July 16, 2018 / 9:40 AM / 2 years ago

Northrop Grumman upbeat on talks for German drone contract

FARNBOROUGH, England (Reuters) - Northrop Grumman Corp (NOC.N) is upbeat about the prospects for the sale of its high-altitude Triton MQ-4C unmanned surveillance system to Germany, but says the deal could take several years to complete.

A UAV helicopter build by Northrop Gruman is on deck aboard the soon to be commissioned littoral combat ship USS Coronado during a media tour in Coronado, California April 3, 2014. REUTERS/Mike Blake/File Photo

Brian Chappel, sector vice president and general manager of autonomous systems at Northrop, said the German government was working closely with the U.S. Navy to move forward after the State Department in April authorized the sale of up to four drones worth up to $2.5 billion.

Northrop and Airbus Defense and Space, a unit of Airbus SE (AIR.PA), have teamed up on the program, to be called Pegasus in Germany, which will help Germany beef up its surveillance capabilities. The aircraft are launched from land and can be programed to fly autonomously as high as 60,000 feet to gather a wide array of intelligence data.

The German government plans to buy three of the drones, equipped with sensors and a mission system built by Airbus, with deliveries to start in 2025, according to government documents.

The decision came after the messy 2013 cancellation of plans to buy a version of Northrop’s Global Hawk drone, after it became it clear it could cost up to 600 million euros ($702 million) to get the new system approved for use in civil airspace.

Chappel said he was upbeat given that the entire process - including preparations for certifying the drones’ use in civil airspace - was moving forward more smoothly this time.

“The German government understands what they want,” Chappel told Reuters ahead of the Farnborough air show. “We’re going to be very careful and make sure we start a program that’s going to be successful because nobody wants to have a problem again.”

Airbus Defense and Space Chief Executive Dirk Hoke told Reuters his company looked forward to moving forward on the program after the demise of the predecessor Eurohawk.

“That is an important project for us,” Hoke said, adding that funding Pegasus would help preserve key signals intelligence capabilities in Europe, which would also play a role in a future Franco-German fighter jet program.

Chappel said the groundwork for a successful contract had been laid on both sides, and all the parties involved were closely aligned to get the deal done. Now the challenge was working through the contracting process.

Northrop developed the Triton, a marine-based variant of its Global Hawk, for the U.S. Navy under a contract awarded in 2008.

Australia last month said it would buy six Triton aircraft to beef up its maritime patrols, with an initial investment of A$1.4 billion ($1 billion).

Reporting by Andrea Shalal; Editing by Toby Chopra and Susan Fenton

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