UPDATE 2-BAE says in talks with Dassault on UAV link up

* BAE confirms in talks with France’s Dassault on UAVs

* Pressure on defence budgets drives talks on joint venture

* BAE’s gun system to be used on UK Warrior, Scout projects

(Adds BAE comments, details)

PARIS/LONDON, Nov 2 (BestGrowthStock) – Britain’s BAE Systems
(BAES.L: ) and France’s Dassault Aviation (AVMD.PA: ) are in talks
about joining forces to develop unmanned planes for Britain and
France, the British defence firm said on Tuesday.

The move is an attempt to capture growing interest in
collaboration on unmanned projects to ease pressure on defence
spending, but the two firms are likely to face competition for
the work from defence rivals including EADS (EAD.PA: ).

“We welcome … their (Britain and France’s) intention to
collaborate on a future Medium Altitude Long Endurance (MALE)
Unmanned Aircraft System (UAS) programme and a potential
Unmanned Combat Aircraft System,” BAE said in a statement.

“Given the strong research and development investment that
has already been made in this area by both BAE Systems and
Dassault Aviation, we have entered into discussions with
Dassault to explore how we could best deliver this opportunity.”

Earlier on Tuesday defence sources told Reuters BAE and
Dassualt had made a joint proposal over unmanned planes. The two
firms spelled out their ideas in a letter to leaders timed to
coincide with the Anglo-French summit on defence co-operation.
[ID:nLDE6A10MM]

One of the sources said the letter suggested that if Britain
and France wanted to maintain military aircraft capability,
“then they really need UAV programmes to sustain that and given
budget pressures, collaboration is probably the most sensible
way to go”.

In a joint declaration after London talks between Prime
Minister David Cameron and President Nicolas Sarkozy, Britain
and France pledged to work together on the next generation of
MALE unmanned systems.

They said a competition would be launched in 2011 with a
view to delivering equipment between 2015 and 2020. Such drones
are used for surveillance but can be designed to carry arms.

EADS is in talks with France, Germany and Spain on simliar
types of drones but discussions have proceeded slowly, with EADS
warning that Germany’s aircraft industry could be damaged if
Berlin does not make a decision soon on supporting the plan.

Britain and France also pledged to work on the next
generation of unmanned combat air systems, which would succeed
the current generation of fighters and are expected to come into
service from 2030. Analysts say future stealth fighters may be
unmanned but that this would need a costly leap in technology.

The statement said the joint move could lead to a decision
in 2012 to launch a demonstration programme from 2013 and 2018.

BAE said that its new gun and ammunition system, made with
Nexter, had been selected by Britain’s Ministry of Defence for
its Warrior upgrade and Scout vehicles programmes and expects
France to adopt the system for several of its own armoured
vehicles.

UPDATE 2-BAE says in talks with Dassault on UAV link up