AIR SHOW: EADS's Eurocopter Sees Light At End Of 2010 Tunnel

Eurocopter, the world's leading helicopter maker, said Saturday it will feel the brunt of the global economic slowdown in 2010, but the unit of European Aeronautic Defence & Space Co. (EADSY) said it's well-placed to benefit when the market revives.

New orders from nonmilitary and corporate customers dried up in September last year as the global recession took hold, chief executive Lutz Bertling said in a presentation to journalists ahead of the Paris Air Show, which starts next week.

That "brutal impact" has been followed in 2009 by dwindling orders from public operators as governments slash spending due to falling tax revenue and oil producing countries reacted to the drop in the price of oil.

On the other hand, some governments, wary of social tensions arising from weak economies and rising unemployment, are investimg more in equipment for border protection and policing.

"In 2010, if the economy doesn't recover, we expect to see an impact on the military side of the business," as governments slash defense budgets, Bertling said.

Eurocopter doesn't expect any impact on the company's orders in value terms in 2009, even though unit orders may decline, "but clearly this creates concerns for 2010 and 2011," he said.

"2010 will be a difficult year for Eurocopter, but we are entering this tunnel [while] seeing bright sun at the end of the tunnel" with a likely upturn in the economy, Bertling said.

Bertling predicted a move toward consolidation in the helicopter industry, with new entrants from Russia, China, India and possibly Korea muscling in on manufacturers in the developed countries starting in 2015.

Commenting on rumors that Textron Inc's (TXT) Bell Helicopter unit might come on the market, Bertling said "I'm excluding nothing, but we are not at all active in this direction at this point." He observed that a Eurocopter move on Bell would likely run afoul of anti-trust concerns, as the two companies combined would control up to 90% of some U.S. helicopter markets, notably that for emergency and medical services.

-By Stefania Bianchi, Nathalie Boschet and David Pearson, Dow Jones Newswires; [phone], [e-mail]