The Future of the Civil and Military UAV Market

April 2011

The Future of the Civil and Military UAV Marketovic, By:

By: Marko Lukovic, Principal Consultant, Aerospace, Defence & Security

The speed of development and growth of UAV use has been uneven across global regions with US

and Israel still very much leading the way. However, experience of using mature UAV systems on

operational deployment has dramatically improved the understanding of the usefulness of UAVs in

Europe and Asia/Pacific and this in turn is driving a steady growth rate across the military segment.

The success of UAVs in providing real-time information to military commanders has contributed to

both mission effectiveness and in protecting personnel. It is UAV’s effectiveness in these roles

which has encouraged most advanced militaries to fully commit to the use of them and this will

drive rapid market growth during the next ten years.

Figure 1: Expected Military UAV Revenues - Europe

Over the last decade, UAV manufacturers have moved beyond pure military sales and have shown

a significant amount of interest in potential UAV applications in civil and commercial markets. In

line with the prevailing trends across the defence sector, the military has acted as a first adopter

of UAV systems and has demonstrated their utility, encouraging the idea of their use in a large

number of non-military applications ranging from law enforcement and border security to earth

observation and communications.

Historically, industry has often been accused of unrealistic optimism in expecting the rapid

emergence of a viable civil and commercial UAV market. However, at the same time industry has

played an effective advocacy role in driving initiatives in the area, particularly in Europe and to some

extent North America.

© 2011Frost & Sullivan Page 2Market Insight

The Future of the Civil and Military UAV Market

Source: Frost & Sullivan

1600

1400

1200

1000

800

600

400

200

0

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

TUAV MALE HALE MUAV

Million $

Challenges and Solutions

It is fairly clear that the market potential on the civil side is considerably larger than the military

sector in the long term. However, at the moment there are major constraints: lack of a central

procurement authority for government applications; absence of legislation and regulations for safe

flight in integrated airspace; dispersed and highly heterogeneous potential customer base; to name

but few. In addition, initiatives to promote and facilitate the use of UAVs in non-military

applications have been relatively un-coordinated and ad-hoc in nature.

Over the last three years work has began in earnest to kick-start the civil UAV market through a

number of initiatives at national and European level and in cooperation with military users. These

initiatives are primarily aiming to deal with the key problem which is the lack of a framework of

rules governing the flight safety on the one hand and insertion of civil and military UAVs in non-

segregated airspace on the other.

A whole range of legislative and regulatory measures need to be designed, mutually agreed and

then implemented. These rules will in turn be founded upon certain essential technologies, the

most notable being a reliable, light, low-power and cost-effective Sense and Avoid (S&A) system,

which would eliminate the possibility of a mid-air collision between aircraft: manned or unmanned.

Both the legislators and industry are striving towards a goal of achieving a capability that would

allow UAVs to operate at an Equivalent Level of Safety to manned aircraft. Until this goal is

reached UAVs are required to fly either with a special military or an ad-hoc Civil Aviation

Authority exemption, or in segregated airspace. At the moment, rules vary from one country to

another, an incoherence which makes things more difficult for manufacturers and operators alike.

However, some rules have been put in place. On the civil side, airframes with a mass of more than

150 kilos are now required to obtain airworthiness certification at a European level from the

European Aviation Safety Agency (EASA). On the military side, the French Military Procurement

Agency (DGA) have also developed UAV Systems Airworthiness Requirements for fixed-wing

UAVs, which has been adopted as the basis of NATO’s STANAG 4671.

Another important issue is that of radio frequency allocation. Currently, there are no particular

areas of the RF spectrum allocated exclusively to UAV operations, which has already caused

significant problems in the military use of UAVs. As with airspace exemptions, access to suitable

areas of the frequency spectrum is granted, according to availability, by the local, national authority

on an ad hoc basis. The assignment of appropriate slices of the spectrum, for UAV command,

control and datalinks, will be an agenda item at the International Telecommunications Union

conference that will take place later this year though it is not yet clear whether it will be resolved

fully.

© 2011 Frost & Sullivan Page 3Market Insight


Training

The final but by no means less important part of the UAS puzzle is the issue of pilot training and

certification. As with the UAV platform, future users as well as platform manufacturers have to

prove that UAV pilots can train and operate with an equivalent level of safety as the on-board

pilots. As was the case with development of UAS platforms, it is the militaries that have been

leading the way in terms of rules, pilot certification processes, roles and training and simulation

requirements. This is particularly the case in US which has the largest operational fleet of large

UAVs such as MALE and HALE. With increasing operational experience the US Armed Forces have

been fine-tuning the training programme and requirements for UAV pilots as well as the final

qualification and the ability to operate within the government segment outside Armed Forces.

The current approach in Europe has been set by EASA which divides UAV pilots into two classes:

line of sight (Class 1); and beyond line of sight (Class 2) and is working on pilot certification issues.

The current view is that UAV pilots will be treated differently from on-board pilots in terms of

skills and requirements but that their training curriculum will be largely similar. UAV manufacturers

as well as training and simulation companies have been working on synthetic environment training

for military UAV pilots which is easily transferable to civil UAV pilot training. Based on military

experience, a novelty that UAVs will bring into the pilot training arena is the sensor operator

training that also needs to be taken into consideration as it has a completely separate set of

requirements. These roles are expected to become the norm on the civil side once larger civil

UAVs are allowed to fly freely and sensor operators will need to be trained and certified

separately.

© 2011 Frost & Sullivan Page 4Market Insight

The Future of the Civil and Military UAV Market Source: Frost & Sullivan

ATM and Airworthiness Certification (EUROCONTROL)

Evolutionary, iterative development of a regulatory framework governing usage of civilian UAS in European

controlled airspace (based on MASPS, then MOPS produced from WG-73 and RTCA’s SC-203 recommendations)

Phased approach to introduction of regulations and standards

Ad-hoc exemptions replaced by the phased introduction of standards and

regulations, each with limited coverage, as and when these are agreed and

become available

Regulation (EUROCONTROL)

Initial promulgation of legislation based

on the above recommendations

Radio Frequency (RF) Spectrum and Bandwidth Allocation (ITU)

Initial discussions towards agreement on allocation of RF Spectrum for

European Civilian UAS at ITU conference (WCF) in 2011

Technology (EDA. EUROCAE)

EDA project MIDCAS to develop working S&A technologies by

2012-2015

No national, European nor global strategy

or framework for UAS RF allocation.

(Local solutions only, on demand)

Emerging Propulsion and Materials Technologies

Introduction of fuel cells and revolutionary aerodynamics such as variable aerofoil and increasing use

of lighter, composite materials

Principal factors governing the evolution of the European civilian UAS market

A rough guide to when the principal elements are expected to begin develop.

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

and beyond

Conclusions

Military UAS operations have now become the norm in almost all important deployments and

military UAVs are leading the way in terms of standards, certification and pilot training.

However, in the long term the civil and commercial UAS market has the potential to grow larger

than its military counterpart. It will take a considerable amount of time for experience and the

successful use of UAS in military and a wide range of non-military applications to diffuse across

a dispersed customer base. For this to happen, a set of hurdles for the future of the market

must be overcome: UAS must show that they are more cost effective than current solutions;

they must be seen as more effective at completing specific tasks; and they should prove at least

as safe as presently available manned systems both in terms of platform safety and pilot training.

Finally, they should be able to offer new capabilities that currently do not exist. Once these

factors are in place there are unlikely to be any other significant impediments to a large and

vibrant UAS market that would include a wide variety of platforms and services.

© 2011 Frost & Sullivan Page 5

About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth

and achieve best-in-class positions in growth, innovation and leadership. The company's

Growth Partnership Service provides the CEO and the CEO's Growth Team with

disciplined research and best-practice models to drive the generation, evaluation, and

implementation of powerful growth strategies. Frost & Sullivan leverages 50 years of

experience in partnering with Global 1000 companies, emerging businesses and the

investment community from over 40 offices on six continents. To join our Growth

Partnership, please visit http://www.frost.com.

[email protected]

http://www.frost.com

http://www.aerospace.frost.com

Oxford

4100 Chancellor Court

Oxford Business Park

Oxford, OX4 2GX, UK

Tel: +44 (0) 1865 398600

Fax: +44 (0) 1865 398601

London

4, Grosvenor Gardens,

London SWIW ODH,UK

Tel 44(0)20 7730 3438

Fax 44(0)20 7730 3343

Market Insight
