| BERLIN, Sept 14
BERLIN, Sept 14 A merger between EADS
and Britain's BAE Systems could strengthen European
efforts to develop unmanned ariel drones, after competition
between the two firms allowed the United States and Israel to
dominate a growing market.
The attacks on the United States of Sept. 11, 2001 ended
official scepticism over the value of drones and Airbus maker
EADS has spent years and around 500 million euros ($645 million)
working on the Talarion drone in the hope of an order from the
project's instigators France, Germany and Spain.
But then France's Dassault Aviation and Britain's
BAE Systems stepped up plans for their own drone under a
Franco-British defence pact signed in 2010, provoking anger and
frustration from EADS.
Earlier this year, EADS threw in the towel because it failed
to win firm commitments, and the project has been further
hampered by a major shake-up at defence unit Cassidian that has
included replacing its chief executive.
However, the efforts by Dassault and BAE to build their own
drone so far do not seem to have borne much fruit either, with
French Defence Minister Jean-Yves le Drian saying this week he
had "major reservations" about the plan.
A combination with BAE would give EADS an opportunity to
avoid losing more ground in drones, which are becoming more
common in areas such as border control, especially in the United
States, disaster investigation and protecting oil pipelines.
U.S. forces have become reliant on them for reconnaissance,
including in Iraq, and to kill Islamist militants in Afghanistan
and Pakistan, despite public outcries over civilian casualties.
Merger talks between BAE and EADS were unveiled late on
Wednesday, but it will take months to get any new company
structure in place should a deal go through.
Research funding remains an issue too. Years-long talk of
developing a European drone has so far failed to produce a
finished product, as national governments hesitate to commit to
such a project.
The biggest drone manufacturers are in the United States and
Israel - such as General Atomics, which makes the Predator, or
Heron-maker Israel Aerospace Industries.
Current worldwide spending on unmanned aerial vehicles
(UAVs) is $6.6 bln and market researcher Teal Group has
estimated that annual spending on them around the world will
almost double to $11.4 billion over the next 10 years.
An unarmed drone usually retails at around $3-4 million.
German defence Minister Thomas de Maiziere said last month
Germany, which used unmanned aircraft in World War Two, should
deploy armed drones in its military.
Aerospace firms, including former EADS boss Louis Gallois,
have long called for European countries to pool resources and
cooperate on one programme.
WHERE'S THE MONEY?
EADS unit Cassidian showcased a reborn Talarion called only
European UAS (unmanned aerial system) at the ILA Berlin Air Show
But officials in the German armed forces have pointed out
that Talarion would face competition from the U.S. Predator
drone, which is widely used in Afghanistan, and Israel's Heron,
and have questioned the value of the project.
The biggest challenge remains a lack of concerted investment
in Europe, where governments are generally cutting back on
defence spending, partly in view of the euro zone debt crisis
and the global slowdown, and are wary of big defence projects
with spiralling costs and uncertain outcomes.
"Europe is going to get there, but it requires some
investment," Teal Group's Phil Finnegan said at the air show
just before the EADS-BAE talks emerged. "So far, Europe has
really relied on imported technology."
Suppliers in Europe would be at the ready if a new drone
ever takes off, but caution that seems unlikely to happen any
MTU Aero Engines and Italy's Avio Group agreed
earlier this year to explore opportunities related to propulsion
systems for medium-altitude long endurance (MALE) UAVs and
"This is a move forward to demonstrate here we are, we are
prepared to do something, but there is no programme, no
programme in sight to develop a UAV in larger volumes that
requires specific engine technology," MTU Chief Executive Egon
Behle said at ILA.
And Diehl Defence, which was at one point hoping to be
involved in the Talarion project, is still looking at providing
weapons capability for any European UAV project.
"There is no research programme as such, but we are looking
at concepts. It wouldn't be advisable to think about it only
when the definitive decision has been taken," Managing Director
Claus Guenter said.
EADS CEO Tom Enders said this week he was pretty confident
some progress would be made in coming years, but for now the
German Bundeswehr plans to start using the Euro Hawk, made by
Northrop Grumman and EADS's Cassidian.
The Euro Hawk, which was also on display at the Berlin air
show, will make its first test flights in Germany later this
year, once it has received the necessary certifications, and
Enders said he hoped it would come into use in 2013.
The Bundeswehr has leased three Heron drones, which it is
expected to keep until 2014 and is considering buying some
U.S.-built Predator B drones, which can carry weapons as well as
perform reconnaissance. An alternative could be procurement of
the Heron TP.
Overall, the Bundeswehr plans to procure 16 UAVs in the long