Aerospace & Defense

Why the World's Most Expensive Drone Costs $19 Million

The U.S. Army plans to add 29 MQ-9 Reaper drones to its arsenal in the current fiscal year at a cost of about $11.26 million per unit. They will join the 284 Reapers already delivered on a contract calling for a total of 361 units by the end of 2019.

The unit cost includes only the aircraft and the cost of government furnished equipment. For the current fiscal year there are additional budgeted costs driving the unit cost to $19.5 million. The total cost for the entire life of the MQ-9 program, including weapons, communications and other systems, totals about $12.5 billion, including military construction costs of $75.6 million.

The Reaper aircraft and ground control stations are built by General Atomics Aeronautical Systems, a privately held firm based in Southern California. The Reaper’s engines are built by Honeywell Inc. (NYSE: HON) while Raytheon Corp. (NYSE: RTN) makes the aircraft’s infrared sensor and L3 Communications Inc. (NYSE: LLL), makers of the operator simulator and satellite communication infrastructure components.

Weapons for the drones include AGM-114 Hellfire missiles built by Hellfire Systems, a joint venture of Lockheed Martin Corp. (NYSE: LMT) and Boeing Co. (NYSE: BA). Boeing is also the prime contractor for the Joint Direct Attack Munition (JDAM) smart bombs that can be fitted to the Reapers. Raytheon supplies the Paveway laser-guided bombs. A single Reaper can carry a total of four Hellfire missiles and two bombs.

The good news, for the contractors, is that Reapers are also included in the arsenals of Britain, France and Italy. Spain and the Netherlands also have placed an order for the systems. A coalition of the four European countries France, Spain, Italy and Germany are working on developing a next-generation drone to replace the Reaper.