By Richard Sterk, Senior Defense Analyst, Forecast International
Hunting submarines hasn't been sexy since the end of the Cold War. Yet ironically, Sterk sees an irony tracking non-nuclear-propelled submarines in coastal waters is many times more challenging than stalking a big, lumbering Soviet boomer.
Forecast International's "The Market for Airborne ASW Sensors" examines nearly 50 of the leading airborne anti-submarine warfare sensors worldwide and reviews 10 of the leading companies involved in producing such systems. This report projects an airborne ASW sensors market worth at least $2.470 billion over the next 10 years, based on development and production of these roughly 50 sensors.
This analysis examines programs and systems considered to be representative of the world airborne ASW sensor market. Both system production and value forecasts are provided, as are value forecasts for non-physical items such as R&D programs, advanced technical demonstrations, and network integration.
More specifically, the value of the programs covered by the study will total $429.42 million in 2012 and then decline to $119.44 million in 2021. The market begins to decline in the first half of the forecast period. The market has a projected worth of $429.42 million in 2012 and then drops in value to $238.85 million in 2016 – a roughly 44.37 percent ($190.57 million) drop. The second half of the forecast period – 2017 through 2021 – fares even worse, with a projected 50.57 percent ($122.19 million) market decline.
As this analysis is limited to covering a sampling of existing and future programs, the projected 72.18 percent ($309.98 million) decline in sales between 2012 and 2021 indicates that nearly three quarters of the programs examined will be completed by the end of the 10-year forecast period.
The market begins to decline right from the start, in the first half of the forecast period. The market has a projected worth of $429.42 million in 2012 and then drops in value to $238.85 million in 2016 – a roughly 44.37 percent ($190.57 million) drop. The second half of the forecast period – 2017 through 2021 – fares even worse, with a projected 50.57 percent ($122.19 million) market decline. In addition to defense budget cuts and economic conditions, some of this decline can be attributed to a wind-down in production, with the AQS-22 being one case in point.
Among the companies reviewed in this analysis, Raytheon, Griffon Corp's Telephonics Corp, L-3 Communications, CAE, and Thales are projected to be the top five airborne ASW sensors companies over the next 10 years based on forecast sales volume and percentage of market share. Raytheon will be the leading airborne ASW sensors firm within this sample group during the forecast period with 35.66 percent of anticipated 10 year market share, valued at $880.90 million. Griffon Corporation's Telephonics Corp will be number two, with 18.37 percent market share, representing $453.72 million in value. L-3 Communications is third with a projected 8.72 percent of the airborne ASW sensors market, representing a 10-year sales total of $215.40 million. CAE comes in fourth with a market share of 7 percent, representing $172.90 million in value. Rounding out this survey at number five is Thales, which is forecast to garner 5.62 percent of the market, worth approximately $138.80 million, over the next 10 years
Airborne platforms are some of the most mobile, flexible and cost-effective anti-submarine warfare systems available today. Whether they are shore-based long-range maritime patrol aircraft or ship-based short range helicopters, aircraft form the primary means of defense against a submarine attack and are the key weapon in an offensive against enemy submarine forces. They owe this position to a synergistic range of capabilities that provide an unchallenged series of tactical options for an ASW operator.
Aircraft feature the mobility required to quickly counter developing threats and exploit fleeting contacts and are equipped with sensors that enable them to re-acquire and prosecute contacts. They also have the ability to carry a range of weapons that have a reasonable capability against most types of submarine. Even better from the aircraft crew's point of view, the submarines they are hunting can't shoot back – or at least not now. That situation may change within the period covered by this forecast.
Ironically, this primacy of aviation assets as an ASW tool has evolved despite the extreme difficulties facing the sensors such aircraft deploy. Aircraft, by their nature, fly above the sea; submarines, by their nature, sail underneath it. Between the two is a virtually impermeable barrier that defeats most attempts to detect one from the other. Under certain circumstances, aircraft can visually detect submarines; under equally constrained circumstances, submarines can hear aircraft. Anything more than that represents the interesting technical challenge that drives the market for airborne ASW sensors.
Overall, trends in the ASW sensors market (particularly the airborne ASW segment) continue to reflect trends in the submarine and related undersea warfare markets. Emerging international trends have sidelined ASW. While the U.S. undersea warfare segment does have its role in the war on terrorism, it is very much secondary to the surface warfare, land attack, and special operations/special projects sectors. Airborne ASW is now a long way down on the list of priorities. However, it will not always remain so, and the extensive research and development funding being expended will lay the groundwork for coping with future threats.
Upcoming defense budgets will be tight – very tight. Normally, defense market segments follow an accordion cycle of funding, shifting from a concentration on production to R&D then back to production and so on. This ebb and flow was greatly interrupted by the events of 9/11 and then the conflicts in Iraq and Afghanistan. Production, especially by the United States, was accelerated by as much as 60 percent to get much needed equipment into the field as quickly as possible. This acceleration in production came at the price of R&D in both scheduling and funding.
Now that production is winding down (everything that was needed for the field is either there or nearly there), the normal pattern would be a shift to an increased emphasis on R&D (and thereby, funding). However, because many parts of the world have yet to recover from the Great Recession, governments simply don't have the money for new R&D and are cutting back on even essential items. With every penny in national budgets having to be justified 10 times over to ensure an investment will produce results, no one is going to pump millions upon millions of dollars into flushing out a concept that might not pay out.
Governments have borrowed from the future but unfortunately, the future is here. Until the overall economy improves, R&D will be very limited and imagination (technology-wise) stifled. Any technology innovation will have to come from the private sector, which will reap the rewards.
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Richard Sterk is a Senior Defense Analyst at Forecast International. His areas of expertise include C4ISR, Land & Sea-based Electronics, Naval Systems, and Undersea Warfare. The market analysis "The Market for Airborne ASW Sensors" is available from www.forecastinternational.com.
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