Israel's Elbit speeds up race to fly military drones in civil airspace

REHOVOT, Israel (Reuters) - Israeli defense firm Elbit Systems on Thursday unveiled a 1.6 ton unmanned aircraft vehicle (UAV) designed to fly in airspace currently reserved for piloted civilian planes as a race heats up to deploy military drones outside combat zones.

Employees check an Elbit Systems Ltd. Hermes 900 unmanned aerial vehicle (UAV) at the company"s drone factory in Rehovot, Israel, June 28, 2018. Picture taken June 28, 2018. REUTERS/Orel Cohen

The move came hours after a U.S. rival staged a landmark transatlantic demonstration flight, as arms firms vie to develop drones with flexibility to be used in civilian-controlled airspace - a drive that could spawn future technology for unmanned airliners.

Changing security concerns following the dismantling of Islamic State and rising geopolitical tensions have caused European countries to shift defense efforts from far-away conflicts to homeland security, resulting in demand for drones that can be safely integrated into civilian airspace to, for example, monitor border crossings, Elbit officials said.

A version of Elbit’s Hermes 900 StarLiner is being assembled for the Swiss armed forces and is scheduled to be delivered in 2019 in a deal worth $ 200 million.

“We are getting a lot of interest from other customers for the same configuration ... from all over the world,” Elad Aharonson, general manager of Elbit’s ISTAR division, told Reuters.

The StarLiner, being launched ahead of next week’s Farnborough Airshow, is derived from the Hermes 900 operated by Brazil for surveillance during the 2014 World Cup. That operation required closing off airspace to civilian aircraft, something the StarLiner, with technology to detect aircraft and avoid collisions, will not require, Elbit said.

Elad Aharonson, general manager of the Elbit Systems Ltd. ISTAR division, stands among unmanned aerial vehicles (UAVs) at the company"s drone factory in Rehovot, Israel, June 28, 2018. Picture taken June 28, 2018. REUTERS/Orel Cohen

The drone is compliant with NATO criteria, qualifying it to be integrated into civilian airspace, Elbit said. It will still need approval of the various civil aviation authorities.

The StarLiner has been flying in civilian airspace in Israel over the past year.

California-based General Atomics’ MQ-9B SkyGuardian - a version of the widely used Predator family - completed its Atlantic crossing on Wednesday ahead of the world’s largest military airshow at RAF Fairford in western England.

Elbit expects to receive approval from the European Aviation Safety Agency (EASA) for its own product in the coming months.

EASA was not available for comment.

Israel’s drone exports in 2005-2012 totaled $ 4.6 billion, according to consultancy Frost & Sullivan. They reached $ 525 million in 2016, accounting for 7 percent of Israel’s defense exports, defense ministry data show.

Drones are a major source of revenue for Elbit and state-owned Israel Aerospace Industries. The United States and Israel dominate the industry but face growing competition from cheaper Chinese drones.

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U.S. military drone makers are vying for a larger share of the global market, which market researcher the Teal Group forecasts will rise from $ 2.8 billion in 2016 to $ 9.4 billion in 2025.

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Flying alongside airliners would expand the horizons of drones originally developed for military surveillance. But it would also call for advanced sensors and software that could eventually filter back into commercial use as developers look at single-pilot and ultimately pilotless cargo or passenger jets.

The StarLiner can reach 30,000 feet - the altitude of some commercial jets - and photograph an 80 square kilometer (31 square mile) area, Elbit said.

“Some customers would like to use the system to gather intelligence,” Elbit CEO Bezhalel Machlis said. “Another example can be for homeland security applications, to fly above an area and make sure it is monitored against terrorist activities.”

The drone can be equipped with radar, cameras to take video and still pictures, and signals intelligence to analyze electronic signals.

“This is a major step towards unmanned civilian planes,” Aharonson said, adding the main barrier to such aircraft would be psychological rather than technical.

Editing by Jonathan Weber, Tim Hepher and Mark Potter

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Smugglers Caught Using Drones to Drop $80 Million Worth of iPhones Into China

Chinese customs officers have arrested smugglers who attempted to drop millions of dollars worth of iPhones from drones into China.

Twenty-six suspects were arrested in China recently after they tried to use drones to fly two 660-foot cables from Hong Kong to Shenzhen, according to Reuters. Those cables were going to be used to lift iPhones worth 500 million yuan ($ 79.6 million) to the mainland, where they could be sold via the black market for a hefty profit, according to the report. A local Chinese report from the Legal Daily said it was the first time drones were employed to smuggle phones.

The operation was set to go off at night, where smugglers would pack small bags with approximately 10 iPhones and attach them to the drones. Those drones would then fly from Hong Kong to the mainland in just a matter of seconds. According to Reuters, the smugglers had the ability to transport up to 15,000 iPhones each night.

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Smuggling of high-value products—like iPhones, jewelry, and luxury products—is nothing new in China. In fact, the government has been working hard to crackdown on the practice and do a better job of breaking up what has become an increasingly powerful black market.

Smuggling gangs often steal devices or buy them at a deeply reduced rate and sell them for a higher price in China. They’re careful, however, to keep their prices below the going rate for those who purchase products legitimately. The result is a profitable business for smugglers and an opportunity for Chinese consumers to get authentic goods at a cheaper price.

Despite breaking up the drone attempt, Shenzhen officials warned that smuggling would continue. According to Reuters, the customs officers are planning to use several types of equipment to thwart other attempts by the smugglers.

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China busts smugglers using drones to transport smartphones: state media

BEIJING (Reuters) - Customs officers in southern China’s technology hub Shenzhen busted a group of criminals using drones to smuggle 500 million yuan ($ 79.8 million) worth of smartphones from Hong Kong to Shenzhen, the official Legal Daily reported on Friday.

Authorities arrested 26 suspects who used drones to fly two 200-meter (660-feet) cables between Hong Kong and the mainland to transport refurbished iPhones with a total value of 500 million yuan, the paper said in a report on the crackdown by Shenzhen and Hong Kong customs.

“It’s the first case found in China that drones were being used in cross-border smuggling crimes,” the Legal Daily reported, citing a news conference held by Shenzhen customs on Thursday.

The smugglers usually operated after midnight and only needed seconds to transport small bags holding more than 10 iPhones using the drones, the report quoted customs as saying. The gang could smuggle as many as 15,000 phones across the border in one night, it said.

Regulating the use of drones has become an important task for China, the world’s largest manufacturer of consumer drones.

China published strict rules last year to tackle incidents of drones straying into aircraft flight paths, including requiring owners of civilian drones to register craft up to a certain weight under their real names.

Shenzhen customs was quoted by the Legal Daily as saying it would closely monitor new types of smuggling with high-tech devices and enhance their capability with technical equipment, including drones and high-resolution monitors, to detect smuggling activity.

Reporting by Lusha Zhang and Se Young Lee; Editing by Paul Tait

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