Brazilian Hermes 450 UAV
The U.S. military may be the most high-profile owner and operator of unmanned aircraft, but it is far from the only customer of the controversial vehicles.
There is no continent on earth, save Antarctica, that is not home to a country that builds or is desperately seeking to buy unmanned aerial vehicles, spurred by the much-publicized success of their use in Iraq and Afghanistan.
There are already 4,000 different unmanned aircraft platforms in circulation on the global market.
There are concerns about that level of proliferation, primarily because UAVs can be used for lethal purposes. But only sophisticated models like the Global Hawk and Predator drones, over which the U.S. military and industry holds a virtual monopoly, are capable of such feats. The majority of remotely piloted aircraft will be smaller and perform intelligence, surveillance and reconnaissance missions, analysts agree.
UAVs have been in service for several decades, but they exploded on the scene over the past decade because of their high-profile use by the U.S. military in Iraq and Afghanistan. In the last five years, demand for unmanned aircraft worldwide has grown by double digits annually with U.S. customers, accounting for two-thirds of the market, said Derrick Maple, principal analyst at IHS Industry Research and Analysis.
Such rapid growth is typical of an economic bubble, especially one on the cusp of bursting, Maple said. But international demand for UAVs will more than offset a downturn in military spending until the U.S. domestic market for unmanned systems grows to fill the gap.
“Typical of a market at this state of its life cycle, this high level of growth is not sustainable, especially as these [U.S. military] campaigns undergo a drawdown,” Maple said at the Association for Unmanned Systems International’s annual program review in March. “However, expanding worldwide opportunities are forecast to offset the reduction and support a growing market over the next 10 years.”
The U.S. unmanned systems market will shrink over the next five years but will eventually regenerate, perhaps expanding beyond its current size, Maple said. Still, the United States will remain the largest customer for UAVs, holding on to 45 percent of the global market. The Air Force’s requirements for high- and medium-altitude platforms will account for half of U.S. demand, Maple said.
Global defense spending on robotics is expected to exceed $13.4 billion at the end of 2013. Department of Defense spending on unmanned systems accounts for nearly half of that figure, at $6.5 billion. North America, Europe and Asia are the largest markets for unmanned systems, particularly aircraft.
Aircraft account for almost 90 percent of total defense spending on unmanned systems, dwarfing both ground and maritime systems, according to an AUVSI study. The global outlay in 2013 for UAVs will top $11 billion, with ground and maritime systems splitting the remaining $2.4 billion.
Fast on the heels of the military market is a nascent commercial industry that is on the verge of a growth spurt.
“As commercial mobile robot use continues to grow, defense spending will increase as commercial systems drive capability, reliability and price points,” Maple said. “Specifically for UAS, as legislation barriers gain definition over the next several years, commercial spending will exceed defense spending. Countries that delay airspace integration will lag in technology development, manufacturing, job development and economic stimulus, and will have to rely on imports.”
As with other military aircraft, a downturn in U.S. defense spending has pushed UAV manufacturers to court foreign customers. International air and military expositions are taking notice.
“Concerning sequestration, it has pushed exhibitors to export and increase their participation … as the national defense budget is decreasing,” said Gilles Fournier, managing director of the Paris Air Show.
Emeric D’Arcimoles, CEO of the PAS, listed declining global defense budgets as one of the reasons that the 2013 show booked up in record time, alongside a 4-percent to 5-percent year-over-year growth in the international aviation industry.
“Due to the decreasing of the military budget of the different countries for the exportation of their own production, [aircraft manufacturers] see they have to go to the international playing field more aggressively.”
Demand for UAVs has been just as noticeable at the Paris International Air Show, one of the world’s largest industry expositions. U.S. and Israeli companies in particular have ramped up their UAV marketing to international customers in recent years.
“Over the last few years, we have seen [the UAV industry] go from being this fledgling group to being a large, regular component,” said Tom Kallman, president and CEO of Kallman Worldwide, which organizes international trade shows.
The U.S. Federal Aviation Administration’s French counterpart, the Directorate General for Civil Aviation, is undergoing an assessment similar to the FAA’s of integrating unmanned systems into the country’s civil airspace. When the authorization is given, Fournier said the industry is poised for explosive growth.
“The main question at our air show will be in the next few years [how] to make them fly safely,” Fournier said at a recent pre-show press conference in Washington, D.C. “For the moment, we are not ready, but this industry is growing up very fast.”
Growth in UAV manufacturing and procurement is not limited to the West. China’s commitment to unmanned systems in terms of volume is larger even than the United States. The demand for industrial robots is estimated to hit 32,000 units by 2014, making it the world’s largest consumer of robotics technology, Maple said. Chinese officials have plans to launch unmanned aircraft in 11 provinces to survey and patrol the nation’s coastal borders. The Chinese army is in the process of fielding 100 vertical takeoff and landing UAVs.
“China has ramped up unmanned systems development faster than any other nation and threatens to surpass the West in technology and capability,” Maple said. “China has been operating UAVs for information security missions for some years now.
The future holds more armed capability and export potential.”
U.S. allies Japan and South Korea have expressed need for several UAV designs, especially in the context of the bellicose rhetoric being spewed in recent weeks by their common enemy North Korea. Both are in the market for medium- and high-altitude platforms. South Korea also has its eye on high-altitude aerostats specifically for monitoring the border with its northern neighbor.
Though it is unlikely the isolated nation could develop or procure such aircraft, even North Korea has expressed a desire for a medium tactical UAS and one that can carry bombs.
For the first time in its history, the International Defense Exposition in Abu Dhabi, United Arab Emirates, dedicated an entire exhibition hall to unmanned systems during the show in February.
Between 2012 and 2021, the unmanned aerial vehicle market for the Middle East is valued at $1 billion, according to information provided at IDEX.
Israel has long dominated UAV production in the Middle East, though demand is rapidly expanding in the region. Leading that growth are Saudi Arabia, Egypt, Iraq and the UAE, according to IDEX officials.
General Atomics Aeronautical Systems displayed at IDEX the Predator XP, an unarmed export version of its Predator UAV. The aircraft has an automatic takeoff and landing capability and carries a Lynx multimode radar for maritime use.
On the first day of IDEX 2013, General Atomics announced a $197 million deal to provide the XP to the UAE Armed Forces General Headquarters.
Boeing-Insitu announced a similar teaming agreement with Abu Dhabi Autonomous Systems Investments for that company to provide training, support and marketing for the ScanEagle and Integrator unmanned aircraft. The deal could expand into the Middle East and North Africa.
The deployment of unmanned aircraft in the Middle East, as elsewhere, expands as tensions escalate, Maple said. Both sides of the powder keg have developed indigenous UAS manufacturing capabilities, Maple said.
While Israel is a world leader in production, use and export of UAVs, Iran has an equally strong commitment to developing a peer capability. Iran has at least two tactical UAS designs in service: a medium-altitude capability and the Hassem multi-mission unmanned vehicle.
Meanwhile the United States continues to sell unarmed unmanned surveillance aircraft to the Iraqi navy for protection of oil exports.
In South Asia, India and Pakistan are facing off in a UAV arms race of sorts. India has traditionally leaned on Israel for its supply of UAVs, Maple said, but has recently ramped up development of indigenous manufacturing. It now has a functioning medium-altitude, long-endurance UAV, with several other programs in the pipeline.
To the northwest, Pakistan — whose soil is so frequently the setting for U.S. drone strikes on Islamist extremists — is seeking medium-altitude and tactical UAS and may have partnered with China to develop those capabilities, Maple said.
In the United States, General Atomics — makers of Gray Eagle, Predator and Reaper drones — and Northrop Grumman, which builds the Global Hawk and Fire Scout, dominate half the UAS market. Other manufacturers that clock in with major U.S. and foreign contracts are Boeing and AAI Textron, which builds the Shadow UAV.
Border security and the proliferation of organized crime and drug trafficking are driving demand for UAVs in North and South America.
Canada is in the market for medium- and high-altitude, long-endurance unmanned systems for its air force and navy. Brazil and several other South American countries have expressed similar needs, Maple said. Brazil has purchased several Hermes 450 UAVs, built by Elbit Systems, for use by its army and navy.
Canada is also in the market for UAVs that can patrol the increasingly open Arctic, where its natural boundary of sea ice is receding annually. It is developing the Polar Hawk, a version of the Global Hawk that can withstand harsh Arctic environments to provide long-endurance, high-altitude surveillance there.
Argentina and Bolivia are mulling using UAVs to fight drug traffickers, as are U.S. Air Force and Navy officials whose job it is to interdict those drugs on their way north. The Mexican military wants mini and tactical UAVs for its navy and for use in homeland security missions. Venezuela intends to purchase unmanned aircraft to patrol its borders and for environmental monitoring.
Across the Atlantic, strong demand also exists in Europe and Africa. Analysts predict that within the European Union, integrated UAV development and production efforts could eventually contend with the U.S. and Israel.
“I could definitely see wider UAS collaboration among France, Germany, Italy and the [United Kingdom],” Maple said. “Because duplication of production makes no sense.”
NATO already has plans to purchase four Global Hawk Block 40s. Russia dominates the Eastern European market, accounting for three-quarters of demand there. It is also in talks with Israel regarding technical and developmental cooperation for UAVs across all operations environments, Maple said. Russian defense giant Sukhoi is developing UAVs with strike and reconnaissance capabilities.
Nearby Poland and Turkey also have expansive desires for UAV technologies, particularly medium-altitude, high-endurance models.
The only nation in Africa with UAV manufacturing capabilities is South Africa, which builds and operates both tactical and handheld UAVs. Kenya in 2012 received its first Raven unmanned aircraft.
But the entire continent is a hotbed of opportunity for UAVs used in border patrol and ISR missions as well as anti-terrorism activities in countries like Mali, said Maple.
Ten years from now, at least one quarter of global UAV demand will come from outside the United States, which should be a hopeful statistic for companies who have catered primarily to the US. military.
“This [international market] is likely to grow,” Maple said. “Despite defense cutbacks, there is growth out there for suppliers. All unmanned markets are in the very early stages … but there is strong commitment to their future operations and integration.” Photo Credit: Brazilian Air Force, General Atomics Aeronautical Systems