By the Blouin News Business staff

Euro-drone: a defense comeback for Europe?

by in Europe.

A French-owned Reaper drone in Niamey, Nigeria, on January 2, 2015. DOMINIQUE FAGET/AFP/Getty Images

One of France’s U.S.-built Reaper drones in Niamey, Nigeria, on January 2, 2015. DOMINIQUE FAGET/AFP/Getty Images

France, Germany, and Italy signed an agreement on Monday to carry out a two-year operational study worth €1 billion to lay the foundations for building a “Euro-drone” by 2025. Along with surveillance and reconnaissance, the unmanned aerial vehicle (UAV) will also be used for civilian purposes such as disaster monitoring, firefighting, and border control, according to the International Business Times.

European countries have been relying on American and Israeli-manufactured drones, which has not gone over well with European defense firms. Eric Trappier, the chief executive of France’s Dassault, said last year that the French government’s purchase of the Reaper drone (built by U.S.-based General Atomics) had “slightly traumatised us.” The Euro-drone, therefore, is an effort to help European defense firms catch up and make the continent more self-sufficient when it comes to defense. “The goal of the Euro-drone is that we can decide by ourselves in Europe on what we use it, where we deploy the Euro-drone and how we use it,” said German Defense Minister Ursula von der Leyen at the signing. “This makes us, the Europeans, independent.”

Previous attempts by European firms to collaborate on drone development have failed due to a lack of government support and competing national needs, with simultaneous national drone programs being given higher priority. However, the European industry seems to have turned a corner. Airbus, Finmeccanica, and Dassault, the same three European defense firms that called in vain on European governments to back the development of a medium-altitude, long-endurance (MALE) drone in 2013, will now carry out the two-year technical study. Potential customers (including their countries’ armed forces and procurement agencies) will be consulted to define the needs and capabilities of the Euro-drone, and at the end of the two years a decision will be made on whether or not to start actual development.

Spain and Poland have expressed interest in joining the Euro-drone plan, although Britain has roundly rejected it, due largely to the estimated $65 million price tag entailed for British taxpayers. (Britain and France are already in the early stages of studying the potential of a combat drone, although it wouldn’t be ready until the 2040s, if ever, according to the Financial Times).

The future UAV market is set to keep growing rapidly, and snagging a piece is an enticing prospect for European firms. The entire global defense and security UAV market grew from $4.7 billion in 2010 to $5.9 billion in 2015, and IHS expects it to reach $11.1 billion by 2024. (And other countries such as India and South Korea are also developing their domestic drone industries, while China and Russia are investing heavily in expanding their own.)

Still, if the Euro-drone is ten years off (assuming no delays, which in the defense contracting world is quite rare) it will be hard to catch up to existing operational drones that are steadily advancing with real-world tests. All signs point to government subsidies supporting European drone R&D, short- and long-term. Granted, national champions and subsidized flagship projects are by no means unheard of in the defense sector. But Europe will have an uphill battle if it eventually tries to export its Euro-drone beyond the collaborating firms’ home countries. The reason, quite simply, is that the U.S. and Israel both have many years of experience using drones for surveillance and combat, a crucial and enduring comparative advantage.