DJ US Navy Expects Foreign Interest In V-22 To Ramp Up Next Year
By Rebecca Christie
Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)--The U.S. Navy expects foreign interest in the V-22 Osprey to ramp up next year, after the new tilt-rotor aircraft has made its combat debut, officials told Dow Jones Newswires.
The Navy hosted a private air show last week for 46 officials from 16 countries who trekked to Maryland's Patuxent River Naval Air Station. The so-called embassy day was a first for the V-22, a new kind of aircraft that can take off like a helicopter and fly like a plane. Boeing Co. (BA) and Textron Inc.'s (TXT) Bell Helicopter unit are the prime contractors.
The U.S. Navy wants other militaries to buy the aircraft so it can share combat-zone maintenance costs and also benefit from bulk production. The V-22 costs nearly $70 million per aircraft, but the Navy hopes to shave about $10 million off that price after a five-year production contract starts next year.
Ken Moritz, the Navy's director of V-22 business development, predicted serious foreign inquiries would start in mid-2008. He said at least four countries appear likely to place orders if the aircraft prove themselves in Iraq.
"Our deployment in September is going to be the key," Moritz said in a telephone interview, in the Navy's first public discussion of last week's private event.
That deployment is the Navy's top priority for the V-22, which is expected to be declared operational in coming weeks. The Navy said it won't be sending any V-22 aircraft to this year's Paris Air Show.
The U.K. may be among the first foreign buyers, as its military has shown a keen interest in the Osprey. Other countries attending the demonstration were France, Italy, India, South Korea, Canada, Taiwan, Denmark, the Netherlands, Saudi Arabia, Australia, Singapore, Japan, Spain, Germany and Norway.
Israel, also a potential V-22 customer, didn't attend. The Navy said the guest list wasn't an exhaustive one of all the countries eyeing the aircraft.
If foreign orders start rolling in, they are likely to augment the U.S. production line but not crowd it. The Navy plans to buy about 35 aircraft a year once the long-term contract starts. The Bell-Boeing production line is set up to make 42 aircraft a year, with the potential to expand to 48 a year if demand warrants.
A V-22 squadron includes 12 aircraft. Moritz said a typical foreign purchase would be one squadron's worth of planes, although a few countries might have a larger interest.
"They have to make sure they have the budget," Moritz said. "We on this side of the house, with Bell-Boeing's support, have to make sure we have the capability to produce the numbers they want."
One country that attended the demonstration isn't committing to any firm interest. A Canadian embassy spokesman said Canada attended the event as an orientation, not a sales pitch.
Bell and Boeing provided sandwiches and a bus ride to last week's event, but it was otherwise a Navy show. Moritz said the Navy's only big cost was fuel for the plane's flight demonstration and a few get-acquainted rides. The V-22 aircraft were already in the area for military exercises.
By Rebecca Christie, Dow Jones Newswires; 202-862-9243;