Saturday, 9 October 2010

The Cost Of A Westland Wildcat

The Agusta Westland Lynx Wildcat helicopter is surrounded by a number of myths and controversies.

The most common of these is that the helicopter is excessively expensive.

An overview of the subject of helicopter costs has been given in another post.

It can be seen from this that the Wildcat is not particularly expensive when it's price is compared to that of a popular competitor,the Sikorsky BlackHawk / SeaHawk family. 

However,this does not tell the whole story.

Details of the Wildcat's project's cost can be found on Part 2,Page 14 of 34 of Ministry Of Defence : Major Projects Report 2009 Appendices and Project Summary Sheets.

By taking the £1,669 Million program cost of the Wildcat project and dividing by the 62 helicopters which are being purchased we get the £27 Million unit program cost which is often quoted.

However,the major projects report says that the original project was for £1,966 Million for 80 helicopters which comes to £24.5 Million each.

The report states that £297 Million was saved by reducing the number of helicopters purchased by 18.

This suggests that the production cost of a Lynx Wildcat is just £16.5 Million.

The differences between these three figures,£27 Million,£24.5 Million and £16.5 Million are the result of the basic economics of design and manufacture.

Designing,developing and setting up production facilities for a helicopter costs much the same regardless of how many are produced.

But if the number of aircraft produced doubles,those one off costs are spread over twice as many airframes and consequently add half as much overhead to the unit program cost of each.

Higher volume production also saves on the direct manufacturing costs.

Every sailor,soldier and airman understands that the more you do something,the better you get at it.

The same applies to design and manufacturing.

The more helicopters you build,the better you get at it and the cheaper those helicopters become.

For both of these reasons,increasing production numbers reduces unit cost.

Conversely reducing production numbers increases unit costs.

Unfortunately,that is exactly what the Ministry of Defence did to the Westland Wildcat.

In fact,that is what the Ministry of Defence does to many projects.

The Ministry of Defence decided to develop a new helicopter on the back of an initial order for just 80.

This meant that the one off costs were spread thickly over a small production quantity and consequently resulted in a relatively high initial unit program cost.

Procurement of helicopters in such small quantities is the consequence of the Ministry of Defence's failure to rationalise it's helicopter fleet.

A rational helicopter procurement strategy might,for example,have examined whether or not it was practical to replace helicopters such as the Griffin,Bell 212,Dauphin and some Gazelles with the same helicopter which replaced the Lynx.

The lack of rationalisation of the helicopter fleet is at least partly attributable to interservice rivalries and in particular the artificial weight limits on the size of helicopters which may be operated by the British Army.

These limits serve no military purpose and could be removed by the Secretary of State for Defence.

The second mistake by the Ministry of Defence was to cut the order from 80 helicopters to just 62.

This pushed unit program costs up by £2.5 Million per helicopter.

This 10% increase in unit program cost is directly attributable to the poor management of the Ministry of Defence.

The manufacturer can in no way be held accountable for this increase.

Agusta Westland has delivered the Wildcat on time and on budget.

However,as always,it's reputation will be sullied by the cost increases imposed by bad management at the Ministry of Defence.

Many other defence manufacturers often have to take the blame for delays and cost increases imposed by bad management at the Ministry of Defence.

These problems were highlighted by the Grey Report on defence procurement.

Another often neglected aspect of the Wildcat is it's equipment fit.

Often the cost of the Wildcat is inappropriately compared to that of "vanilla" transport helicopters.

However,the Wildcat is not a "vanilla" transport helicopter.

It comes in two variants,a reconnaissance helicopter for the army and a maritime attack helicopter for the navy.

Both of these aircraft carry equipment which is not found on basic transport helicopters.

Both variants carry an electro-optical/Forward Looking Infra-Red (F.L.I.R.) turret in the nose.

The naval version also carries a radar and dipping sonar.

The dipping sonar for the Wildcat has not been selected but such sensors can cost about £2 Million each.

A SeaSpray radar will also add more than £300,000 to the cost of each naval helicopter.

While a recent Canadian order suggests the Wescam MX-15Di electro-optical sensor turrets to be fitted to every Wildcat may cost £847,000 each.

 These items add significant cost which makes a cost comparison with a "vanilla" transport helicopter somewhat inappropriate.

An often heard criticism of the Lynx Wildcat is that it makes a poor utility helicopter.

However,it was never intended as a utility helicopter.

According to the Ministry of Defence:

"The AAC's (Army Air Corps) helicopter capabilities are concentrated on delivering the Find and Attack functions, although they also provide limited troop transportation and command support roles."

The British Army wanted a Battlefield Reconnaissance Helicopter (B.R.H.) for the "Find" role.

Agusta Westland developed a Battlefield Reconnaissance Helicopter.

It is rather odd that the Wildcat reconnaissance helicopter should be criticised for not being a good utility helicopter.

If the British Army wanted a utility helicopter it should not have ordered a reconnaissance helicopter.

Criticism for this decision should be directed at the British Army's chain of command and not at Agusta Westland.


Anonymous said...

Great article

Anonymous said...

It will still be rubbish in the hot and high environment in Afghanistan. You forget the old addage of " you can't polish a turd!"

Anonymous said...

" you can't polish a turd!" Ahh yes but you can can cover it in glitter!