By Andrea Shalal
BERLIN (Reuters) - The U.S. military has approved Lockheed Martin Corp's (N:LMT) new CH-53K heavy-lift helicopter to fly at the Berlin air show next April, according to two sources familiar with the program.
It will mark the CH-53K's international debut at time when a German helicopter competition could start heating up again.
The German defense ministry is nearing the kickoff of a competition valued at nearly 4 billion euros ($4.7 billion) between two U.S. helicopters - Lockheed's massive Sikorsky CH-53K and the smaller Boeing Co (N:BA) CH-47 twin-rotor helicopter.
A formal decision on how to structure the competition has stalled as Chancellor Angela Merkel's conservatives try to forge a ruling coalition with the pro-business Free Democrats and the Greens, an endeavor that could take until the end of the year.
Military sources expect the program to proceed only after a new government is in place, but say it could be delayed further if the current defense minister, Ursula von der Leyen, is replaced. Any successor would want to review major weapons programs like the heavy-lift helicopter.
Europe's Airbus (PA:AIR) is also challenging the ministry's plans, arguing that German firms should get a big share of the maintenance and management of the project.
The ministry has pushed back, saying it would be too unwieldy to award separate contracts for production and sustainment of the planes.
Bringing the CH-53K helicopter to Berlin will allow military officials to compare the two aircraft on site.
Two Boeing CH-47 helicopters were brought to a conference in Germany in July, but the Lockheed aircraft, just entering production for the Marine Corps, was not on site.
Eight other NATO countries already use the CH-47 Chinook, while Germany currently flies the CH-53G, an older version of the CH-53K that Lockheed will offer.
Some German military officials favor the CH-47 which they say is combat-proven and cheaper, but others say the larger CH-53K would allow growth in future missions.
The U.S. Marine Corps expect to declare the CH-53K ready for combat use in 2019. They have said the average cost of the huge aircraft will be around $88 million a copy. The cost could drop somewhat if Germany, Israel and Japan also buy the planes.
Experts say it would cost less to buy the Chinook, but it will require several upgrades in coming years that could add cost. It also carries less, so it takes more flights to accomplish the same mission.
Beth Parcella, in charge of Lockheed's drive to win the German contract for the CH-53K, told Reuters she thought the helicopter still had good chances in the German competition.
"The price differential is not going to be anywhere as significant as it's being portrayed," she said. "It's a larger, heavier aircraft, so it's going to cost more. But it's going to be a lot closer than people think."
She said the new aircraft would also cost far less to service given its on-board diagnostic system.
