UH-60 Black Hawk, and caps nearly 15 years of repeated failed efforts by the Air Force to replace its aging fleet of HH-60G Pave Hawk rescue helicopters.

The Air Force said Sikorsky and its key supplier, Lockheed Martin Corp, beat the service's affordability target by about $700 million.

Sikorsky noted that it has built combat search and rescue helicopters for the U.S. military since 1943.

Work on Black Hawk variants for the Army and Navy would allow Sikorsky to leverage economies of scale in the supply chain and lower costs, Sam Mehta, president of Sikorsky Defense Systems and Services, told Reuters.

Lockheed said it would supply the mission systems and special equipment for the new helicopters, including adverse weather sensors, defensive systems and mission computers.

The new contract and a separate one for a new presidential helicopter will bolster Sikorsky production from 2019 on, but the company still faces challenges in the near-term because of declining U.S. military spending, Mehta added.

The Air Force had awarded Boeing Co a contract to build 141 rescue helicopters based on its twin-rotor CH-47 "Chinook" design in 2006, but the deal was protested immediately by the losing bidders - Sikorsky and Lockheed Martin Corp - and later canceled by then-Defense Secretary Robert Gates.

The Air Force revived the program in 2012, but Boeing, Northrop Grumman Corp and Europe's Airbus later dropped out of the competition, arguing that the Air Force had distorted the requirements to favor Sikorsky's helicopter.