Greece and Israel deal spotlight leasing model for military UAVs

By: Seth J. Frantzman

JERUSALEM — Greece's Hellenic Ministry of National Defense will lease unmanned aerial vehicles from Israel, in a deal that offers up an alternative to pricey acquisitions amid budgetary constraints.

The Heron long endurance drones, manufactured by IAI, will be used for border defense under a leasing model that IAI said may grow more appealing with the new pandemic dynamics that countries face.

Executive vice president and general manager of AIA's Military Aircraft Group, Moshe Levy, praised the new deal with Greece as "yet another example of the successful leasing model promoted by IAI in many parts of the world.”

Greece will have an option to purchase the Herons after the lease term ends in three years. The Heron is one of the most popular of IAI UAVs, which have collectively seen 1.8 million operation flight hours with over fifty partners worldwide, the company says. IAI could not comment on the overall value of the lease agreement.

The twin-boom Heron comes in several models, including the smaller tactical Heron unveiled in 2019, and the longer endurance Heron MK II unveiled this year. With development roots in the early 1990s, the larger Heron UAVs have been active with the Israeli Air Force since the early 2000s and been used by countries such as Turkey, India, Australia, Singapore, Azerbaijan and Germany. Greece and Israel have become closer partners in defense and maritime relations over the last decade.

The Heron lease for Greece will include a unique maritime configuration with sensors and communications designed to monitor the extensive water borders of Greece. Levy says that Israel sees this maritime security model as an important market.

The coronavirus pandemic has made countries increasingly aware of the need to control borders, Levy said, creating newfound demand for large surveillance UAVs like Heron. The flexibility of lease agreements with operations outsourced allows customers to get the data they need to secure borders, but without the overhead of ownership or the large logistical footprint.

Levy points to previous lease agreements, such as a $600 deal in 2018 with Airbus and Germany to lease Heron TPs. Those leased Herons saw more than 30,000 hours of flight time in Afghanistan.

“We supply the birds [UAVs] and the maintenance and another company takes the bird and puts it in the air," Levy said. “The customer just does the mission and get the data.” Lease agreements were signed with Australia and Canada over the last decade as well.

“We assume after coronavirus, budgets will shrink and people will look for different solutions and things that are simpler, and less costly, so the lease option can meet the needs,” Levy said, particularly for states that want only a few large UAVs, without the overhead of operations and training.

Israel was the world's largest exporter of drones through 2013, bringing in more than $4.6 billion in sales between 2006 and 2012 and selling UAVs to more than two dozen countries. However, China has rapidly increased its military drone sales to become one of the largest exporters last year. At the same time, UAV sales are increasingly a smaller percent of Israel's overall defense exports, illustrating a changing market.

“We have to adapt and manage our portfolio. We are offering a wide variety of platforms,” says Levy.

The new Heron MK II, with a wingspan of 16 meters, weighs 1,300 kg and can reach an altitude of 35,000 feet for up to 45 hours. It has a new more powerful Rotax 915 iS engine, says Levy, who pointed to increased demnd for versatile vertical-takeoff and landing (VTOL) options or UAVs that require only a short runway.

https://www.defensenews.com/global/europe/2020/05/08/greece-and-israel-deal-spotlight-leasing-model-for-military-uavs/