Global defence spending fell by 0.4% in 2014, according to the Stockholm International Peace Research Institute (SIPRI). Nevertheless, according to HIS Jane’s, military expenditures on unmanned aerial vehicles (UAVs) has grown and is now valued at $6.4 billion.
This is likely to boom over the next decade, with a 5.5% annual growth and a global market worth $10 billion by 2024. According to IHS Jane’s principal analyst Derrick Maple, UAVs are “well established, combat proven and are an essential and expanding element of future operations across the globe.” Indeed, according to SIPRI, 439 UAVs were recorded in its arms transfer database from 2010 to 2014, compared to 322 between 2005 and 2009. However, armed UAVs only accounted for 11 out of 439 arms transfers in 2010-2014, and only represented 0.3% of total major arms trade.
In a time of budget constraints and cut costs, they have the substantial advantage of saving money and not physically exposing human pilots to combat situations, thus reducing political risks. Maple firmly believes that mixed fleets of both manned and unmanned platforms will rule the skies for decades to come.
Surprisingly, according to the SIPRI, the world’s biggest exporter of UAVs from 2010 to 2014 was not the USA, with 132 units delivered across the globe, but Israel, with 165 units exported through firms like Israel Aerospace Industries and Elbit Systems.
Italy came third with 37 units. But the U.S. may catch up and overtake Israel in the near future thanks to the General Atomics (GA) Predator series and Northrop Grumman Global Hawk. Maple even thinks the USA will keep the lead for the next five years at least. HIS Jane’s mentions that Spain has just ordered “5 of U.S.-based General Atomics’ MQ-9 Reaper UAV aircraft, at a cost of $243 million. This order follows a big French buy of 16 such Reapers from GA – a $1.5 billion contract announced in 2013. Powered by Honeywell turboprop engines and equipped with Raytheon’s AN/DAS-1 Multi-Spectral Targeting Systems.”
GA specialises in Reaper UAVs, in the medium-altitude, long-endurance UAV market. Northrop Grumman (NG) is in contrast “the king of the stratosphere with its high-altitude, long endurance Global Hawk.” NG is also currently developing the MQ-4 Triton, for Australia inter alia, at an estimated cost of $123 million, one of the most expensive and ambitious UAVs programmes (it should be capable of staying aloft for 24 hours without refuelling).
In Asian countries such as China, India, Japan South Korea, as well as Russia, HIS Jane’s forecasts sales will reach $3.4 billion in the next ten years. Russia seems a little late on that field, compared to others, but Derrick Maple is confident that the requirement and the technological capabilities are still there, even though budgetary resources have not been sufficient lately. But, in light of Russian involvement in Syria, priorities may change.
In Western Europe, sales should reach $1.3 billion. But these areas, especially Western Europe, are willing to reduce their US and Israeli reliance on UAV imports. That is the main rationale for two major European programmes, namely FCAS-DP and MALE2020, which according to Maple will take time to mature, but are here to stay and will certainly have an export potential in the future, most probably as part of a global “package proposition” to foreign customers.
35 different countries imported UAVs in the 2010-2014 period, compared to 26 countries from 2005 to 2009. The UK represented a third of global deliveries, followed by India with 13% and Italy with 10%. For Derrick Maple, in spite of the USA and Israel’s solid leading position, the marketplace will definitely become more open and competitive in the longer-term as new players emerge.
However, according to Rich Smith from The Motley Fool, the big question concerns the future development of air-to-air combat UAVs. Indeed, as Huw Williams, unmanned systems editor for IHS Jane’s puts it: “Operators are now moving to expand their mission sets beyond visual surveillance and reconnaissance, and are introducing sophisticated intelligence and electronic warfare systems, as well as a wider range of munitions”. The 4 Israeli and American firms previously evoked have already begun to work on the topic, and so have Airbus, BAE Systems, Selex, Thales and other players in Europe.
For his part, Smith recommends to put your money on Northrop Grumman thanks to the success of its X-47B carrier capable UCLASS UAV, “UCLASS” standing for Unmanned Carrier-Launched Airborne Surveillance and Strike. And more prosaically, NG is a public traded company,unlike GA, so investors can earn money on it. What the UCLASS programme will ultimately look like remains uncertain though, but this cutting-edge capability is definitely on the US Navy shopping list, something GA-ASI, Boeing, Northrop Grumman and Lockheed Martin have clearly in mind.
Written by ADIT – The Bulletin and republished with permission.