Teal Group: Will Northrop’s CIRCM dominate a $10 billion market?

Teal Group’s Market Overview forecasts the 10-year market for Directed Infrared Counter Measures (DIRCM) systems and Missile Warning Systems (MWS) for helicopters and slow-flying fixed-wing (non-combat jet) aircraft to be worth about $10 billion over the next decade. The market has settled out somewhat in the past few years, with two major new programs finally entering production – CIRCM for the US Army and DAIRCM for the US Navy – while the US Air Force soldiers on with upgrading its thousands of legacy LAIRCM systems for large aircraft (up to C-17s). But there are also interesting possibilities for new markets, with three “Future” programs in Teal Group’s individual reports in the MEB. Additionally, the new LIMWS (Limited Interim Missile Warning System) Quick Reaction Capability (QRC) for Army helicopters will unexpectedly bring BAE Systems back into the DIRCM/MWS fold in a big way, following the disastrous end of its earlier ATIRCM program. Confused by the acronyms? Then read on, and see the MEB for the full, detailed forecasts. LAIRCM’s Successor as Dominant DIRCM: CIRCM? Or will CIRCM Repeat ATIRCM’s Delays? For a bit of history – and an ex-planation of why Northrop Grumman’s USAF AN/AAQ-24(V) LAIRCM (Large Aircraft IRCM) is still the world’s only DIRCM pro-gram that has seen major production, we need to look at the US Navy and Army’s continued failed at-tempts to produce their own systems for small aircraft. Both Navy and Army have needed a DIRCM system for two decades and still don’t have one, while from its SDD contract to Northrop in September 2001 through early 2022, LAIRCM has been installed on 54+ aircraft types and over 1,200 aircraft. Teal Group forecasts that even in its maturity over the next decade, LAIRCM will still be worth about $1 billion to Northrop Grumman as prime. But way back in the mid-2000s, the Navy wanted a full Assault DIRCM (ADIRCM) suite for almost 1,000 small and large helicopters and the MV-22. IOC for the full DIRCM system was originally planned for FY15, but then the Army took over as lead developer (for both the Army and Navy) of a redesignated Common IRCM (CIRCM) program. CIRCM became essentially a next generation, smaller and lighter ATIRCM (Advanced Threat IRCM), since BAE Systems’ Army ATIRCM had never reached series production after more than two decades of continuing development problems. In August 2015, Northrop Grumman finally won the CIRCM engineering and manufacturing development (EMD) and low-rate initial production (LRIP) contract, beating BAE Systems for this potentially huge “common” program. In February 2016, the FY17 OCO budget funded initial production of 76 CIRCM B-kits for Army and Special Operations Forces, to be delivered beginning in November 2017, at a rate of 10 per month. At the time, the overall Army Procurement Objective (APO) for CIRCM was 1,076 (B-Kits only), potentially worth more than $3 billion, and the Navy still also wanted nearly 1,000 DIRCM systems for helicopters and light aircraft. As ATIRCM & Navy JATAS Disappear (Only CIRCM Now) By late 2014, ATIRCM – the original planned “common” IRCM – was finally definitely dead, at least in the non-classified budgets. And as of early 2014, the US Navy’s JATAS (Joint Allied Threat Awareness System) missile warning system (MWS) had been folded into CIRCM, transferring future JATAS funding to CIRCM. Northrop’s CH-53E LAIRCM with two laser jam heads weighed 193 lbs. and BAE’s Chinook ATIRCM weighed 160 lbs., both with all-up weights of around 350 lbs. including cabling and A-kit aircraft mods. CIRCM’s planned weight was just 85 lbs. with two jammer turrets, with a maximum weight including A-kit of only 120 lbs. for smaller helicopters such as Apaches and Black Hawks, and 155 lbs. for the Chinook and V-22. CIRCM utilises a modular open system approach (MOSA) to integrate jammers, MWS, and missile trackers. The LAIRCM and ATIRCM are federated systems, with single-purpose sensors and countermeasures linked through proprietary interfaces. Overall, the US seemed to be serious about the need for CIRCM and content with its capabilities, just perhaps not in as big a rush as previously claimed (the initial CIRCM B-kits to be delivered in 2017 were not final configuration versions, with procurement funding budgeted to shrink to only $6.3 million in FY18). On the other hand, this “serious but not immediate” need was also the case throughout 20+ years of ATIRCM development, so Teal Group forecast that CIRCM funding would stay strong, but actual production might continue to be delayed. In terms of CIRCM production numbers, it was also the same ATIRCM promise all over again. In July 2010 the Defense Acquisition Executive (DAE) directed that CIRCM provide the sole acquisition of future laser based infrared countermeasure systems for all rotary-wing, tilt-rotor, and small fixed wing aircraft across the Department of Defense. But by late 2016 we had still not seen any production systems, and ATIRCM itself was only pro-cured for fewer than 100 US Army CH-47 helicopters. The Navy Cheats a Little (Wisely): Leonardo’s DAIRCM Enters Production Thus, perhaps it should not have been totally surprising (but it was) that despite public dedication to the joint CIRCM program, the Navy continued to develop Assault DIRCM somewhat on the sly – or as the Navy budget reported, “PMA 272 has funded this Future Naval Capability (FNC) since 2006 as a risk mitigator for both JATAS and the CIRCM system.” By February 2016, an early production system was ready and funded in the FY17 OCO procurement budget with $27.5 million for 12 systems to be installed in 2017-18 on three different helicopter types – the USMC’s AH-1Z and UH-1Y, and the Navy’s MH-60S. The unit cost, installed, seemed to be about $2.3-2.4 million. The new system, then still referred to as ADIRCM but now designated the AN/AAQ-45 DAIRCM (Distributed Aperture Infrared Counter Measures), is being produced by [Leonardo-owned] DRS Technologies and [Leonardo-owned] Daylight Solutions (who also produce the lasers for CIRCM). In August 2019, the Navy completed the first phase of DAIRCM missile warning testing using MH-60S and AH-1Z helicopters at Hot Springs, VA, to support the Navy’s DAIRCM Quick Reaction Assessment (QRA). Then in March 2020, NAVAIR awarded Leonardo DRS a $16.4 million contract option to procure 114 DAIRCM sensors and 29 DAIRCM processors, specifically 64 sensors and 16 processors for the Air Force, 30 sensors and eight processors for the Navy, and 20 sensors and five processors for the Army. But development – not production – continued. In June 2020, NAVAIR awarded Leonardo DRS a $120 million contract to provide DAIRCM engineering models, and by April 2022 the US Navy still planned FY23 RDT&E funding for acceptance and testing of four Engineering Development Models (EDMs). And in April 2022, a separate production contract was planned to be awarded for Milestone C – planned for 3Q 2024 – for the USAF and Army. So, What Future for CIRCM? Production Numbers? Funding? In April 2021, the US Army finally awarded Northrop Grumman a five-year, $959.1 million, indefinite delivery/indefinite quantity (IDIQ) contract for full-rate production of CIRCM. The Navy and Air Force collaborated with the Army in determining requirements, but according to Army Lt. Col. Raymond Pickering, product manager for infrared countermeasures at the Program Executive Office-Intelligence, Electronic Warfare and Sensors (PEO IEWS), “[CIRCM] is not a joint program, but it is kind of a multi-service-interest program.” The Navy urgently needed a system lighter than LAIRCM for the AH-1Z SuperCobra, MH-60S, and hundreds of other helicopters. But apparently, it did not need CIRCM. Though the sudden success of DAIRCM may have surprised the world, and even in 2020 CIRCM was struggling a bit in testing, Northrop Grumman has had incredible success with LAIRCM and it is unlikely that Leonardo’s DAIRCM will replace CIRCM, at least for the US Army. Beyond the Army, DAIRCM may be produced in the hundreds, or more, but future CIRCM production should still be huge. It should also be remembered that Leonardo’s DAIRCM is somewhat of a “foreign” system. Although the US Navy has already procured several “international” electronics systems (NULKA, BOL dispensers, Litening targeting pods…), the chance of an all-encompassing, multi-service solution being bought from Leonardo rather than Northrop Grumman or BAE Systems… well, it just seems unlikely. Eventually, thousands of next-generation DIRCMs will be acquired, and as Teal Group first suggested in 2017, these could be of several types, of more than one design and from more than one manufacturer. A good quantitative market comparison is with the cur-rent US IRCM for small and mid-sized helicopters – more than 6,000 of BAE Systems’ AN/ALQ-144 have been produced. Finally, in February 2023 CIRCM achieved Initial Operational Capability (IOC). By February 2023, Northrop had reportedly delivered more than 250 CIRCM systems to the Army with more than 100 aircraft equipped. CIRCM reportedly had accumulated more than 11,000 flight hours since its first field installation in December 2021. For the moment, Teal Group will forecast CIRCM staying on track for Army production and growing to substantial unit and funding numbers, and DAIRCM going ahead in the near-term for the Navy and for limited procurements for urgent needs by other services (including internationally). Our forecasts see about $4 billion for Northrop’s CIRCM and about $1 billion for Leonardo’s DAIRM over the next decade. But, for the long-term, as we discuss in our speculative Future Low-Cost DIRCM & MWS Systems forecast (see report), the future market is still wide open – Teal Group forecasts more than $1 billion in prime funding still uncontracted and available over the next ten years, but this will likely increase significantly next decade, perhaps to a half-billion dollars annually. Northrop’s LAIRCM was bought, at great expense, for nearly every large aircraft near a war zone – but that was because there was a war on and there were no alternatives. To-day, perhaps, we are finally seeing more than one capable system, and competition could possibly return to improve capabilities and/or lower prices. If a competitor does come up with a $1-2 million DIRCM system – as long sought – CIRCM could see production numbers shrink. But at this time the Army and Navy both seem willing to buy a $2-2.5 million “low-cost” system, and both CIRCM and DAIRCM likely have this unit cost on track. In February 2020, the Army budgeted about $2.2 million per CIRCM in FRP, through FY25. Our CIRCM forecasts follow planned Army schedules fairly closely for now, as Northrop Grumman has been producing LAIRCM at high rates for a decade and the Army no longer seems to expect a $1-2 million CIRCM even for utility helicopters. But we speculatively forecast production tapering off after a few years for the “international” and non-“Big Three+BAE” DAIRCM/ADIRCM system – to be replaced either by later CIRCM systems, perhaps a new system developed by BAE Systems, which recently scored a huge comeback with its LIMWS (Limited Interim Missile Warning System) QRC system (we forecast BAE’s CMWS and LIMWS will be worth more than $500 million over the next decade; see AN/ALQ-212(V) ATIRCM/CMWSreport]), or by something else. For this speculative future forecast see Teal Group’s Future Low-Cost DIRCM & MWS Systems report. We also forecast a new Future Army Missile Warning System (MWS) – beyond the LIMWS – with about $1 billion in prime funding still uncontracted and available. Fast Jet DIRCM: The LAIRCM of Next Decade? Finally, to conclude the roller-coaster of DIRCM programs and forecasts, when TADIRCM was split by the Navy more than a decade ago, it envisioned both Assault DIRCM for helicopters and Strike DIRCM, which would eventually use TADIRCM technology to develop a podded family of systems for fast jets. Strike DIRCM was seemingly unfunded for years, but plans were for Strike DIRCM to debut with a third generation MWS with four to six two-colour staring sensors providing a full sphere of coverage. There would be one or two lasers and a compact pointer/tracker for the DIRCM itself. To some degree coming full circle (for fighters), in August 2016 the US Air Force awarded Northrop Grumman a $39.3 million, five-year contract for development efforts as part of the STRAFE (SHiELD [Self-protect High Energy Laser Demonstrator] Turret Research in Aero-Effects) Advanced Technology Demonstration (ATD) program, for a laser-based self-defence DIRCM system for pod-mounting on fast jets, initially planned as the F-15 and F-16. Northrop is to develop and deliver an advanced beam control system for integration. The USAF expected to begin flight testing the integrated system by 2019. In November 2017, the Air Force Research Lab (AFRL) awarded Lockheed Martin $26.3 million for the design, development, and production of a high power fibre laser for the Laser Advancements for Next-generation Compact Environments (LANCE) program, as part of SHiELD, with plans to test the laser on a tactical fighter jet by 2021. With STRAFE beginning a five-year ATD program in 2016, and relatively early development continuing in 2020, a major Future Fast Jet DIRCM production program is probably still a decade away, but we include highly speculative forecasts for the next ten years – worth about $1 billion in prime funding still un-contracted and available. Perhaps – it’s a long shot and not yet in our forecast, but maybe – beginning later this decade, a major Fast Jet DIRCM procurement for US and international 4th or 5th generation fighters could become a multi-billion ongoing program the way Northrop Grumman’s LAIRCM was for large aircraft for the past decade. For Editorial Inquiries Contact: Editor Kym Bergmann at [email protected] For Advertising Inquiries Contact: Director of Sales Graham Joss at [email protected]