BAE in talks to provide air surveillance for UK Olympics
Friday, 18 April 2008
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BAE Systems has begun talks with the Home Office that could see it provide warzone surveillance aeroplanes for the 2012 Olympic Games in London.
The discussions, still at a very early stage, fall under the defence giant's new push into homeland security, a novel area that the company has recently decided to make one of its key objectives over the next five years. Alison Wood, group head of strategic development, said: "Our hope is that the security business will become another line of business for BAE Systems but it will not replace one of our existing lines of business."
BAE, which generates more than half of its turnover in America, has begun looking at similar opportunities there. The UK defence budget is under increasing budgetary pressure, and industry sources fear that major projects could be cancelled or pushed back. A Democratic president in America would probably cut defence spending there, the world's largest defence market.
The possible stagnation of those traditional markets has led BAE to look at crossing over into new fields.
Money dedicated to domestic "homeland" security is on the rise, in the UK and abroad, and several large defence groups have begun making inroads into the sector. It is a highly fragmented sector, and populated mainly by small and medium-sized companies.
Clive Forestier-Walker, an analyst at Numis Securities, said: "It makes sense. The surveillance and other capabilities they have in defence are applicable in a homeland security setting."
In the UK, BAE is looking at converting data fusion and analysis technology used to process vast quantities of radar and other surveillance data on warships for domestic security uses. Last December it bought the software arm of the surveillance group Petards. It is now talking with the Home Office about applying that technology, which could be used to fuse vast amounts of CCTV footage and pick out suspicion patterns or people.
It may also modify its HERTI unmanned surveillance aircraft to use for security at the Olympics. The vehicles, which can fly for several hours at a time and are used mainly by the military to gather intelligence, could replace much more costly helicopters.
