The V-22 Osprey program has been through a lot since its inception, from fatal crashes to a front page TIME Magazine cover that slammed its very existence. Despite doubts over its utility, the program has come through all of the hardships to become a valuable asset to Marines and the Air Force. However, as manufacturer Bell-Boeing looks for other customers of the innovative plane/helicopter hybrid, the platform’s high price tag means its orders are likely to end with the Pentagon — and sooner rather than later.
The Bell-Boeing team has long eyed a number of possible buyers for its V-22 beyond the Marines and Air Force. International orders are always a potentially lucrative opportunity for any contractor providing platforms to the Defense Department, and the company has actively pitched the aircraft to other nations. There’s also the Navy’s upcoming Carrier On-board Delivery (COD) aircraft replacement program, which aims to replace the service’s aging fleet of C-2 Greyhounds. The Army could also be in the market for an aircraft similar to the V-22: a report this month from the Amarillo Globe News in Texas — the V-22 is manufactured in Amarillo — indicates that the Bell Helicopter half of the team wants to pitch a tiltrotor known as the V-280 Valor for the Army’s Future Lift program. And then there are always questions about whether the company can find commercial interest in aircraft.
But despite the aircraft’s abilities, the V-22 remains a very expensive platform – so expensive that it could strike out in nearly all of the above scenarios.
Richard Aboulafia, vice president of analysis at the Teal Group, said it would be a “real stretch” for Bell-Boeing to sell even 40 V-22s on the international market, due to a limited number of countries that could even afford the platform. He estimated that 50 is the most the Bell-Boeing could even dream of exporting. That’s not a lot of aircraft in addition to the 360 sold to the Marines and 50 to the Air Force.
“It’s just a niche machine,” Aboulafia said. “It’s a very capable niche machine, but very few countries have the wherewithal to spend $75 million on a rotorcraft.”
He estimates that Japan could buy 17 Ospreys, Israel between six and 12 aircraft, and perhaps the company can sell another 20 aircraft total to various other governments such as the United Arab Emirates, South Korea, and Britain. But even that is optimistic, he argued.
As for the Army’s Future Lift program, the Valor faces the same price tag problem, plus a key additional one: no Boeing.
“Boeing’s not part of Valor, so that’s a major issue,” Aboulafia said.
The V-22 is also a long shot to win the Navy’s COD competition. It is likely to face competition from Northrop Grumman, which will pitch a newer, better version of the C-2 Greyhound that will be much cheaper. Northrop is already producing a surveillance version of the C-2 in the E-2D Advanced Hawkeye, and benefits from the fact that the Navy is already familiar with the C-2 platform. Bell-Boeing has presented the V-22 as a platform with much better capabilities than the C-2 that would be able to land on ships besides aircraft carriers, but analysts like Aboulafia and Bryan Clark, a senior fellow at the Center for Strategic and Budgetary Assessments, believe that won’t be enough to persuade the Navy to ignore its price tag in a tight budget climate.
Although COD represents Bell-Boeing’s “best chance” to sell more Ospreys, Clark said beyond its price tag is an issue with the fact that the V-22 “may not hold up as well over the 30 years it may be used as a COD.”
Also, the V-22 is expensive to operate at $10,000 per hour, raising costs even further beyond that of a C-2, Clark said.
“[That] puts it in the same league as older fighter aircraft, such as the F-16,” he said. “The Navy may therefore decide to just procure a new version of the C-2 – which would have to be built from scratch, since there is no tooling for the C-2 around and the E-2 is a completely different airframe.”