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Dual-Use Technology Program for a Passenger-Cargo Rotorcraft

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Declining budgets are reducing the number of new military acquisition starts. The Army needs to consider new ways of doing business that will permit it to get the most from the acquisition dollars available. One possibility is to exploit dual-use technology programs. The Arroyo Center investigated the feasibility of the notion that the commercial aircraft industry could develop a rotorcraft for the civilian market that would also have application to the military, primarily as a replacement for the CH-47 helicopter. The authors identified and analyzed three likely markets: commuter passenger service in conjunction with same-day cargo deliveries; servicing of offshore oil rigs; and emergency medical services (EMS). The commercial passenger-cargo market is not likely to be viable because the rotorcraft's costs exceed by a wide margin those of the competing fixed-wing aircraft, even if the cost analysis counts the potential savings accruing from the convenience of vertiport locations in or near downtown areas. The offshore oil rig market and the EMS market both prefer a vehicle size of about 7-15 passengers, smaller than the Army's most pressing replacement needs. Further, neither of these markets looks feasible from the standpoint of rate of return on invested capital, if the total investment costs had to be recovered (no subsidies). The authors cannot recommend dual-use as a clear remedy for the Army's need for a near- term medium-heavy rotorcraft, but do suggest the examination of several cost-reducing technologies.