The market for military-related unmanned aerial vehicles (UAV) is expected to grow on average 9 percent annually, or up to $11.6 billion, during the next 10 years, outpacing the defense industry average, according to a new report on the aerospace and defense (A&D) industry that said it won’t be long before unmanned aircraft overtake manned aircraft on very type of mission.
The military market for UAVs is currently dominated by the United States and a “new more liberal U.S. export policy will put further pressure on European [UAV] programs,” the global business advisory firm AlixPartners said in its study, AlixPartners Global Aerospace & Defense Industry Outlook 2015. It added that the importance of support from the domestic governments is critical for a successful export program as evidenced by U.S. backing for the F-35 Joint Strike Fighter and France’s Rafale.
The study said it is critical for aircraft manufacturers to have a role in UAVs.
“UAVs’ presence is a must for today’s aircraft OEMs (original equipment manufacturers), as increasing maturity of the technologies and mission-scope coverage will help UAVs gradually take over manned aircraft missions, starting with intelligence, surveillance and reconnaissance—already well-advanced—but expanding to strike, refueling, combat, search & rescue,” the study said.
The report ranks the maturity of UAVs in carrying out intelligence, surveillance and reconnaissance (ISR), and strike missions mission categories as very high and high, respectively. It said in the ISR arena UAVs have widely replaced manned aircraft and that for strike missions UAVs developed for reconnaissance have been modified with strike missile systems, adding that the Air National Guard in New York has already stood up the first all-UAV attack squadron consisting of Reaper drones. The Reaper is made by General Atomics.
In the areas of resupply and refueling, the report respectively ranks UAV maturity as medium, with initial operations underway since 2011, and medium to low, with the first flight-tests just beginning with the April flight of an X-47B drone conducting air-to-air refueling in the receiver role.
Combat search and rescue and air combat use of UAVs are in the early stages of research, AlixPartners said.
Although global defense spending is down nearly 2 percent since 2011 defense contractors generated on average 11 percent profit margins in 2014, helped by ongoing workforce reductions, the report said. Defense companies need to do more than diversify geographically to overcome budget cuts but “must innovate to position themselves in new markets and user their assets to serve all A&D sectors,” it said.
UAVs and cyber security are two areas of growth for companies to target, the report said.