Beginning in 1938, the pair headed development of the new helicopter and the initial model became a six passenger transport powered by BMW equipment known as the Fa 226 "Hornisse" ("Hornet"). This aircraft was ordered by Lufthansa for commercial service and garnered the interest of the German military to become the Fa 223 "Drasche" ("Dragon"). A series of "V" designated prototypes then followed with the first completed by the Fall of 1939 to open the critical testing phase. However, continuing development problems ensured that a first flight was not recorded until August of 1940. The helicopter proved a promising design when it reached a speed of 113 miles per hour and an altitude of 23,300 feet in testing.
In its finalized form, the Fa 223 held an unconventional arrangement by helicopter standards of today. It utilized a teardrop shaped fuselage which was heavily glazed at the nose and tapered towards the tail. A tricycle wheeled undercarriage was fitted - which seemed like a modern quality - though the legs were fixed under the main forward mass of the aircraft. The rotors were held outboard along a tube work assembly with a single engine (held in the fuselage) driving the three-bladed rotor assemblies by way of shafts. The empennage included a single vertical tail fin capped by a high-mounted horizontal plane. BMW supplied the engine (a BMW "Bramo" 323D) and gearbox for the helicopter, as it did for the previous Fw 61 design. Despite the inclusion of the engine within the body of the aircraft, room was reserved for a cargo hold as well as for the cockpit, fuel stores, and equipment.
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