At Asia Air Show, Plenty of Competition for Sales of Drones By Joe Cochrane

www.nytimes.com / View Original / February 16th, 2014

 

SINGAPORE — While the supersonic jets, attack helicopters and surface-to-air missiles longer than a stretch limousine wowed an estimated 80,000 people who attended the final days of the Singapore Airshow over the weekend, it was a small, silent and unarmed weapon that took center stage as major players in the Southeast Asia weapons market hawked their wares.

Military contractors from Austria, Australia, Israel, the United States and other countries showcased unmanned aerial vehicles, or U.A.V.s, throughout the week here at Asia’s largest air show, hoping to make deals with militaries across the Asia-Pacific region. The drones themselves can cost several hundred thousand dollars, and high-end systems can cost as much as $20 million.

Although the United States has used the American-made Predator to launch missile strikes in Afghanistan, Iraq, Pakistan and Yemen, unarmed versions of the craft are looking increasingly attractive for both military and civilian uses, experts say.

This is especially true in Southeast Asia, given issues like territorial disputes in the South China Sea, maritime piracy and terrorism.

“With all that’s happening with the Chinese, pirates, Islamic extremists, it brings new capabilities for different kinds of problems,” said Dan Ze’evi, a retired military officer who is director of marketing communications and information for Israel Military Industries. Although the company did not have any drones for sale at the air show, two other Israeli manufacturers,Israel Aerospace Industries and Elbit Systems, had systems on display.

Military contractors say the U.A.V.s can be used watching naval movements around disputed areas, monitoring land and maritime borders, and guarding natural resources and vital infrastructure like oiland natural gas fields and pipelines, as well as for civilian tasks like detecting forest fires and damage from natural disasters.

“Given the disputes in the Spratly Islands, piracy, counterterrorism, illegal logging and fishing, there is a market,” said Douglas Dawson, director of international business development for the Aero Services Division of General Atomics, which produces the multimillion-dollar MQ-1 Predator. Nations including China, Vietnam and the Philippines stake claims to the Spratly Islands, which lie in the South China Sea.

“We think there is a requirement in this region,” Mr. Dawson added, noting that he had met during the air show with military delegations from around Asia, as well as the Middle East. He said he planned to meet this week with officials of Indonesia’s Ministries of Defense and State-Owned Enterprises and with private energy companies in Jakarta, Indonesia’s capital.

All told, $32 billion worth of commercial deals were announced during the six-day trade portion of the show, the event’s organizers said on Friday. But that did not include sales of weaponry, whose deals were not publicly announced. Experts said Brunei, Indonesia, Malaysia, Singapore and Thailand were seen as the biggest potential customers for military hardware and systems upgrades at the show.

Industry players said there was no shortage of interest among Asian military delegations looking for advanced weapon systems or to upgrade existing ones.

BAE Systems Inc., the American subsidiary of the British arms company BAE Systems P.L.C., is now the only company qualified to upgrade the F-16 fighter jet, aside from its manufacturer, Lockheed Martin, said Brian W. Krauss, the director of business development for aerospace solutions for the American unit of BAE.

The British company recently announced an agreement to upgrade more than 130 South Korean F-16s, a deal that news media reports said could be worth more than $1 billion.

“It’s a wide market, especially countries in the region” like Indonesia, Singapore and South Korea, whose militaries rely heavily on the F-16, Mr. Krauss said, adding that most countries did not have the ability to do upgrades themselves.

In addition, most countries lack the expertise and infrastructure within their domestic arms industries to produce many of the weapons systems they need, analysts say, which makes looking abroad a necessity.

Previously limited by export control restrictions under the Missile Technology Control Regime — an international agreement intended to prevent the global spread of missile-based weapons delivery systems — General Atomics received permission from the United States to sell an unarmed version of the Predator abroad, the Predator XP, Mr. Dawson said. Last year, it announced its first sale of an undisclosed number of the aircraft to the United Arab Emirates for $197 million.

For its part, China promoted its homegrown drone, the Wing Loong, with a small display model and showed off models of its JF-17 Thunder single-engine fighter jet and an attack helicopter, all of which it is trying to export. No actual Chinese aircraft or full-scale mock-ups were on display.

Despite China’s trying to establish itself as a competitor in the global weapons market, the development of its advanced fighter aircraft remains shrouded in secrecy. There were only about 20 Chinese companies at the air show, compared with 173 American companies, many from the military industry, and actual United States military and commercial aircraft on display included the V-22 Osprey tilt-rotor craft, C-17 Globemaster transport plane, numerous U.A.V.s and the Boeing 787 Dreamliner.

Asked whether China was having success in making sales, given the size of its delegation and its model-only displays, one member of the American delegation said, half-jokingly, “Well, they’re trying.”

The delegate, who spoke on the condition of anonymity because of the sensitivity of the issue, added: “Everyone is trying to sell. Us, the French and everyone else.”

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