Industrial partners Airbus and Dassault Aviation last month cut an offer to between €7 billion-€8 billion ($7.8 billion-$8.9 billion) from a previous price tag of some €10 billion, to win a production contract for a European medium-altitude long-endurance drone, an industry source said Jan. 9.
The partners slashed the price of their bid to build a twin-engined unmanned aerial vehicle after the four client nations — France, Germany, Italy and Spain — made it clear the initial price tag was too high, the source said.
Airbus is prime contractor, with French Dassault and Italian Leonardo as partners.
The new price is seen as acceptable and opens the debate on who and how an announcement will be made, the source said.
The program manager, European agency OCCAR, or the French arms procurement, Direction Générale de l’Armement, could announce the deal, the source said. Another possibility was for industry to make an announcement.
The DGA declined comment.
Industry presents the UAV as one of the key cooperative projects to boost European arms capability and boost autonomy. France has made it clear that a big price cut was needed to secure the deal.
“There is a major problem on price,” said a Nov. 21 parliamentary report from French senators Cédric Perrin and Hélène Conway-Mouret.
“It appears that there is a spread of close to 30 percent between the price set by the client states, in view of the specifications set in 2017, and the price offered by industry,” said the report on the 2020 budget from the committee for foreign affairs, defense and the armed forces.
In view of a price too high, the partner nations might buy a foreign UAV off the shelf and install a national payload, the report said. That might spark opposition but the fact was that the price sparked sharp debate.
“Industry and the DGA must reach an agreement before the end of the year, otherwise the program will be compromised,” the report said.
An offer has been submitted to OCCAR, Eric Trappier, chairman of GIFAS, the French trade association for aeronautics and space, said at the new year press conference.
“This is a major contract,” which will cover research and development, production and delivery, he said. The project might interest other European nations, he added.
There had been many meetings for negotiations all through 2019, he said, adding that it was important for Europe to acquire this equipment, which he hoped would be backed by financial support from the planned European Defense Fund.
Meanwhile, there was close prospect of a contract for a technology demonstrator for a New Generation Fighter, a key element in the Future Combat Air System.
“Call me an optimist, but the contract for the first phase should be signed in the next few days,” he said.
“We are in the process of notification. There is no problem.”
That was a deal which should have been sealed in 2019, as industry had submitted an offer in June, he said.
Work started in the last quarter of last year to bring Spain into the fighter project and engineers in the three partner countries — France, Germany and Spain — should start soon, he said.
A budget for the development project had yet to be agreed, he said.
The new fighter is due to operate in 2040, with the demonstrator expected to take off in 2026.
“We are right at the beginning,” he said. That is of “fundamental” importance as there was not a program if there was not a start, he added.
Trappier said he constantly told the DGA there was need to build a demonstrator, to cut risk to the program. Such a de-risking could not be done simply on paper and required “the reality of flight” to test the technology.
Now it was time to “mobilize” the budget, energies, and agree the industrial work share, he said. Cooperation between Airbus and Dassault — the lead industrial partners — was not easy but they managed, he added.
It was also important to factor in the supply chain in France, Germany and Spain.
On a new engine for the fighter, Safran and MTU said in a Dec. 3 joint statement the partners had agreed the French company would be prime contractor. The agreement resolved an attempt by the German partner to take a leading role on the project.
The pact referred to the letter of intent signed in February 2019 which said Safran would take the lead in engine design and integration, with MTU leading in engine services.
“In the framework of the contractual scheme defined by France and Germany, Safran Aircraft Engines will be the prime contractor and MTU Aero Engines the main partner for the first phase of research and technology (Phase 1A),” the joint statement said.
The two companies will set up a 50/50 joint venture by the end of 2021 for development, production and service of the new engine.
On the proposed €13 billion for the European Defense Fund, that amount might fall as the overall multi-year budget of the European Union will shrink with the departure of the UK, Trappier said.
France and Germany said in a joint statement at the Oct. 16 bilateral summit in Toulouse, southwest France, the two nations reaffirmed their support for industrial cooperation, in particular the Next Generation Weapons System/Future Combat Air System and Main Ground Combat System programmes.
The latter refers to a system of systems comprising a new tank and a network of manned and unmanned land vehicles.
The photo is from 2018 and shows a full scale model of the proposed European medium-altitude long-endurance drone.
According to an article by Mike Ball published on April 30, 2018: “Airbus Defence and Space has announced that, in conjunction with Dassault Aviation and Leonardo, it has unveiled the first full scale model of the European Medium-Altitude Long-Endurance Remotely Piloted Aircraft (MALE RPAS) at the 2018 ILA Berlin Air Show.
“The unveiling of the full scale model and the reaffirmed commitment of the industrial partners to jointly develop a sovereign solution for European Defence and Security comes after a nearly two-year definition study launched in September 2016 by the four participating nations, Germany, France, Italy and Spain, and follows the Declaration of Intent to work together on a European MALE unmanned aerial system signed by the countries in May 2015.”
Also see the following report which brings together the articles by Pierre Tran, based in Paris, published in 2019 on Second Line of Defense.
A PDF Version of the report can be read below:Updates from Pierre Tran 2019
An e-book version of the report can be read below: