Inside Unmanned Systems

APR-MAY 2018

Inside Unmanned Systems provides actionable business intelligence to decision-makers and influencers operating within the global UAS community. Features include analysis of key technologies, policy/regulatory developments and new product design.

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AIR DEFENSE 52 April/May 2018 unmanned systems inside like to arm them with Hellfires (Hellfire missiles) just like the U.S. ones are.' It took years and years and years." "A change in U.S. policy on the export of large (i.e. MTCR Category I) UAS will greatly enhance America's ability to provide much needed UAS technol- ogy to its closest partners and allies," said Remy Nathan, vice president for international affairs at the Aerospace Industries Association, in a written statement. "Current restrictions on ex- ports have allowed foreign competitors, like the Chinese, to provide their UAS technology to some of our most strate- gic partners and allies. This hurts U.S. industry and jobs and degrades our tech- nological edge, while funding Chinese R&D to further refine their systems and ability to support global operations—an advantage the U.S. currently maintains." The restrictions have left the mar- ket open to competitors, Za loga agreed. Though the Israelis are cur- rently the largest exporters, he said, the Chinese have recognized and are working on seizing the opportunity— a development with potentially wide ramifications. "China now has ambitions to com- pete in the big market—to directly com- pete against the United States and the Europeans and the Russians with high tech products," Zaloga said. "So they're trying to do that in the aircraft field Photo courtesy of the Teal Group. but they've got to get a foot in the door. They've got to convince customers that their products are equivalent in quality to the other big players'. And so you can see that they're putting a lot of effort in this field of endurance UAVs that can be armed and they are doing it because the U.S. manufacturers basically have an arm tied behind their back because of the State Department restrictions." What's very striking, Zaloga said, is the Chinese aren't necessarily pushing in all UAV sectors. "Where they're pushing very heavily is armed UAVs, roughly in the category from Predator up through Reaper, and the reason is that has been their big foot in the door in the aerospace mar- ket. They've been starting to be able to sell those things in places where they can't sell conventional military aircraft or anything else. The Saudis are buy- ing them. The UAE is buying. They've been sold to a number of African countries. So China's looking, saying, 'OK the United States has restrictions on the sale of some of their aerospace systems…this would be a good foot in the door for us.'" Nathan pointed out that foot in the door can go well beyond a one-time sale. The lifecycle of some of unmanned systems exceeds 20-30 years, foster- ing a long-term relationship centered around logistics and sustainment. There's even talk about a deal to co- produce Chinese armed UAVs in Saudi Arabia, Zaloga said, "and in significant numbers. I mean in the hundreds, which in that category is a big number." The systems the Chinese are offering are no longer copies of systems avail- able elsewhere, Zaloga said. "At one time a lot of their stuff was just kind of copies, almost direct copies of U.S. "CHINA NOW HAS AMBITIONS TO COMPETE IN THE BIG MARKET—TO DIRECTLY COMPETE AGAINST THE UNITED STATES AND THE EUROPEANS AND THE RUSSIANS WITH HIGH TECH PRODUCTS." Steven Zaloga, study co-author, Teal Group THE TEAL GROUP REPORT World Military Unmanned Aerial Systems: Market Profi le and Forecast is available for $2,195 from tealgroup.com. 52 April/May 2018 April/May 2018 unmanned s unmanned s unmanned ys tems inside unmanned inside inside unmanned THE TEAL GROUP REPORT World Military Unmanned Aerial Systems: Market Profi le and Forecast is available for $2,195 from tealgroup.com. place the human as the main sensor on the aircraft," Zaloga said. "The human is much more versatile than most elec- tro-optical or mixed electro-optical/ radar sensors that we have right now." Zaloga expects the second larg- est segment of the market to be the Medium Altitude/Long Endurance (MALE) UAVs like the Predator and Heron. With an endurance of about 24 hours and long-range capability these are generally used for operation- al reconnaissance. Teal forecast a total production value over 10 years at $22.2 billion (see Chart 4). EXPORT FIGHT BREWING All of those numbers could shift, at least for U.S. manufacturers, if the Trump administration follows through on re- ported plans to ease export restrictions. "The State Department especially has been very obstructive in the sale of larg- er UAVs, ones that are capable of being armed, into the export market—I mean to the extent that it's actually gotten ri- diculous," Zaloga said. "If you look at, for example, the long time it took the U.S. government to allow Italy to arm the Predators that they bought. They were one of the earliest European adoptees of Predators but they were the original unarmed predators. So then the Italian government came and said: 'Well, we'd

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