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Drone Intelligence is Changing the Face of Military and Defense Operations

17 Aug Drone Intelligence is Changing the Face of Military and Defense Operations

The Business for Unmanned Aerial Vehicles (UAV) or Drones is burgeoning. They are now being extensively used, outside the purview of their original intent and purpose such as capturing aerial photographs or offering an unparalleled entertainment experience. However, the amalgamation of Drones with path breaking Virtual Reality (VR) technology is redefining the game in various fields, with drones now finding applications in areas such as military and defense, agriculture, engineering and construction.

In 2015, the Federal Aviation Administration heralded a new era for drones, by granting exemptions to companies engaged in construction, agriculture, insurance to operate drones in the U.S, while also making it mandatory for online registration of drones. The possibilities of its applications range from aerial inspections of mammoth infrastructural facilities such as dams and nuclear reactors, to use in space and capacity optimization in construction industry.

Image Source: Unsplash

According to a report by Business Insider Intelligence, the sales of drones will be over $12 billion in 2021 growing at a CAGR of 7.6% from $8.5 billion in 2016. The growth will be majorly fueled by three segments namely consumer drone shipments, enterprise drones/ commercial drones and government drones. The use of drones in military and defense applications involves their use in monitoring, surveying and mapping and has extensive application in reconnaissance, surveillance and intelligence.

A report by markets and markets estimates that the military drones market will reach USD 26.8 billion by 2025 from USD 12.1 billion in 2018, growing at a CAGR of 12.00%. We take a look at few companies that are spearheading technological innovation in this field.

Arotech Corporation (NASDAQ: ARTX)

Market Cap: $60.53M; Current Share Price: 2.27 USDChart
Data by YCharts

The company creates cutting-edge products for the defense and security needs in military and security markets. The company has numerous divisions which cater to the need of multiple customer requirements such as its Power Systems division that creates portable energy solutions for clean energy power generation, power distribution and management, military field equipment to life-vest lights, satellite radios and unmanned vehicles, primarily targeted at the military, aerospace and industrial customers.

Arotech manufactures batteries for UAV’s to suit the specific requirement of clients through its Epsilor brand and has clients including the U.S military and Elbit. Its high power zinc-air batteries are used in the U.S Military drones and the company is believed to be the sole supplier of this technology to the U.S. military. In Nov 2018, the company received an order to develop special chargers for batteries which power UAVs (Unmanned Aircraft Vehicles) worth in excess of $700 thousand. These batteries can work under harsh environments and support advanced battery management capabilities including battery testing and refreshing as per a company statement.

The company’s training and simulation wing develops trainers and simulators for military, security and commercial use. It creates vehicle simulators and research simulators for military operations and training for emergency scenarios, where quick judgment under extreme pressure is required.

Some of the products that Arotech manufactures are its Epsilor range of batteries for military and submarine applications, EFB range of custom portable power chargers, electric fuel water-activated lifejacket lights, SWIPES range of soldier-worn power distribution system for Warfighters individually carried equipment, FAAC range of training simulators and Milo response range of Intensified Situational Training for EMT, EMS and Paramedics to name a few.

AeroVironment (NASDAQ: AVAV)

Market Cap: $1.23B; Current Share Price: 51.43 USDChart
Data by YCharts

AeroVironment has developed a portfolio of small, unmanned aircraft systems (UAV’s) that address the need for tactical intelligence, surveillance and reconnaissance (ISR) to people working in areas such as military, security and emergency services. The company manufactures Puma™ AE, Raven® and Wasp® AE, tactical UAV’s that work with advanced payload of electro-optical or infrared sensors to wirelessly transmit crucial information to portable ground control systems (GCS).

Image Source: Company

The systems can be assembled from scratch in less than five minutes and require minimal training to launch operate from a hand-held device. The systems are powered using electric motors, with replaceable modular battery packs that are easily changeable and user–friendly, leading to an efficient and uninterrupted service. The system allows for manual or predetermined GPS-based autonomous navigation using operator-designated waypoints. These systems are durable, efficient and reliable and have less training time and costs as compared to conventional systems.

The company’s products include VAPOR Helicopter systems, known for its best-in-class performance, endurance and payload flexibility, indicated for defense, commercial and industrial applications. In addition, it manufactures LRTA (Long Range Tracking Antenna System) that offers long-range command and control of an aircraft along with features such as payload, video display and recording, mission planning, real-time moving map display, status information, and high-resolution image capture. Furthermore it has a range of UAS , namely RQ-11B Raven®, Wasp® AE RQ-12A and Puma™ 3 AE.

In June 2019, the company acquired Pulse Aerospace, LLC, for $25.7 million in cash, including milestone-based payments of $5 million. This is a strategic move that will help AeroVironment strengthen its family of fixed-wing small unmanned aircraft systems (UAS), by leveraging Pulse expertise in small VTOL UAS technology in the United States. Its proprietary HeliSynth™ technology offers flight control, payload, and endurance capabilities to both defense and commercial end markets. The company recently received a $13 million multi-year contract award from an undisclosed defense customer for its Vapor unmanned VTOL systems, spares and services.

Kratos Security and Defense Solutions (NASDAQ: KTOS)

Market Cap: $1.89B; Current Share Price: 17.85 USDChart
Data by YCharts

The company manufactures cutting-edge unmanned aerial systems and aerial target systems including training and logistics support. The company’s range of unmanned aerial systems includes BQM-167AAir Force Subscale Aerial Target (AFSAT) touted to be the only subscale aerial target platform operated by the U.S. Air Force. It can carry an array of payloads such as scoring, identification friend or foe, passive and active radar augmentation to name a few. Additionally it manufactures BQM-167i, the world’s most realistic end-to-end weapons-release training systems.

Image Source: Company

Kratos also manufactures BQM-177A, a Sub-Sonic Aerial Target (SSAT), used by the NAVY and unarguably one of the best high-subsonic, sea-skimming anti-ship cruise missile threat emulation. It also makes an exportable variant namely BQM-177i. MQM-178 is another offering from the company that fulfills the need for an end-to-end weapons-release training system providing surface-to-air and air-to-air emulation.

Furthermore, the company also designs and manufactures vector and scalar scoring systems; radar cross-section enhancement devices, and various infrared and electronic countermeasures payloads to meet the specific weapon and training requirements

Kratos uses the Rocket Assisted Takeoff (RATO) or pneumatic launch techniques for designing and developing reliable launch solutions. It also provides comprehensive ground launch support solutions such as transportation trailers and maintenance carts, target test sets, ground control stations and launch equipment. Lastly it also offers recovery services with emphasis on cost and minimal damage.

The company also offers advanced composite solutions offering comprehensive engineering and manufacturing solutions for composite components and structures.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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