$35 billion airborne and space-based electro-optical market

Citation

(2007), "$35 billion airborne and space-based electro-optical market", Aircraft Engineering and Aerospace Technology, Vol. 79 No. 1. https://doi.org/10.1108/aeat.2007.12779aaf.018

$35 billion airborne and space-based electro-optical market

$35 billion airborne and space-based electro-optical market

Forecast International is projecting that countries world-wide will spend more than $35 billion on 33 different Airborne and Space-Based EO programs over the next ten years. According to its new study, “The Market for Airborne and Space-Based Electro-Optical Systems,” the supply of potential EO platforms will be abundant over the next decade. This analysis consists of three major market segments: the Airborne Electro-Optical sector, which accounts for 38.4 per cent; the Space-Based EO programs, which represent approximately 38.2 per cent; and the Special Mission Aircraft program, which accounts for the remaining 23.4 per cent of this study.

The Airborne EO sector is an emerging market, supported by a number of major manufacturers. Two Airborne EO programs alone account for almost $5 billion in sales, with targeting pods providing for over $3 billion. Lockheed Martin, Northrop Grumman, Rafael Armament Development Authority, and Raytheon each manufacture a targeting pod, which has found fervour with the US military. This market is expanding due to Operation Iraqi Freedom and the use of pods for non-traditional intelligence, surveillance, and reconnaissance (NT-ISR) missions, as well as close-air support missions. Lockheed Martin is the prime on the approximately $2 billion Target Acquisition and Designation Sight/Pilot Night Vision Sensor (TADS/PNVS) and its modernised version, Arrowhead. These electro-optical fire control systems are designed for the AH-64 Apache and its international derivatives.

Space-Based EO programs form the second major market segment. Two major space programs represent 90 per cent of the space-based portion of this analysis. The Space Tracking and Surveillance System (SSTS) and the Space-Based Infrared System (SBIRS High) are planned constellations of satellites that rapidly detect and track ballistic missile launches from anywhere on Earth. “Recent launches in North Korea highlight the need for these types of reconnaissance systems,” said Defense Electronics Analyst Theresa Hartley, author of the study.

The special mission aircraft portion, the report's third major market segment, consists of only one program: Boeing's YAL-1A Airborne Laser program. However, this technically challenging and expensive program is in danger of being cancelled if any major program difficulties emerge or if funding is needed for higher-priority projects.

There are five major players in the Airborne and Space-Based Electro- Optical market. Dominating this market are Lockheed Martin, The Boeing Company, and Northrop Grumman, which together represent almost three- quarters of the market share of this analysis. However, Boeing's revenues are tied to the Airborne Laser Program, and extensive cutbacks would affect the outcome of this analysis considerably. BAE Systems and Raytheon round out the top five companies. “These five corporations remain on top because they are prime contractors for multimillion-dollar projects, as well as subcontractors to each other's major programs,” Hartley said. In a second report recently published by Forecast International it is predicted that radar will remain a core part of aircraft avionics suites, battlefield command networks, missile defense shields, and air traffic control (ATC) systems over the next 10 years. To meet global demand, Forecast International's “The Market for Radar Systems” study is projecting a $40 billion radar market over the decade reviewed – 2005-2006. This total will encompass the development, procurement, and maintenance of nearly 100 different radar systems over the next ten years. In terms of unit sales, 9,800 individual radar systems will be procured world-wide during the decade.

Although infrared and electro-optical sensors have become increasing popular, radar remains a vital part of any modern sensor suite. Radar systems are now being tied to overall data-fusion networks on the battlefield and electronic suites in commercial aircraft.

Modern technology will drive radar production, according to William Ostrove, the report's author. “Technology is making active electronically scanned array (AESA) a viable, affordable, attractive alternative to the old dish or more modern phased- array aperture,” he said. Ostrove added that many new radar systems over the next ten years, especially military fire control and surveillance radars, will be dominated by AESA technology.

The major trends affecting the radar industry are globalization and consolidation. Companies such as Northrop Grumman, Raytheon, and Thales continue to acquire and merge with competitors and will remain top radar manufacturers for years to come.

Northrop Grumman's sales will be dominated by fire control radars such as the APG-68 and APG-81, and by surveillance radars for unmanned aerial vehicles (UAVs) and airborne early warning and control (AEW&C) aircraft such as the E-2 Hawkeye. Raytheon will also enjoy strong sales of fire control radars, in particular its APG-63. Also boosting market share will be sales of the company's SPY-3 naval radar and Volume Search Radar (VSR). Thales, meanwhile, will continue to produce a wide variety of radars for land, sea, and air warfare applications.

According to the analysis, the radar market will peak in 2008 and then begin to decline. Many programs, such as the popular APG-68 that equips the F-16, will begin winding down around 2015 as orders for their primary platforms dry up. Other programs, such as development of the APG-81 for the Joint Strike Fighter (JSF), will take their place, but will not result in equivalent production numbers.

Details available from: Forecast International, Inc., Tel: +1 203 426 0800, E-mail: ray.peterson@forecast1.com