The Teal Group is now issuing their 2008 World Unmanned Aerial Vehicle Systems annual sector study, and the total is holding steady at a projected $55 billion. They see the current worldwide UAV expenditures of $3.4 billion annually to $7.3 billion within a decade, with the USA accounting for 73% of the worldwide RDT&E spending on UAV technology and about 59% of the procurement (vs. overall global defense spending shares of 67% and 37%, respectively). Even so, European UAV markets are becoming increasingly important, and UAV projects in countries like Turkey, Pakistan, the UAE, Argentina, et. al. are demonstrating that the sector’s dynamism at the low-medium end is well within the reach of local players around the world. Maintenance will also grow as more UAVs enter service, and so will the complementary sensors market that Teal includes in its forecasts as an integral part of platform costs. Teal Group release | Report overview page.
The Defense Procurement Death Spiral. It’s what happens when the costs of each successive generation of equipment rise faster than inflation, leading to smaller, longer production runs that inflate costs further and often force additional rounds of cuts, as weapons programs collide with one another inside limited budgets. That isn’t what’s happening to the US Army’s helicopter modernization program, which canceled the world-leading RAH-66 Comanche scout/attack helicopter in favor of less capable but cheaper and more numerous off-the-shelf designs in the light utility (UH-72A) and armed reconnaissance (ARH-70A?) space, and is sticking with the proven CH-47 Chinook family (heavy lift) and H-60 Black Hawk family (utility) as its new-build options. A choice that’s creating a niche for new options and features in the utility space like the NH90 TTH, and Sikorsky’s H-92 Superhawk.
Even so, the Congressional Budget Office sees choppy air ahead. The US Army’s helicopter fleet has plunged from 9,000 at the end of the Cold War to 3,500 just 20 years later, and the “procurement holiday” of the 1990s plus high demand in the current conflict means that most of the helicopters in today’s fleet already exceed or soon will reach ages “greater than the Army considers practical.”
The CBO estimates that the Army’s modernization plan will cost $3.3 billion per year, on average, from 2007-2030, significantly more than the $2.2 billion annual average the Army has spent between 1986-2005. Military planners who propose future spending boosts are usually deluding themselves, unless the country embarks on a major increase in the defense procurement budget as a whole, or other areas are short-changed in exchange. Worse, this proposed spending boost comes in the same post-2020 time frame that the Army expects to invest heavily in the new $260+ billion Future Combat Systems (FCS) family of equipment. Yet short of shrinking the force again, or accepting further aging in the fleet, the low-cost approaches pursued by the US Army mean that there’s little potential to reduce spending on its overall helicopter modernization programs – as the CBO’s 4 alternative scenarios demonstrate. Read “Modernizing the Army’s Rotary-Wing Aviation Fleet (November 2007)” [PDF]
Thales Australia has signed a contract for A$ 100M (about $88.2 million) with Eurocopter subsidiary Australian Aerospace, for services related to Australia’s new “MRH90” helicopters under Project AIR9000 Phases 4 & 6. Under this contract, Thales will add the responsibility to provide aircraft equipment and spares, incl. TopOwl helmet-mounted displays with night vision capabilities, other cockpit avionics including navigation, internal secure communications, identification systems, and tactical systems for Australia’s 34 new MRH90 TTH helicopters, bringing the total number of helicopters they’re responsible for to 46. The delivery of this equipment will be scheduled from 2008 – 2013.
As an A$ 20 million portion of that contract, Thales will also supply the Australian developed Ground Mission Management System (GMMS) to fulfill Army Aviations Training & Operation requirements.
Thales has already established a significant Australian footprint in these areas, thanks to Eurocopter’s ARH Tiger attack helicopter contract, and Australia’s earlier purchase of 12 NH90 variants. Local development of the Tiger Ground Mission Management System; the ARH Software Support Facility in Brisbane; “TopOwl” NVD Helmet Assembly, maintenance and customisation capability; and avionics through-life support infrastructure services have all spun out of these earlier programs. Thales Australia release [PDF].