Bell Sets a New Course

Dan Reed 2018 Spring

For a company focused on multimillion-dollar aircraft sales to government, military, and commercial clients around the world, Bell was behaving curiously. Its big reveal at HAI HELI‑EXPO 2017, the FCX-001, was less aircraft than a customer-experience concept vehicle. Bell followed up that mold-breaking exhibition by becoming the first aircraft company to ever make a big splash at the annual, quirky, and hip display of cutting-edge consumer technology that is the Consumer Electronics Show in Las Vegas.

There (and at HAI HELI‑EXPO 2018), Bell displayed a cabin mock-up of its proposed entry in the race to develop the world’s first commercially successful air taxi. And though that mock-up looked more like a smallish, more angular, and cooler version of a passenger cabin in one of Bell’s helicopters, the company assured everyone that the vehicle will be a very, very different kind of machine, one powered by hybrid electric engines and capable of operating quietly, quickly, and in an environmentally friendly way within urban environments.

What next? On February 22, the company announced its first name change since 1960, when Textron Inc. acquired the Bell Helicopter division of Bell Aircraft — evolving from Bell Helicopter to simply, “Bell.” Of course, some — maybe even most — rebranding is merely cosmetic. But for Bell, shedding the one word that has defined not only its products but its very essence for the last 60 years is game changing.

Bell has widened its manufacturing focus from helicopters to a variety of aircraft, including the V-280 Valor tiltrotor, shown here during its first flight.

Bell Photo

Beyond Helicopters

Very few people alive today remember when the Bell name was not automatically followed by the word “helicopter.” Its pioneering Model 47, which the US Army flew under the name H-13 Sioux throughout the Korean War, was the first helicopter ever certificated for civilian use. It later became even more famous via the opening credits of the TV show M*A*S*H. Then the Bell UH-1 Iroquois (better known as the “Huey”) became the icon of the Vietnam War, in part because of its ubiquitous presence in TV news reports, documentaries, and movies about the American experience in Vietnam.

Now the Fort Worth–based company isn’t so much turning its back on the helicopter as it is opening the door to a variety of new aviation concepts outside the technological envelope to which the helicopter has limited it all these years.

Just as importantly from a business perspective, under still–relatively new CEO Mitch Snyder, Bell is searching for a potentially immense new vein of sales that someday could decouple the company’s business performance from the volatile offshore oil production industry — and from the even iffier US Department of Defense (DOD) procurement cycles.

“We’ve been working hard for several years now to turn …,” says Bob Hastings, Bell’s executive vice president for communications and government affairs and chief of staff, catching himself before completing the sentence with the word “around.” From Bell’s perspective, the company isn’t working on a turnaround so much as it is creating a new future.

“If you look backwards in our history, going all the way back to our founder, Larry Bell, Bell Aircraft was very much an innovating company that was involved in most of the major milestones in aviation, from early jet aircraft designs for the US military and Chuck Yeager flying the Bell X-1 through the sound barrier for the first time, to key technologies and engines used in the X-15 and Mercury programs, to the jet packs that James Bond flew in the movies.

“But we sort of settled in the 1960s into being a helicopter company. And we were a very good helicopter company and have been for a very long time,” Hastings says. “Now we are moving beyond being only a helicopter company.

“In fact, we already make more than helicopters. We’ve been producing tiltrotor aircraft for many years now. But we want to be able to move in any direction going forward. We will stay in the helicopter business, but we’re focusing on the future of vertical-lift flight beyond helicopters. In particular we’re looking in three areas right now: air taxi, on-demand air mobility, and autonomous pod transport,” Hastings says.

Of course, changing the future of a conservative-by-nature defense contractor and aircraft maker does not happen quickly, or easily. During the last decade, while Bell churned out close to 400 V-22 Ospreys for the military and hundreds of conventional helicopters for the inherently hot-and-cold — but mostly tepid — commercial market, the company has invested in new engineering and test facilities, new manufacturing capabilities and, most importantly, new thinking.

Before being named CEO in 2015, Snyder led the V-22 program. But quickly after assuming the top job, he began the process of creating a new vision for Bell. This has included laying out new, forward-looking values and workforce development policies and pushing those down through the organization’s manufacturing plants in Texas and Quebec. And while the company has been trying to change its culture, it’s also in the midst of defining new business plans for both the short and long term.
 

Bell’s vision is to become the high-volume manufacturer of a totally new type of aircraft, the air taxi.

Bell Photo

A Crowd of Innovators

Bell is not the only helicopter maker currently trying to map a new future. Sikorsky was sold three years ago to Lockheed Martin by longtime parent United Technologies in a deal that took off some of the shackles limiting the Connecticut-based company’s ability to attack the future vertical-lift aviation market.

With Lockheed’s strong support, Sikorsky is pitching its S-97 Raider, a high-speed compound helicopter design, as the basis for the US military’s next family of vertical-lift aircraft. The S-97 design, which is going head-to-head in the DOD competition against Bell’s V-280 Valor third-generation tiltrotor design, also points to new capabilities and future technical developments that will push beyond the historical envelope of the basic helicopter.

Similarly, Eurocopter signaled a major change with its name change to Airbus Helicopters in January 2014. Though the company remains focused on helicopters, taking on the Airbus brand name signaled its intent to compete globally in the vertical-lift market even as it pushes new, unconventional, and advanced designs like the X3 high-speed compound helicopter. At the same time, Airbus engineers are working on designs that, if brought to market, would compete in the nascent urban air-taxi market.

Meanwhile, a number of new aviation companies, many with financial backing from tech industry titans like Google co-founder Larry Page, are working on designs that would compete in the commercial vertical lift/urban air taxi/autonomous air-vehicle markets that Uber and others are promoting. In mid-March, Page’s Kitty Hawk advanced design company unveiled its proposed air taxi, called Cora. It features a small, four-place cockpit and wings fitted with 12 small electric-lift fans that would get the aircraft off the ground, plus a pusher prop in the back that would turn it into a more-or-less conventional airplane.

Other entries in the race to create functional air taxis or “flying cars” include the Dutch Pal-V Liberty, the Slovak AeroMobil 3.0, the long-promised and MIT-designed Terrafugia Transition (now being funded by Chinese investors), and a proposed new vehicle from startup Zee.Aero (also backed by Page).

Bell's competition in the air taxi market includes, from left, the Terrafugia Transition, the PAL-V Liberty flying car, and the AeroMobil 3.0.

Bell Photo

Bell's Vision

Bell’s strategy, however, goes beyond simply producing a flashy flying car. The company’s aim is to be a successful, relatively high-volume manufacturer of such aircraft.

“Look, we’re not going to be the first to build an air taxi,” Hastings says. “But we do believe we can be the first in developing a manufacturable, certifiable and, most importantly, profitable air-taxi-type vehicle. And we think that probably will come sometime in the mid-’20s.”

That time frame, he says, will allow the FAA to figure out both how it will manage air traffic in the low-level urban flying environments where such vehicles presumably will spend most of their time, and how to certify these newfangled aircraft and their pilots (though eventually most such vehicles are envisioned as operating autonomously).

Certification promises to be a slow process because, quite literally, no one at the FAA or anywhere else has ever determined what the certification criteria should be, what the manufacturing and materials requirements should be, or even when and where such aircraft can and cannot be flown. In a way, it’ll be like going back to the 1920s and 1930s, when the first aviation regulators had to set the rules for airplanes, often through trial and error. Or in the 1940s and 1950s when they first determined what rules would govern the manufacture and operation of the early civil helicopters.

“We don’t think ‘air taxi’ is going to be a helicopter,” Hastings says. “It’ll be an advanced vertical design, but to operate in that environment you’ve got to reduce the noise, which means the elimination of the tail rotor and using some other means of stabilization. It’ll probably need a different kind of propulsion because the turbine engine is noisy, too. And it’ll need new, lighter materials.”

Beyond that, Bell is banking on its long history as an actual maker of aircraft to set it apart from the start-ups that not only must design, build, and certify new designs but also find a place to build factories and invent the machinery and tooling to build them — all in the complex, demanding industry of aircraft manufacturing, a field to which many of these companies are new. Such a task promises to be both hugely expensive and slow, a combination that does not bode well for making profits.

The path to profitability for new products at Bell will depend on the business case for each, Hastings says. “Uber will tell you there’ll be thousands of air taxis flying relatively soon,” he says. “If you buy that, you’ve got to get the price [for one such vehicle] down into the hundreds-of-thousands-of-dollars range — which is not out of the question if you can build them by the thousands.”

A slower buildup in the market or a more limited market overall would, of course, push the price of such vehicles higher. But Bell, Hastings says, will have to keep the price low, well below the $1 million threshold that has been a theoretical floor for all but the smallest of helicopters. “Whatever the price, they’ve got to be significantly cheaper than helicopters today,” he says.

But Bell is looking to compete in more than just the urban air-taxi market. “On-demand air mobility is the headline term for a new range of aircraft that can move products and people from Point A to Point B in the vertical dimension, but with the difference being in the propulsion systems,” Hastings says. That eventually could mean developing different types of propulsion systems, whether it’s lightweight-but-powerful battery-driven electric fans or very small-but-quiet conventional engines, as well as hybrid power that switches from more powerful combustion or even jet engines for heavy work to quiet electrics for flying in very low-level or noise-sensitive environments.

“And what we call autonomous pod transport would be something like a tail-sitter that takes off vertically, flips horizontally for flight like a biplane, and then lands vertically — but not a tiltrotor — and it would be done autonomously, without human pilots onboard,” he says.

Among other designs Bell is exploring is a circular-wing vehicle that features multiple electric-lift fans for vertical takeoff and landing, with the capability of the whole vehicle flipping on its end to fly forward, using the fans for propulsion and the circular wing for lift.

“We are looking at the logistics aspect of how new vertical-lift aircraft would be operated and how they can be put to the most effective and profitable use,” Hastings adds.

“We don’t necessarily believe that one day you’ll order a pizza and have it delivered by a drone,” he says. “But with something like what we’re looking at in terms of autonomous pod transports, you could move 5,000 pounds from one side of town to the other side of town to support local logistics and delivery operations. Or the military could move 50,000 rounds of ammunition from a forward supply base to the front lines without exposing a helicopter and its crew to enemy fire.”

Bell Still Makes Helicopters

With the US Army’s recent retirement of the OH-58 Kiowa, Bell no longer has any conventional helicopters flying with that service, while the Marines continue to operate Hueys and AH-1 Cobra attack helicopters. But the company is not giving up on either conventional helicopters or on the military aviation market.

Bell continues to produce several commercial models, and production is ramping up on its new five-place Bell 505 Jet Ranger X model, certificated just last summer. After a lengthy delay following the July 2016 crash of the first test model of the 525 Relentless, Bell recently restarted certification testing of the new 19-place design with the FAA. It hopes to be delivering the first models to customers in 2019, in time, ideally, to get in on the current uptick in the offshore energy business for which the 525 primarily is designed.

Meanwhile Bell is competing aggressively in the US DOD’s search for the next family of military vertical-lift aircraft. Its V-280 Valor tiltrotor appears, for now, to be ahead of the competition to replace the US Army’s fleet of Sikorsky Black Hawks and its variants in the other services. And the V-280 design could be scaled up or down to meet other military needs for heavy lift, attack, and even light scout vertical-lift aircraft.

“The Army has made its Future Vertical Lift program its No. 3 modernization priority,” Hastings says. “And within Army aviation it’s the No. 1 priority, so we see a lot of opportunity there and a lot of momentum building.”
But make no mistake about it, while helicopters — and tiltrotors — will continue to be the primary drivers of Bell revenues for the next decade or so, the company is seeking a path to major revenue growth through its new focus on future vertical-lift aircraft.

Textron is a $14.2 billion conglomerate that also owns the Beechcraft, Cessna, and Hawker aviation brands; Lycoming engines; various other military hardware and technology support companies; an industrial finance company; plus a handful of manufacturers of consumer products such as E-Z-GO golf carts, Cushman utility vehicles, and Jacobson lawn care machines. But Bell continues to be Textron’s single largest revenue producer.

Last year, Bell by itself brought in 23 percent of Textron’s revenues. Yet Bell’s revenues have been rather stagnant in recent years as military sales wound down and the depressed offshore sector led to soft commercial helicopter sales. Last year Bell reported revenues of $3.3 billion, up a tick from $3.2 billion in 2016, but down 4.7 percent from 2015.

Bell officials see unconventional future vertical-lift vehicles that can be manufactured and sold in large numbers as the route to a dramatic boost in revenues. At least so far, Textron officials appear content to keep on funding the research and development work on such vehicles in expectation of a big payoff in the mid to long term, based on potential high-volume sales of such aircraft. 

In short, while Bell and Textron are in no way ready to walk away from their strong, but barely growing position in the global helicopter business, they are betting heavily on a new technology-driven future in the vertical-lift world. 

About That New Logo

Bell’s new logo strongly implies that the company is taking a new direction. The striking new logo has three elements:

  • The name “Bell,” which was included in the logo because the company is a long-respected builder and servicer of aircraft
  • The shield shape of the logo, which represents the sought-after qualities of dependability, ruggedness, and safety
  • A dragonfly, to signify the mastery of flight in all aspects.

It’s the inclusion of the dragonfly element that stands out. And if that’s a bit of head-scratcher for you, you’re not alone. Bell officials know it’ll take a while for everyone to understand the imagery. Still, they are happy to have this agile flyer represent them.

“Dragonflies are masters of flight,” Hastings says. “They do all the things we’d like our products to do. So, for us, the dragonfly represents an unlimited future. When your kids see dragonflies, they stop and watch them in fascination. Your kids squash bugs or flick them away, but they stop and watch dragonflies. They’re fascinating and versatile.”

Adult dragonflies are, however, short-lived creatures, surviving no more than seven months from the time they emerge from their larvae form. But Hastings is quick to counter any suggestion that Bell’s use of the dragonfly symbol could be a bad omen for the storied helicopter maker.

“Dragonflies have been on the face of the earth for 300 million years and constantly change and adapt to the environment,” he says. “That’s what we’re doing, adapting to a new environment, and we intend to survive for a very long time.”

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