On-board hydraulic systems are tasked to provide a number of critical functions to ensure the in-flight operability of rotary-wings vehicles; the hydraulic plant is required to supply power to the flight control actuators and utilities, as well as condition the hydraulic fluid, under a wide range of possible in-service conditions. Being a flight-critical system, the definition of a Prognostics and Health Management framework would provide significant advantages to the users, such as better risk mitigation, improved availability and a reduction in the occurrences of unpredicted failures which still represent one of the more known downsides of helicopters. A preliminary analysis on the effects of the inception and progression of several degradation types is the first step towards assessing if such PHM system is feasible, and which failure modes are more likely to be observed. Moreover, since several key components are frequently provided by different suppliers to the airframer, this preliminary analysis would allow to better assess if an Integrated Vehicle Health Management approach, integrating signals coming from different components, could be beneficial. To pursue this study, a complete model of the hydraulic system for a fly-by-wire helicopter has been prepared. Then, an in-depth simulation campaign was pursued with the aim of studying the interactions between different failure modes, the effects that the propagating degradations have on the system performances and which signals can be used to define a robust set of features. The paper introduces the case-study under analysis, a general configuration for fly-by-wire helicopters, presenting the most prominent peculiarities of the system and the effect of such peculiarities on the definition of health monitoring schemes. The model is then used to describe the behavior of the system under nominal and degraded conditions is introduced. Between the possible failure modes, the interaction between wear in several mechanical components and the occlusion of the hydraulic lines filters was chosen as the subject of this study; motivations are provided and the degradation model described in detail. Hence, results of a wide-ranging simulation campaign are presented, where the time-domain response of the system is used to guide in the definition of a proper set of features able to characterize the selected fault cases. Selected features are presented, chosen according to significant metrics such as correlation with the simulated degradations, signal-to-noise ratio and accuracy. Two different approaches with a varying degree of integration between system signals are proposed and compared. Prognostics is then pursued through well-known particle filter algorithms. The analysis provides promising results on the capability of successfully detecting, isolating and identifying the selected fault mode; laying the foundations for further and more comprehensive studies on the subject.