MILAN/ABU DHABI --- Europe’s only commercial maker of military drones, Italy-based Piaggio Aerospace, has lost its sole customer after going into bankruptcy in a setback for Italian ambitions to challenge U.S. and Israeli firms in a fast growing industry.
Piaggio, a unit of Abu Dhabi’s sovereign fund Mubadala, competes with firms such as U.S. General Atomic, Northrop Grumman (NOC.N) and Lockheed Martin (LMT.N) as well as Israel’s Elbit Systems ELST.TA and Israeli Aerospace Industries (IAI).
The market for military drones is estimated to be worth between $6 billion and $10 billion in 2018, but analysts say it is set to increase sharply over the next decade.
This month, United Arab Emirates canceled an order placed through state-owned defense company ADASI with Piaggio Aerospace for eight unmanned P1HH drones, a Mubadala spokesman said, adding the decision was made due to “delays and failures of the agreed programs”.
One source familiar with the matter said the order had been worth 400 million euros ($454 million), a figure which included development costs borne by the Italian company.
ADASI could not be reached for a comment while Piaggio Aerospace declined to comment. (end of excerpt)
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