Frost & Sullivan study forecasts spike in DoD spending on COTS AircraftNews
June 06, 2013
MOUNTAIN VIEW, CA. Frost & Sullivan’s Aerospace and Defense practice has issued a study that forecasts a spike in spending on Commercial Off-The-Shelf (COTS) aircraft by the Department of Defense (DoD). The report shows that COTS aircraft will be favored over new designs because they reduce long-term development costs and provide Quick Reaction Capability (QRC) by circumventing the Program Of Record (POR) procurement process.
Although market growth will be limited, the study shows that spending for fixed- and rotary-wing COTS aircraft reached $4.71 billion in 2012 and will spike as the Boeing KC-46 and P-8 Poseidon enter full-phase production from 2013-2016. Spending will then decrease to an estimated $4.76 billion in 2017, the findings predict.
In addition to limiting Research and Development (R&D) costs because they do not require new designs, COTS aircraft provide commanders QRC when developing new weapons systems.
"Due to the quickly changing need of commanders in different theaters of operation, COTS aircraft allow a faster delivery time since they only need to be altered for missions, rather than built from the ground up," says Michael Blades, Senior Industry Analyst, Frost & Sullivan. "Planned budget cuts will continue to force military service leaders to consider COTS aircraft before committing to significantly higher costs of new aircraft design and development."
The report also notes that a roadblock for the COTS market is the lack of rules for defining requirements of new aircraft systems. This leaves potential for industry and government collaboration to find common methods for program requirements, which could further increase the value of COTS aircraft.
More information on the study can be found at www.defense.frost.com.