Teal Group Market Profile and Forecast Sees $6.6Bn in Annual Spending
WASHINGTON | Unmanned Aerial Vehicles (UAVs) continue as the most dynamic growth sector of the world aerospace industry this decade, report Teal analysts in their latest integrated market analysis. Teal Group’s 2012 market study estimates that UAV spending will almost double over the next decade from current worldwide UAV expenditures of $6.6 billion annually to $11.4 billion, totaling just over $89 billion in the next ten years.
“The UAV market will continue to be strong despite cuts in defense spending,” said Philip Finnegan, Teal Group’s director of corporate analysis and an author of the study. “UAVs have proved their value in Iraq, Afghanistan and Pakistan and will continue to be a high priority for militaries in the United States and worldwide.”
“The Teal Group study predicts that the U.S. will account for 62% of the worldwide RDT&E spending on UAV technology over the next decade, and 55% of the procurement,” said Teal Group senior analyst Steve Zaloga, another author of the 574-page study.
The ninth edition of the sector study, “World Unmanned Aerial Vehicle Systems, Market Profile and Forecast 2012”, examines the worldwide requirements for UAVs, including UAV payloads and companies, and provides ten-year forecasts by country, region, and classes of UAVs.
Teal Group analysts already cover the UAV market in their “World Missiles and UAV Briefing”, which examines the UAV market on a program-by-program basis. Sensor payloads are also treated in Teal’s “Military Electronics Briefing”. The sector study examines the UAV market from a complementary perspective, namely national requirements, and includes both a comprehensive analysis of UAV system payloads and key UAV manufacturers.
UAV PAYLOADS
The 2012 study provides 10-year funding and production forecasts for a wide range of UAV payloads, including Electro-Optic/Infrared Sensors (EO/IR), Synthetic Aperture Radars (SARs), SIGINT and EW Systems, C4I Systems, and CBRN Sensors, worth $2.7 billion in Fiscal Year 2012 and forecast to increase to $6.0 billion in Fiscal Year 2021. The UAV electronics market will grow steadily, with the fastest growth and opportunities in SAR and SIGINT/EW, according to Dr. David Rockwell, third author of the new study.
“Few now question that ISR is ‘the centerpiece of our global war on terrorism’, with production beginning for major endurance UAV systems such as MP-RTIP, new development programs such as wide angle EO/IR systems, a variety of ground and foliage-penetrating radars and an ongoing ‘sensor drift’ as more sophisticated non-EO sensors are developed for smaller and smaller UAVs.”
“The payload portion of the 2012 study includes many new systems and system types, including a new section on UAV self-defenses. Overall, UAV SIGINT and EW markets will see a massive 20.2% CAGR (Compound Annual Growth Rate) from FY12 to FY17,” according to Dr. Rockwell.
UAV COMPANIES
The study also includes a UAV Manufacturers Market Overview that reflects the worldwide UAV market “again continuing as one of the prime areas of growth for defense and aerospace companies,” said Finnegan. The new study reflects the rapid growth of interest in the UAV business by increasing the number of companies covered to some 40 U.S., European, South African and Israeli companies, and reveals the fundamental reshaping of the industrial environment.
All companies have been updated including their involvement and strategy in UAVs and five new companies have been included: Canada’s Aeryon and CAE, Inc., South Africa’s Denel, US-based Griffon Aerospace and France’s Dassault Aviation.
As prime contractors and small companies compete in the dynamic UAV market, they are adopting widely different strategies. “Our overview tracks the widely varying approaches being taken by these key companies, ranging from outright acquisitions to teaming arrangements and internal development of new UAV systems,” said Finnegan.
The 2012 edition increased 25% in size, and, for the first time, includes UAV market forecast spreadsheets, permitting data manipulation and offering a powerful strategic planning mechanism.
Drones to Increase 45% in Pentagon 30-Year Aviation Plan....
The U.S. military’s inventory of unmanned aerial vehicles, will grow to 645 aircraft in fiscal 2022 from about 445 in fiscal 2013, including versions of Northrop Grumman Corp. (NOC)’s RQ-4 Global Hawk and General Atomics’ MQ-9 Reaper and MQ-1 Predators, the Defense Department said in a report required by Congress on its aviation blueprint for the next 30 years.
In addition, the U.S. Army wants to buy 164 Gray Eagle drones from closely held General Atomics of San Diego from 2013 to 2022 “in direct support of ground forces,” the Pentagon said in the report obtained today.
Drones are playing an increasing role as the Pentagon seeks a force that will be “smaller and leaner” and more technologically advanced, as Defense Secretary Leon Panetta put it when he introduced a revamped national security strategy in January. Even as the inventory of drones grows, the U.S. military is buying fewer than originally planned because of reduced budgets, a defense official told lawmakers.
“The military departments adjusted their plans to comply with a constrained top line by procuring fewer aircraft than desired,” Deputy Defense Secretary Ashton Carter wrote in a letter to the leaders of the U.S. House Armed Services Committee on April 4.
Budget Cuts
The Pentagon is cutting $487 billion from its spending over the next 10 years and may face an additional $500 billion in cuts if Congress and the Obama administration don’t reach an agreement on reducing the U.S. deficit.
Northrop Grumman of Falls Church, Virginia, fell 30 cents to $59.73 at the close in New York trading and has declined 4.2 percent in the past year.
The Defense Department plans to spend $770 billion on aviation assets from 2013 to 2022. This includes fighter jets, attack helicopters, airlift and cargo aircraft, combat search and rescue aircraft, air refueling planes, bombers, anti-ship and submarine aircraft, drones, training platforms and other aircraft used by Special Operations forces.
Annual funding levels will peak at $80 billion in 2022, according to the Pentagon.
The Air Force “plans to continue aggressive funding” for a new long-range bomber with nuclear capabilities, according to the aviation report. The bomber would reach its initial capability in the mid-2020s, according to the Pentagon. The Defense Department plans to “hold down” the unit cost to “ensure sufficient production” of 80 to 100 bombers, according to the report.
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