TRANSLATED - Turkish, Italian defense giants join forces in drone development

By Anadolu staff

ROME (AA) - Türkiye’s leading unmanned aerial vehicle (UAV) manufacturer Baykar and Italian defense giant Leonardo signed a partnership agreement in unmanned technologies on Thursday.

The landmark pact was inked at Leonardo’s headquarters in Rome by the Italian side's CEO Roberto Cingolani and Baykar's Chairman Selcuk Bayraktar and CEO Haluk Bayraktar.

"Today is a very important day. We are signing a memorandum of understanding with Baykar. We have defined key milestones with our colleagues from Baykar," Cingolani later told a news conference at the Foreign Press Association in Rome with the Bayraktars.

Cingolani said they are going through a complex period and Thursday’s agreement was the result of five months of intensive work. He emphasized that while the agreement spans five years, it envisions a much deeper collaboration. "This is a major achievement," he added.

Cingolani expressed his admiration for Baykar’s facilities in Istanbul, highlighting the company’s extensive portfolio of drones or UAVs.

"We've been having intense discussions ... for the last four months. We have been working with Leonardo in the past. We have been integrating their systems, we've been collaborating partners," said Selcuk Bayraktar, adding:

"But, the synergy and the chemistry between divisions and the complementarity in the last four months somehow magically aligned with the geostrategic shifts in the world."

Thanking Leonardo, Bayraktar also stated: "This synergy will bring about the best, most advanced systems for the world ... We are very happy to have started this journey together."

Production under the partnership will be done in both Türkiye and Italy. Baykar and Leonardo said they expect the European UAV market over the next decade to reach a value of $100 billion.

- Europe’s technology gap

Cingolani lamented the existing gap in unmanned technologies in Europe and highlighted the importance of ensuring global security.

He also pointed to the synergy between the two companies, stating that the combined technologies of Baykar and Leonardo would enhance Italy’s and Europe’s defense capabilities.

Boosting production capacity in both Italy and Türkiye, Cingolani said, "also opens the way to easier certification of those machines, because producing in a member state helps the certification in Europe which is an extra opportunity we get together."

- Praise for Baykar’s portfolio

Describing Baykar’s UAV designs as "state of the art," Cingolani highlighted that by sharing in the manufacturing process, they could increase production volumes.

He said Baykar’s portfolio includes both small drones capable of carrying a few kilograms and large aircraft capable of transporting tons of payload.

The small drones, he noted, are capable of forming swarms that locate objects even without GPS and enhance ground force security. He also pointed out that the Akinci unmanned combat aerial vehicle (UCAV), a medium-load UAV, is among the best-selling products in its category worldwide.

Cingolani compared the Bayraktar Kizilelma to a "jet without a pilot," suggesting it could lay the foundation for next-generation fighter aircraft.

"The global market that we can envisage in the next decade or so exceeds $100 billion because the demand is really huge," he said, adding that this partnership could create a new industry, generate employment, and achieve unexpected technological advancements in a short time.

He also thanked Haluk and Selcuk Bayraktar for their technical vision, emphasizing that discussions among experts facilitate collaboration.

- Future steps

"Baykar is the leading developer and producer of unmanned aerial systems in the world. For the last four years, it's the leader UAV market and the predominant portion of its revenues come from exports," said Selcuk Bayraktar.

"We have exported our UAVs to 36 different countries. Ninety percent of our revenues come from exports, which have been close to $2 billion for the last four years for each year."

He also highlighted the collaboration with Leonardo, a company globally recognized for its command, control, communications, computers (C4), intelligence, surveillance, and reconnaissance (ISR) systems, as well as its AI-driven technologies.

"We're living in a world where innovation is the ultimate agent of change, and those who change the world are the ones who, in a sense, lead the world."

Stressing that the combined capacities of Leonardo and Baykar could help build the "air supremacy of the future," Bayraktar said this synergy would produce the most advanced systems.

- Europe’s security

The attendees later took questions from the moderator and journalists.

Cingolani said that they would continue the Eurodrone program and saw no issues in integrating technologies. "I believe that no one wants to see a Europe which is irrelevant or squeezed in between much bigger — not as a population but as a capability — much bigger continents."

He emphasized that the Eurodrone program alone could not guarantee Europe’s competitiveness in UAV technology, stressing the need to enhance capacity through the right partnerships.

Noting that Europe has investments in the space sector but lacks sufficient effectiveness, Cingolani highlighted the importance of this issue for global security.

Stating that all European militaries need UAVs and are seeking to acquire them, he said: “If we do a good job, for sure, I hope the Italian defense system will buy drones coming from the joint venture."

- 'A 20-year dream'

Selcuk Bayraktar said unmanned combat aircraft are the "way of the future" and that their development has been a "dream from 20 years back."

Telling how Türkiye’s first unmanned fighter jet, the Bayraktar Kizilelma, made its first flight in 2022, he stressed the growing effectiveness of unmanned combat aircraft.

Bayraktar also said that they are open to providing supplies for the Global Combat Air Program (GCAP).

- 'Europe’s largest'

Haluk Bayraktar said the partnership with Leonardo has three main aspects: armed surveillance drones, loitering munitions, and future unmanned jet fighters.

Saying trends in technological transformation necessitated this agreement, Bayraktar added that the agreement is currently Europe’s largest.

- Export decisions to be made jointly

Noting that each country has its own export policies, Haluk Bayraktar said they have exported to 36 countries.

He stated that export decisions would be made collectively, involving relevant authorities, necessary approvals, and consultations throughout the process.

Bayraktar explained that while every country and defense manufacturer typically seeks approval from its own authorities, their partnership marks a shift toward a new framework where export decisions will be determined jointly.

- 'Europe must come together'

Roberto Cingolani described the Global Combat Air Program (GCAP) as an "attractive topic" but added: "The first prototypes will be produced in 2035, and we are in 2025. In order to say that a machine will be serving another system, you need to know the requisites, you need to know what kind of machine you need ... I think it's simply too early."

Cingolani emphasized that exports are a "very sensitive" issue. "There are very precise rules, very precise policies in that, even if you provide a small piece on a big aircraft, with that small piece you can put a veto selling the aircraft."

Asked whether unlimited sales are being considered due to rising global defense expenditures, Cingolani said prospects of this worried him, since "if you have unlimited growth, you have to make unlimited deliveries."

Referring to global issues, particularly the Russia-Ukraine war, he said: "We have to create alliances because without gigantic industries, Europe is too fragmented. No one can make it on its own in Europe. Because even though we are advanced, we have good universities, good research, good wealth, each individual member state cannot make it on its own. So we have to get together."

- '20 years ago, no one knew the term UAV'

Cingolani said they are working with Baykar to develop a business model, including production timelines and roadmaps, with a goal of producing an Akinci prototype within a year.

Selcuk Bayraktar recalled his time studying at the US Massachusetts Institute of Technology (MIT), where he worked on UAV flight formations:

"In the field, I was a research assistant and demonstrated formation flight with UAVs, 20 years back when nobody knew the word 'UAV' in the world. There were no drones ... Then, we moved Baykar towards that direction in the year 2004."

Bayraktar also announced plans to integrate the Italian aerospace company Piaggio, which Baykar recently acquired, into the UAV production process due to its "capacity and experience."

He criticized the defense industry for being dominated by a "big establishment with a lot of walls and with a lot of status quo and a very low energy level" and explained that Baykar partnered with Leonardo because of their similar team dynamics and approach.

Bayraktar described Baykar’s corporate culture as one where colleagues call each other "brother or sister" and said the average employee age is around 29: "It's like a university campus — probably the best technology campus in the world, in terms of social amenities."

He emphasized Baykar's growth, stating that the company started with just 10 people and, in about 20 years, became the world's largest AI-powered drone manufacturer:

"Türkiye didn't have locally produced aircraft — think about it that way. We had all sorts of sanctions. We didn’t have a base like Italy in aviation. So, that's Baykar’s story."

Cingolani said the partnership agreement with Baykar is a 50-50 joint venture: "

This is real industrial collaboration with a clear work share. We know exactly what we're going to do and what they're going to do. We’ll put things together and, therefore, we'll have a very light, agile committee and the work share is the basis of the agreement."

- 'Putting together our technologies we export more than we could individually'

Asked how the joint venture would be financed, Cingolani said: "You don't need to finance the joint venture because we don't create the standard companies where you share industrial assets, you put in money, and then you start production."

Cingolani explained that useful payloads on "any system," including land systems, ships, and air systems are already being produced, adding: "The problem is eventually producing more of some of those components to satisfy the demand of the first producers of drones in the world because maybe, putting together our technologies we export more than we could individually."

"So, the good thing of the joint venture based on work share and not on financial engineering is that we are only talking about productional objects that we already produce."

Cingolani stressed that if there is demand, exponential production of existing products would be required and added: "Imagine that in the course of the collaboration ... we invent something or there is a requirement that is not possible to match today but then you need to develop something completely new. In that case, you need to invest, and you invest with the revenues of the company.

"The only small investment that you need now is for system integration because obviously if we get a command-and-control system from Leonardo and we want to place this into the Akinci — just an example — this is not done like this, you need a bit of development."

"But, this is not a substantial investment compared to developing new radar, developing a new communication standard, or a new drone. So, this is the strength that those kinds of joint ventures can have," he said.

"The top management of companies don’t care about who consolidates, who has the leadership, who's more important. We just want to do something which is competitive at a world level and this is technology, no ideology, just technology."

Cingolani also said that he could not provide an exact estimate of production capacity.

- 'European countries should be allowed to allocate more money for defense'

On whether Leonardo's weapon system, radars, monitors, and other surveillance systems would be included in the partnership, Cingolani said: "At the moment, the work-share that we have includes products from the electronics divisions, command-and-control, radars, sensors, and some avionics from the aircraft division."

"Of course, those are big divisions. There are many products, but at the moment this is what we are discussing, and according to our work share and our analysis, this will be the core of our contribution."

Asked about plans to rearm Europe, Cingolani said: "At the moment, NATO is NATO. We really feel we are a part of NATO and the Atlantic umbrella, so I hope that will not change and I think it's important that Europe gets stronger and (becomes) a more reliable, solid part of the NATO alliance."

He added that he did not want to consider a scenario in which NATO does not exist. "I think it’s good that Europe gets (to be) a stronger, more reliable partner for the Americans."

"In some sense, I understand if in the United States somebody says: 'But why do we have to pay so much money from the taxpayers to defend Europe at the border?' It’s a very understandable position.

"I don't have any ideological content, no polemics. I think it's reasonable for the American taxpayer to say: 'Why are we paying so much money and then we defend Europe if Europe is not investing its own money.' When I said before, 'peace is not for free,' I meant this. So I think it's reasonable that we do or homework to be a stronger partner of our American allies."

Cingolani emphasized that European countries should be allowed to allocate more money for defense, adding that to achieve this, they must make high-quality products that Europeans will want to buy.

Asked about production facilities in Italy, Cingolani said there are multiple locations in the country capable of manufacturing aircraft and drones and that they would make decisions based on quality and cost criteria.

Selcuk Bayraktar also noted that while production could take place at Piaggio, they were evaluating other options as well, highlighting Leonardo's significant capacity.

Haluk Bayraktar stressed that they already had a large production capacity in Türkiye and would also establish manufacturing capacity in Italy, adding that they would jointly decide where to integrate all systems.