AIRSHOW-General Atomics sees growing demand for drones

Tue Jul 20, 2010 7:48pm EDT

* Exports approved to Saudi Arabia and others

* US Navy considering use on aircraft carriers

By Andrea Shalal-Esa

FARNBOROUGH, England, July 20 (Reuters) - General Atomics, which has already sold 435 Predator drones in recent years, sees growing demand for its unmanned planes, including a high-flying new successor to the Predator being considered by the U.S. Navy for use on aircraft carriers as soon as 2018.

General Atomics has already received export licenses to sell an unarmed export version of the Predator to Saudi Arabia, Egypt, U.A.E. and Morocco, and has applied for a license to sell to Pakistan, said company spokeswoman Kimberly Kasitz.

The plane is widely used in Iraq and Afghanistan by U.S. troops, and is also flown by Italy, Turkey and Britain.

Its use in nearly one hundred missile strikes on Pakistani territory, as cited by the Washington-based New America Foundation, has triggered debate over the ethics of "robot warfare."

Christopher Ames, a retired Navy admiral and head of General Atomics' business development, said his company had benefitted by spending its own money to develop new technologies before pitching them to the Pentagon, and it continues to do the same thing with follow-on variants.

"We're an example of how the system should work," he said in an interview at the Farnborough Airshow.

Chairman Neal Blue, who bought the company from General Dynamics for $50 million in 1986, acknowledged in 2008 Defense News interview that the company spent about 11 percent of its annual revenues on research and development, a level far higher than most publicly traded defense companies.

Blue began work on an unmanned plane about two decades ago, long before drones became as widespread as they are now. His ability to continuing working on the planes, without the pressure of shareholders demanding short-term returns, helped nurture a technology now synonomous with modern warfare.

"It's an exciting time," Ames told Reuters at the Farnborough Airshow, noting that he was drawn to General Atomics because of the promise of unmanned planes.

As a naval strike group commander after the 2004 tsunami, Ames had to divert helicopters that could have been delivering food and water to survivors to scour the seas for survivors.

"If we had had the Predator ... even just one, it would have saved lives," he said.

The Avenger model had a first flight in April and is now in flight testing. The drone flies at speeds of around 400 knots and can reach 50,000 feet, about 15,000 feet shy of the altitude achieved by Northrop Grumman Corp's (NOC.N) Global Hawk, at a fraction of the price.

It can carry the same kind of sophisticated cameras and sensors as Global Hawk, but unlike the higher-flying Northrop plane, General Atomics' Avenger can carry weapons, Ames said, noting that the new plane could well factor into the Pentagon's plans to develop a new long-range strike capability.

Those capabilities, coupled with a low cost of $4 million to $15 million, have sparked growing demand from the military, from U.S. homeland security officials and from many foreign countries such as Britain, Saudi Arabia, Turkey, Australia and Spain, Ames said.

"They're proven. They're affordable. It's a no-brainer," Ames said.

Spokeswoman Kasitz said the company's success had generated strong interest from other defense contractors interested in acquiring the privately held San Diego-based company. But Blue told her again on Tuesday, "We are constantly approached by other companies and we are not interested in selling." (Reporting by Andrea Shalal-Esa; Editing by Gary Hill)