The growing utilization of unmanned aerial vehicles (UAVs) in the defense sector for diverse applications such as mapping, surveying, monitoring, transportation, and combat operations will fuel the demand for these drones in the upcoming years. Rising defence expenditures of several countries to purchase modern & advanced military drones for enhancing combat capabilities is projected to support the global market growth. UAVs are employed in battle damage assessment, communication intelligence, and electronic intelligence. Technological advancements in unmanned aerial systems have improved the surveillance eciency in intelligence, surveillance, and reconnaissance (ISR) missions.
The integration of articial intelligence is modernizing drone technology, enabling drones to pick targets autonomously with precision and persistence. For example, in August 2020, the articial algorithm of DARPA’s Air Combat Evaluation Program registered a win over the human pilot in a Lockheed Martin (LMT) F-16 simulator on a virtual platform at a competition sponsored by the Defense Advanced Research Projects Agency (DARPA). Extensive R&D and continuous innovations are enhancing the conventional role of multi-mission platforms in armed forces around the world. The strategic UAVs are expected to witness massive technological enhancements, superior endurance capabilities, high payload potential, and reliability in the future years. The growing demand for intelligent weapon systems in modern battle management is fueling the military UAVs market growth. In 2017, for instance, the French Defense Procurement agency signed an agreement with the drone company, Elistair, to nance its AIRWATCH projects. These projects will develop “dronebox”, a smart tethered drone for surveillance and telecommunications. The drone will support dual applications such as military and civilian safety. Government agencies are, thus, providing strong support to UAV manufacturing companies to enhance public safety.
Negative Impact on the Military Drone Market of COVID-19 to Continue 2020
The impact of the COVID-19 pandemic on the global economy is expected to be uncertain in the forthcoming years.
- COVID-19 pandemic also impacted production/manufacturing facilities and supply chains across the globe due to severe lockdown by the government aected regional and domestic demand for military drones. In Western Europe, several defense companies also witnessed an operational halt for a few months, resulting in production queues and late deliveries due to partial or complete lockdown in countries in this region.
- The spending on the military & defense sector is likely to get impacted signicantly due to negative GDP growth in both developed and developing countries in 2020. Moreover, several countries are likely to delay the planned purchases of these drones owing to the urgent need to improve critical healthcare infrastructure and hospital facilities.
- Military contracts take a long time to materialize due to the long negotiation periods, extensive testing, evaluation & analyses, customizations, numerous trials, and face-to-face meetings. The pandemic has impacted new business development opportunities in this market owing to the highly-priced procurement contracts.
- The purchase of defense equipment has also been aected due to the lack of condence in the market, leading to the signing of fewer business contracts for these drones. Economic unrest in various countries is also likely to hamper future business contracts related to unmanned aerial systems.
Drone technology is witnessing strong growth for the past several years owing to the constant innovation and R&D enhancing the capabilities. Drones are being integrated with modern sensors, LiDAR technology, high-tech cameras, GNSS, Infrared, and thermal imaging systems. The most advanced unmanned aerial vehicles are equipped with multiple sensor systems such as the global system for mobile communication (GSM), communication intelligence sensors, and air-toair missiles. Nowadays, the most advanced unmanned aerial vehicles are fully capable of carrying various payloads attached to the internal weapons bay and large sensors. Articial intelligence is currently being used commercially for autonomous ight systems in high altitude military drones.
Moreover, governments are rapidly expanding their UAV eets to bolster their defense capabilities. For example, in June 2020, the Indian government announced plans to purchase more Heron drones from Israel, with the US-made Predator B also being on India’s UAV shopping list. Today India owns more than 70 Heron drones. In 2018, the Indian Heron drones crossed the Line of Actual Control (LAC) near Doklam and crashed on the Chinese territory. In the previous year, the same incident occurred without the model being identied. Since then, India has been actively working on the domestic production of unmanned aerial vehicles for its armed forces. India is also developing the domestic variant of the MALE attack drones called Rustom and Rustom-II.
Continuous Growth of Global Military Expenditure Driving the Military Drones Industry
Most countries enhance their defense capabilities according to their nancial power, domestic economic conditions, and the internal, external, geostrategic, and political scenarios. Military expenditure is a very important parameter for operations, maintenance, procurement, and R&D to ensure a country’s safety and security. According to the Stockholm International Peace Research Institute (SIPRI), global defense spending stood at USD 1.917 trillion in 2019, with a positive growth of around 3.6% from 2018 levels.
The global defense expenditure has recorded the highest ever hike in the past decade. The major share was accounted for by the U.S., followed by China, India, and Russia. The SIPRI observed around 7.2% higher global military expenditure in 2019 compared to 2010. Countries such as China, India, Russia, and Saudi Arabia have been investing large amounts towards upgrading their military & defense systems for the last several years. These factors are projected to fuel the demand for drones for the military in the next few years.
Growing Border Disputes in Various Countries to Fuel the Market
Many parts of the world are witnessing border disputes due to disagreements over the possession of land or to control the area between two or more states. Countries that have been facing territorial issues over the past few years include India, Pakistan, China, Nepal, Bangladesh, Iran, Afghanistan, Bhutan, Taiwan, Israel, Syria, and Russia. These countries are spending large amounts of money to purchase surveillance drones to enhance situational awareness by modernizing the patrolling on the border areas. In June 2020, the Indo-China border dispute turned deadly for the rst time in more than four decades. Hundreds of Indian and Chinese troops have been engaged in a stando in the Ladakh region in the Himalayas since May. Drone technology has been playing an important role in this conict, with both countries deploying unmanned aerial vehicles for reconnaissance and logistics operations in the high altitude area.
The unmanned aerial vehicles are fully equipped with high-tech avionic systems, modern sensors, propulsion systems, payloads, and advanced ight management technology. These parameters are associated with high-quality hardware and sophisticated software systems depending upon the deployment of armed forces. These parameters increase the nal price of these drones. The high product and expensive maintenance costs are projected to hamper the future market growth. The limited use in aerial spaces and restricted applications of UAVs in various countries will also hamper future demand.
By Product Type Analysis Rotary Wing Drone Segment to Grow at a Fast Pace
Based on product type, the market includes xed-wing, hybrid, and rotary wing. The xed-wing segment is projected to hold the maximum share in this market during the forecast period. Fixedwing UAVs are widely used in military and defense operations by armed forces across the globe. The superior structural benets of these UAVs to carry surveillance operations in long-distance missions are fueling their demand. The most advanced and most powerful unmanned aerial vehicles are designed and constructed in xed-wing structures owing to their excellent and accurate aerodynamics. These factors are projected to fuel the segment’s growth during the forecast period.
The rotary-wing unmanned aerial vehicles segment is likely to show attractive growth in the future years due to the extensive development of quad-copters in recent years. These are heavy load carriers rigorously used for spying, logistics, and transportation applications across the world. The rotary-wing vehicles are employed in tactical military operations for intelligence, surveillance, and reconnaissance missions. The growing demand for intelligence operations in various countries for information collection is projected to fuel the military drone market growth.
By Range Analysis
Extended Visual Line of Sight Segment to Grow at the Fastest CAGR in the Market
Based on range, the market is segmented into Visual Line of Sight (VLOS), Extended Visual Line of Sight (EVLOS), and Beyond Line of Sight (BLOS). The extended visual line of sight segment is projected to grow at the highest CAGR in the military UAVs market during the forecast period. UAVs are widely adopted in electronic warfare, proper battle management, and various longrange missions to gather important information.
Visual Line of Sight (VLOS) UAVs are used in key applications such as disaster relief & management, re emergencies, and border patrol.
The Beyond Line of Sight (BLOS) type unmanned aerial vehicles can transport ammunition, weapons, and cargo to the targeted areas. There is a wide range of military drones to carry heavy payloads at specic locations during any critical situation. The growing awareness regarding the technology is progressing towards its commercialization and is anticipated to fuel segment growth in the coming years.
In terms of end-user, the market is segmented into remotely operated drones, semi-autonomous drones, and autonomous drones. The remotely operated drone segment is expected to have a dominant share in the market during the forecast period. The commissioned UAVs are remotely operated across the globe owing to the stringent government regulations for long-range autonomous ights.
The remote control technology, along with the radio links, is installed in command & control (C&C) and other telemetry systems in military drones. A wide range of unmanned aerial vehicles commissioned in the military is equipped with satellite receivers as part of the satellite navigation systems for long-range ights. The radio signal from orbit satellites is captured by the UAVs, which ensure the precise location, timing, and determine the path through the navigation systems that provide ight accuracy and reliability.
The autonomous segment is expected to grow at the fastest CAGR during the forecast period. Several countries are focusing on the innovation and development of autonomous unmanned aerial vehicles to the important tactical and strategic services.
The semi-autonomous segment is expected to register notable growth by the end of the forecast period owing to the rising preference for xed-range ight operations to gather useful information.
Geographically, the market is categorized into North America, Europe, Asia Pacic, and Rest of the World. North America held a major share in the military unmanned aerial vehicles market in 2019 owing to the presence of several OEMs operating across the U.S. and Canada. The increasing investments of private players in the region, along with promising developments in the U.S. Army, has sped up advancements in drone technology. The U.S. is one of the major exporters of military drones across the globe, driving regional growth at a rapid pace.
The market in Europe is expected to grow at a moderate CAGR owing to the rising necessity of situational awareness, which is pushing countries to enhance the capabilities of their armed forces with modern technologies. Germany, France, and the UK are in the race to purchase small and tactical drones to enhance their intelligence and surveillance capabilities for the future years.
The market in Asia Pacic is expected to exhibit healthy growth owing to the increasing military expenditures of various countries. According to ocial sources, China sold over 48 GJ-2 drones to Pakistan under the export brand name ‘Wing Loong II’. GJ-2 is an 11-meter long MALE drone with a payload capacity of 480kg. This drone can carry around 12 missiles or attack bombs and has a top speed of 380 km/hr and a cruising speed of 200 km/hr. In June 2018, the PLA was reportedly deploying the CH-4 large reconnaissance/strike drones and BZK-005C high altitude drones in the Tibetan plateau area. In addition to this, market players in this region are making heavy investments, which in turn is fueling the demand for military type of drone products.
Latin America & the Middle East & Africa accounted for a comparatively lower share of the market owing to the presence of a huge underpenetrated market.
KEY INDUSTRY PLAYERS
Northrop Grumman, Lockheed Martin, and Thales Group are leading the market, accounting for a dominant military drone market share in 2019. However, the lack of strong barriers to entry is projected to lead to an increasing number of domestic military drones companies entering the global market. The growing number of companies entering the drone industry is projected to lead to a highly fragmented market by 2027. Other key players such as General Atomics Aeronautical System (US), Boeing (US), Elbit System (Israel), AeroVironment Industries (US), Textron Systems (US), Israel Aerospace Industries (Israel), SAAB Group (Sweden) have also entered the market competition with drone oerings. Introduction of innovative product ranges such as AI-powered drones, Automatic Take-o, and Landing (ATOL), combat drones, strategic acquisition, and collaboration are some of the major strategies adopted by market players operating in this market.
LIST OF KEY COMPANIES PROFILED:
General Atomics Aeronautical Systems, Inc. (US) Northrop Grumman Corporation (US) Elbit Systems Ltd. (Israel) Israel Aerospace Industries Ltd. (Israel) AeroVironment, Inc. (US) Lockheed Martin Corporation (US) Thales Group (France) Boeing (US) BAE Systems (UK) SAAB Group (Sweden) Textron Systems (US)