The international UAV sector needs to anticipate increased barriers to market entry in the near term as the regulatory environment evolves according to Alex Cresswell, Thales United Kingdom vice president for intelligence, surveillance (ISTAR) and UAV systems.
Consolidation in the sector is increasingly likely he argues, both in terms of numbers of manufacturers and in classes of systems.
Speaking at the Bristol International UAV conference in Bristol, UK, Creswell said that while the development of an effective regulatory environment is essential, this may result in the costs of compliance eroding the price edge of UAVs relative to manned aviation.
The described the current state of the UAV sector has having close parallels to the manned aerospace environment at the beginning of the jet age, with this including the regulatory environment. “In the 50’s we saw a very competitive global aerospace industry with very many players in equally as many countries - Boeing, Hawker de Havilland, Aerospatiale, Fokker, Dornier to name just a few. Very many of those over the years have consolidated of course.
“Now at that time there were many potential solutions to aviation problems, some successful, some less successful. Many have also forgotten that manned passenger aviation in that period was, by today’s standards, significantly more dangerous. One’s chance of arriving at ones destination was significantly less in statistical terms than it is now. As the regulatory environment itself matured, so the cost of manufacturing solutions and developing solutions increased.
“What that did was then drive up barriers to entry, increase the costs associated with being in the industry, and drive the rationalisation of the industry that we have seen over the past 50 years. There are now relatively few manufacturers in that playing field.
“Today we have got many UAV developments going on around the world. There are very few barriers to entry and probably the maturity of radio modelling has contributed very significantly to that”.
Thales is currently tracking some 470 different UAV development programmes internationally Cresswell said, while another 80 systems are considered to be at a mature stage. Thales UK is the prime contractor for the British army Watchkeeper UAV programme, based on the Elbit Hermes 450 system.
The international regulatory environment for UAVs is still evolving Creswell told the conference: “I think we are still some years away from sufficient maturity to see a consolidation that we have seen in manned aviation. I look at where UAVs are today I see many similarities with the manned regulatory environment and the industrial landscape of the 1950s and I am sure as we see the regulatory environment mature we are going to see that consolidation.
“I also see as an unfortunate consequence the barriers to entry will go up. I only hope that we don’t follow manned aviation in precisely the same way into robbing unmanned vehicles of their potentially greatest asset, which is low life cycle and operating costs. If we simply copy, fifty years later, exactly what the manned aircraft industry does, all we will do is end up with solutions that cost just as much to build and operate which will rob unmanned aircraft of one of their biggest advantages”
Rationalisation of the industry is likely to be mirrored by a rationalisation in the types of UAVs fielded, particularly in military applications he said. The future of medium altitude long endurance (MALE) UAV's is increasingly in question as tactical systems become more capable and high altitude long endurance aircraft expand their mission capabilities.
“My part of the industry isn’t investing very much in MALE UAVs. I am not sure that category of UAV has got as much future as one might have imagined ten years ago, seeing a forced contraction as tactical UAVs become more capable and larger jet powered UAVs carrying the sorts of payloads necessary encroach on it from above.”
Cresswell also forecast increased use of service based models for development of the military marketplace. “We are going to see a much greater use of what we would call surveillance by the hour or performance based services. With high operational tempos and pressures on military budgets and certainly pressures on military manpower customers are finding it increasingly difficult to acquire and operate ISTAR capabilities, and there is no real reason why industry can’t provide levels of guaranteed surveillance over given areas in accordance with what the customer wants to do. This means of course that the product that you are selling is information, not operating a fleet of aircraft with sensors on them”.
The services model will also predominate in the civil sector Cresswell says: “I think in the civil area service orientated solutions will be the norm. I think UAV leasing, paper use, fractional ownership schemes will come into play [to meet the needs of] small users with little capital. Services will be provided by a growing market. BP for example will not want to become aircraft operators in order to watch pipelines; they will want to buy protection and information services“.