Airbus watching whether UTC will sell Sikorsky helicopter unit

HERZLIYA - Reuters

Louis Chenevert, Chairman and CEO of United Technologies Corporation (UTC), stands beside the new Sikorsky Aircraft S-97 RAIDER helicopter at its unveiling ceremony at Sikorsky Aircraft in Jupiter, Florida in this October 2, 2014, file photo. Reuters Photo

Airbus is “watching with interest” to see whether United Technologies Corp (UTC) puts its Sikorsky helicopter business up for sale, the head of Airbus’ US division said on June 8.

UTC expects to make a decision on whether the conglomerate will divest Sikorsky in a couple of months.

“We are watching that with interest. We are interested to see what United Technologies intends to do with Sikorsky,” Allan McArtor, chief executive of Airbus Group, Inc, told Reuters on the sidelines of the annual Herzliya Conference in Israel.

He declined to elaborate.

McArtor said Airbus was interested in acquisition opportunities, particularly anything in the areas of defense, space, helicopters, cyber security and 3D manufacturing.

He noted that Airbus was opening a new facility in Silicon Valley devoted to start-ups and has just launched a $100-$150 million venture capital fund to provide seed financing to high tech start-ups.

Airbus Group, Inc, supplies helicopters in the United States to buyers such as the Coast Guard, US Army and US Navy.

While Airbus is not very active in Israel, McArtor said the country’s high tech sector was “fertile ground for collaboration” and provides great opportunity.

Israel’s dedication to developing its defense capabilities has been expanded to cyber space in recent years, spawning an industry that has attracted a near fourfold increase in venture capital investment since 2010.

“Protection of networks is something we are all interested in,” McArtor said.

Growth at Europe’s Airbus, as well as at rival Boeing , was being driven by emerging markets in the Middle East, India, China, southeast Asia and Latin America, as well as by global low cost airlines, he said.

Much of the purchases are for single-aisle short-haul aircraft.

The US market is mature but with a wave of consolidation nearly over, airlines are turning their attention to modernizing their fleets and reducing carbon emissions.

“With the cost of money being near zero and the price of fuel going down, they are in a more healthy position to buy more new airplanes,” said McArtor, adding that passengers are demanding more modern fleets.

He said growth in US aircraft orders was about 4-4.5 percent a year and he expected orders of planes in the Americas to be some 4,600 over the next two decades.

The Middle East is Airbus’ largest market but Israel’s flag carrier El Al has an all-Boeing fleet. Airbus supplies planes to smaller Israeli carriers Arkia and Israir.

McArtor said El Al would have to modernize its fleet as its market share has eroded due to competition from low-cost carriers.