UNITED STATES - 6 APRIL 2011 ARLINGTON, Va. -- The U.S. Army has begun construction on the first fuselage of its next-generation AH-64 Block III Apache helicopter. The new attack helicopter will be built with a stronger engine, improved avionics, better computer networking capability and increased maneuverability when compared with current models, service officials said. The first Block III aircraft will roll off the production line this fall, said Lt. Col. Dan Bailey, product manager for the program. The first two aircraft will be used for developmental purposes, and the next five after that will be used to train the first unit equipped, he said. The Apache Block III aircraft will begin to be fielded with units by the end of 2012, Bailey said. Overall, the Army plans to acquire 690 Block III Apaches between now and 2026 at a production rate of roughly two battalions per year, beginning in fiscal year 2013. Of this amount, 643 will be re-manufactured aircraft and 56 will be "new builds," Bailey explained. As part of its preparation of the Block III Apache, the program completed a "logistics demonstration" in March designed to show that the aircraft will be maintainable once fielded. The demonstration checked on the avionics, wiring, gear boxes, cockpit seat and electronics, among other things. "We walked through all of these tasks to find the issues and things that needed to be fixed. This demonstrates that the aircraft will be sustainable and maintainable in the future, thus easing the burden on the warfighter," Bailey said. "We thought we would need a full three months for this, but we finished three weeks early and found that only two percent of the overall tasks needed refinement." The Block III Apache features a 701D engine, composite rotor blades, improved networking and communications avionics, and an Improved Drive System of the 21st Century -- known as IDS-21 -- Face Gear Transmission. "The new 701D engine has a significant increase in reliability based on new coating, new metal and increased airflow which allows it to operate at higher temperatures," Bailey said.