IN FOCUS: Elbit plots UAV expansion

Tel Aviv
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Elbit Systems is the largest publicly listed defence company in a country dominated by state-owned behemoths. As such, the company is proud of its ranking among the top defence companies in the world, having begun with electro-optics and branched out into unmanned air vehicles (UAVs), electronic sensors and data fusion.

Its Hermes 450 mid-sized UAV has become popular throughout the world, and Elbit has in recent years used the same systems to expand up to the Hermes 900, effectively doubling the 450's essential performance, and the Hermes 90, a smaller version now in the final range of test flights.

Elbit Hermes 450 UAV, Elbit Systems

 © Elbit

The Hermes 450 can carry a 255kg payload

Revenue totalled $2.4 billion in 2011 for Elbit, which has a $5.4 billion backlog for its products. Although few specific customers are discussed, as is accepted practice in Israeli industry, officials say the company does roughly 25% of its business within Israel, 25% in Europe, 25% in the USA and 25% in the rest of the world, especially the lucrative and growing Latin American and Asian markets - a ratio the company cultivates carefully, wary of reliance on one customer or niche.

Abroad, Elbit's partnership strategy has allied it to AEL in Brazil, Halbit Avionics in India and UAS Dynamics in the USA. Its modus operandi is to co-opt or acquire companies until the required footholds are gained for political and economic consideration as a local company.

"Third-tier countries look at the UAV system as a technology jump for their forces," says Shimon Sarid, Elbit's vice-president of operations. "We are getting, sometimes, indications from many countries that we didn't even think of that now they're interested in jumping into the UAV world."

Elop, the electro-optical division, markets a range of electro-optics, including everything from rifle scopes and infrared binoculars to high-resolution satellite cameras and long-range oblique photography payloads. Roughly 40% of Elop's business is dedicated to ground-based systems, with another 40% for airborne systems. The remaining 20% goes to naval and space applications. Elbit builds an assorted array of cameras, designators, countermeasures and intelligence packages.

The most capable system is the advanced multi-sensor payload system, a pod that combines an Elbit-built camera, laser designator, thermal imager and various other sensors, capable of imaging targets up to 100km. "I think it's a unique capability: you cannot find it elsewhere," says Elop. At more or less 85kg, depending on the specific sensors the customer selects, "it's a very big system". The USA is by far the largest market for such systems, where US competitors such as Wescam and Raytheon dominate the market. Two customers, including Israel, are flying "a couple of tens" of the system.

DEFAULT PAYLOAD

Elbit's most popular system by far, and its biggest moneymaker, is the digital compact multipurpose advanced stabilised system, or Dcompass. Over 400 of the systems have been sold worldwide. It is the default payload for the Hermes aircraft line. "When you look at the market today for those kind of payloads, the lowest weight that you can find on the market is 45kg," says Elop. "And our goal was to build a product giving state-of-the-art performance 25% lighter than our competitors." The Dcompass weighs 33kg, it adds. A smaller version for tactical UAVs, the MicroCompass, weighs in at 9kg, while much of the competition, according to Elop, is twice the weight.

Elbit Hermes 900 UAV, Elbit Systems

 © Elbit

The Dcompass, with a 15in aperture, "is currently the biggest market, but we see the market going to smaller payloads, lighter payloads, and we anticipate that the market share will move to the order of 8-inch, 10-inch". Miniaturisation remains the division's main focus.

The Hermes line of UAVs remains Elbit's flagship. Recently upgraded with a new engine, allowing an increase to 550kg takeoff weight, the Hermes 450 can carry a payload of up to 255kg. While Elbit does not openly discuss customers, as is standard practice within the Israeli defence establishment, major operators include Mexico and Singapore. And the aircraft account for 85% of all Israel Defence Force (IDF) UAVs, says Elbit.

A derivative of the aircraft, Watchkeeper, won a 2005 contest to supply the British Army with 54 UAVs, under the largest UAV contract ever tendered outside the USA. While Watchkeeper is subjected to operational evaluations, the UK is using leased Hermes 450s to conduct surveillance in Afghanistan. The contract was won in cooperation with France's Thales, which also supplied the communications system. Elbit and Thales are "trying to market Watchkeeper [in] other places in the world, and also we're talking with them about the expansion of that agreement to other platforms", says Sarid.

The Hermes 900 almost doubles the 450's performance: it is twice the size, carries twice the payload and remains in the air for twice as long. The system was purchased by the IDF shortly after its 2009 first flight and has since found export customers in Chile and other nations in the Americas.

The Hermes 90, a smaller derivative based on external designs, is nearing readiness. The aircraft can carry up to 55kg payload and remain airborne for 15 hours.

"We are about to qualify the system and be ready for marketing," says Sarid. "It will take us three or four months. We are at the last stage of development."

HYDROGEN FUEL

Elbit's smallest offerings are its Skylark I and II. Both battery-powered aircraft are sized for the tactical market. The Skylark I can be hand-launched, but the larger Skylark II requires a launch rail. The company has test-flown a hydrogen fuel cell for the Skylark I that promises to double its endurance; the same system will be scaled up and introduced onto the Skylark II sometime in the future.

Elbit Systems Skylark II UAV, Elbit Systems

 © Elbit

Elbit Skylark II UAV

"I think in the next three years, I hope that we'll see our more advanced versions of the Hermes 900 [and] 450 come into the market," says Sarid. "On the larger type of UAVs, it will take a while and need cooperation from other countries [and] other large companies, [but] we'll be able to go up to the category of 3-5t UAV."

Defence budgets are falling worldwide, forcing companies from lucrative markets to seek profits abroad and create fierce competition where there was once very little.

"Become indispensable" is advice often given to contractors. Elbit, despite manufacturing UAVs in the same class as many competitors, appears to be targeting exactly that.