07 January 2021
Electro-Optical/Infrared (EO/IR) sensors are still the default sensor for the vast majority of UAVs (Unmanned Aerial Vehicles). UAV EO/IR system funding increased rapidly in the decade after 9/11, with some growth continuing in recent years. But the financial crisis of 2008, proposed budget cuts, and sequestration resulted in several years of up-and-down funding, and considerable uncertainty. Teal Group historical data show a $779 million market for UAV EO/IR systems in FY09 and only $781 million in FY13.
However, we saw this end of growth as only a pause, as most major U.S. endurance UAV platform programs were ending or nearing the end of their planned production runs. As we forecast, since 2015 budgets have extended future production for MALE programs such as the USAF Reaper and U.S. Army Gray Eagle. And the USAF also received additional HALE Block 30 Global Hawks (albeit in danger of being retired again in 2020). Global Hawk international sales have now begun with urgent orders from South Korea and Japan (though Japan may cancel its order), and Triton buys for Germany (now cancelled) and Australia (going ahead).
What’s more, a comprehensive new generation of EO/IR sensors is now paid for in DoD budgets and in most cases already in production. Along with the unexpected resurgence of the High Altitude Long Endurance (HALE) EO/IR market sector, comprehensive “next-generation” sensor ball retrofits are underway for hundreds of Medium Altitude Long Endurance (MALE) Reapers and Gray Eagles. Though unheralded in the media (upgrades rarely grab headlines), the bulk of the U.S. endurance UAV fleet is currently receiving all-new sensors, worth billions of dollars to both prime contractors and subs.
The lull in UAV EO/IR sensor market growth has proven to have been temporary, as predicted, for two major reasons. First, the need for intelligence, surveillance, and reconnaissance (ISR) has increased, not decreased, as the draw-down of troops from major ground wars in Central Asia has been followed by the need for ISR for even broader wars such as the conflict with ISIS. The shift in geopolitics to China and Asia has already raised new requirements for longer-range maritime and overland UAV ISR that is either stealthy or protected in an A2/AD (Anti-Access/Area Denial) environment, or both. And current potentially near-peer conflicts like the continuing war in eastern Ukraine – and Russian nuclear and non-nuclear saber-rattling – show how beneficial it would be to already have a fleet of “invisible” high-speed, high-altitude stealthy ISR (Intelligence, Surveillance and Reconnaissance) UAVs to monitor the border and beyond, which is why classified programs such as the USAF RQ-180 were needed yesterday and will receive major funding today and tomorrow. Note, for example, (unsubstantiated) claims in June 2017 that an EQ-4 “BACN” Global Hawk was shot down by a Russian S-300 SAM over the Mediterranean near Syria. And the admitted and accepted fact that Iran shot down a Global Hawk (Navy BAMS-D version) with a less sophisticated SAM in 2019. Global Hawks (and Triton) will be defenseless in a near-peer conflict, and can’t stay in the air even in an aggressive peacetime. Yet we have presumably not lost a U-2 to enemy fire since early in the Cold War. The urgent need for even more expensive and sophisticated UAVs with longer-range sensors is now patently obvious.
Second, regarding the legacy conflicts in central Asia that led to today’s large UAV fleets, in early 2015 Col. Courtney Cote, Project Manager of the Army’s Unmanned Aircraft Systems Project Office, was asked in an interview about the UAV situation as the war in Afghanistan wound down. He stated, “The op tempo really is not going down. As the footprint of soldiers reduces and number of soldiers reduces, the need for gaining information doesn’t go away.... UAS give you the ability to still cover the ground and maintain contact and continue to develop your situational awareness even as the deployed forces, the footprint, reduces. So in that respect the op tempo is not really reduced much.”