Missile Defense Industry Projects Strong Growth Despite Global Economic Turmoil

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Image from Bird Aerosystems test of its new missile protection system.
Image from Bird Aerosystems test of its new missile protection system. Credit: Screen grab

Raytheon Co on Tuesday said it has received significant interest in its latest upgrade to its Patriot air defense missile systems, both from its 13 operator countries and from potentially new customers.

The U.S. government last year gave permission for Raytheon to export a new AESA radar to countries that have Patriot missile defense systems. Raytheon says the new radar gives the system a 360-degree view of potential threats, makes it more reliable to operate, and lower its operating and maintenance costs.

"We're not prepared to make any announcements with respect to orders this week. But there's been significant interest from the member nations who have Patriot, and as well as countries who don't already have Patriot, in a system of this capability. It is the first of its kind in the industry", said CEO John D Harris.

Speaking at Farnborough Airshow, Harris said the company has switched from a hardware-based approach to one that is software-based, forecasting growth of around three to five percent.

The company employs around 2000 people in Britain, and HArris said it would maintain its presence in the country despite the uncertainty cast by Brexit.

"We don't see any immediate impact as a result of Brexit. We've been here in the UK for the better part of 100 years. We have thousands of employees doing great work, enjoying the privilege of working not only here in the UK, supporting the Ministry of Defence, but also being part of the global supply chain. So we see continued interest in the capabilities that we have here in the UK. And we intend to use those going forward, to continue to grow", said Harris.

A rise in geopolitical tensions has seen an uptick in defence spending in the last 12 months, but analysts are skeptical over any big deals being struck at this year's airshow.

"The problem is from an airshow perspective is that even though you'll see a lot of talk about defence, very few commercial contracts, that is to say actual firm contracts, get signed at airshows. You might see announcements, you might see discussions, letters of intent, whatever else. But it's not the same as with commercial jetliners, when people show up with a Samsonite of cash and ask for 100 jets", said Richard Aboulafia, President at Teal Group.

But that hasn't defence contractors flocking the Farnborough from around the world.

Israel-based Bird Aerosystems is marketing its new MACS (Missile Approach Confirmation Sensor) which uses doppler radar to measure both the speed and range of a potential missile to determine whether it is a threat, before deploying flares to neutralise it.

Its existing Airborne Missile Protection System (AMPS) is already installed on over 600 military vehicles around the world, but the company says its new MACS system is generating interest from across the civil world, from African presidents to the UN.

"The military is a market we've been working in for last ten years. We have 600 installations of this system, over 600, all across the world. But suddenly we are seeing interest from the civil world. And we are seeing this from civil organisations like the UN that are looking to get the benefit of a missile protection system. We are seeing it from the VIP world as well. A lot of VIP, presidential aircraft want to be protected as well. So we have today MACS being installed on helicopters, we have the MACS with the AMPS (Airborne Missile Protection Systems) system installed on VIP such as a Boeing 737. And it opens new opportunities", said Shaul Mazor, Vice President of Marketing and Business Development at Bird.