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Air of success - Israel Defense Forces

Frost & Sullivan has crowned Israel the world's biggest exporter of unmanned aircraft, but for how long?

In mid-May, Northrop Grumman Corporation celebrated the successful carrier catapult launch of its futuristic X-47B unmanned aerial vehicle (UAV). At the same time, Israeli defense industry heads can pat themselves on the back for a different reason: a new report by Frost & Sullivan crowned Israel as the world's biggest drone aircraft, or UAV, exporter

Israel was once proud of its Shamouti orange exports, but times have changed, the water is gone, the orange groves have been uprooted, and someone realized that UAVs make a lot more money. According to Frost & Sullivan, sales by Israeli UAV makers totaled $4.6 billion in the past eight years, an average of $580 million a year. This figure includes exports of the planes themselves, and of their operating systems, command and control caravans, and payloads.

Frost & Sullivan predicts that Israeli UAV exports will grow by 5-10% a year through 2020. This will partly be because of US regulations, which hinder defense exports. Israeli companies have filled the vacuum and are working hard in strategic partnerships with foreign companies.

Frost & Sullivan Israel general manager Eran Flumin said, "Israeli companies continue… investing in aggressive marketing in markets where demand for unmanned aerial systems continues to grow, such as Africa, Asia-Pacific and South America."

These efforts will be on display at the Paris Air Show in June, where Israeli companies will unveil their top-of-the-line products to potential customers.

10% of defense exports

Israel's defense exports averaged $6.1 billion a year in 2005-12, and Israel is mentioned in the same breath with the world's biggest arms exporters, after the US, Russia, France, Germany, and the UK. 10% of Israeli defense exports are UAVs of various kinds. Israeli technology upgrades UAVs' capabilities, making them more versatile. According to foreign reports, Israeli UAVs are used on attack missions because they can carry air-to-ground missiles.

Israel has never confirmed these capabilities, despite Palestinian claims that some of the targeted killings in Gaza were carried out by munitions fired from UAVs. In addition to attack capabilities, Israel's two biggest UAV makers - Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1) and Elbit Systems Ltd. have developed payloads for long-range intelligence gathering, marine operations, real-time surveillance of targets, and even electronic warfare.

These capabilities are made possible by what Israeli industry calls "designated payloads", which are installed in the fuselage of the UAVs. Some Israeli UAVs can carry several payloads simultaneously. Using state-of-the-art satellite communications, they can do wonders over extended periods far from Israel's borders.

Despite the fantastic numbers in the Frost & Sullivan report, Israeli companies are apparently unable to repeat their peak year of 2005, when they had $1.7 billion in exports of UAVs and systems. Frost & Sullivan believes that compliance by Israel's Ministry of Defense and Ministry of Foreign Affairs with new trade laws, which tightened oversight on defense exports, greatly restrained companies' enthusiasm to sell, affecting UAV exports.

In view of diplomatic and other sensitivities, the Ministry of Defense has blocked several big UAV deals of Israeli companies in recent years. As a result, half of Israeli UAV exports are to Europe. The second largest market, 33% of the total, is the Asia-Pacific region, followed by South America with 11%, North America with 4%, and Africa with 1.5%.

In addition to IAI and Elbit Systems, other Israeli companies in the sector are Aeronautics Ltd., BlueBird Aero Systems Ltd., and Gilat Satellite Networks Ltd. (Nasdaq: GILT; TASE: GILT). The scores of countries which have procured Israeli UAVs include Brazil, Chile, Colombia, Ethiopia, Finland, France, Germany, India, Nigeria, Spain, Turkey, and the UK. There have been reports that Turkey used IAI UAVs extensively in its war against the Kurds.

Stealth is the word

Israel closely followed the X-47B's historic test flight. The X-47B is a huge UAV with stealth capabilities, which is catapulted from aircraft carriers. The US Department of Defense is enthusiastic about the innovative unmanned combat air system (UCAS) and how it will change the face of naval warfare. The X-47B resembles the B2 strategic stealth bomber in shape, and has a range of 3,000 kilometers for espionage and bombing missions.

In the test, the X-47B was catapulted from the deck of the USS George H.W. Bush, flew over several preprogrammed markers, and, after an hour of impressive performance, landed at a base in Maryland. Late this year, the plane is scheduled to make another critical test flight, which will climax when Northrop Grumman will try to land it on the deck of a carrier. If the landing goes as well as it does on simulators, there will be great joy.

Israeli companies praised Northrop Grumman's impressive achievement, but worry that the X-47B's success will harm their leadership in the UAV field. "We are not completely exposed to the capabilities developed by the Americans in the UAV field, because they are classified platforms, which are not intended for export, but will stay in the US," says Elbit Systems EVP and general manager UAS Division Elad Aharonson. "In any event, the Americans have entered the field of combat UAVs, which are due to replace combat jets, and we're not in this niche. Entering this niche involves huge investment. We aim our products at the export market, and we're concerned with systems than platforms."

Elbit Systems' Skylark UAV is used by the IDF Artillery Corps for intelligence and target acquisition missions. Elbit Systems also offers two bigger UAVs, the Hermes 450, which the Israel Air Force operates, and the Hermes 900, which the company considers its flagship product. When the name of the game is capabilities, Elbit System has adapted these platforms for innovative payloads, which will further enhance intelligence gathering capabilities, customized for the customer's needs. "In the coming years, we will see innovation in other payload applications, but we'll see less creativity in the platforms," says Aharonson.

18 months ago, the more advanced IAI Heron TP crashed near Kibbutz Hefetz Haim in the Coastal Plain during a test flight of a new system which had been installed. Breakdowns occur on all aircraft of every manufacturer.

IAI reports satisfied customers who use its UAVs in combat areas in Afghanistan, on marine patrol missions, or to chase after drug traffickers and people illegally crossing borders. IAI's UAV portfolio includes the Harop, a suicide UAV which loiters over a predetermined target, photographs it, and if ordered, crashes into it, destroying it.

IAI CEO Joseph Weiss told "Globes" that, in the coming years, the world's armies would gradually expand their UAV operations to new missions which are currently carried out by manned aircraft, which would give the company's sales reps a lot of work. "It is hard for me assess at the moment what our next UAV platform will look like, but the upcoming innovations will mainly be in the area of payloads which the platforms will carry. Naturally, we are staying alert and monitoring developments on the modern battlefield, so that our systems will meet our customers' needs in Israel and around the world," he said.


Source: Published by Globes/ Israel business news (globes-online.com) - 23 May 2013

Photo: The Israeli Air Force Elbit Hermes 900 UAV (Photo by Elbit)


(5/23/2013)


 
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