Defence

Frost & Sullivan sees demand for conventional submarines

Posted 28 February 2013

Despite a number of governments making defence budget cuts, analysts Frost & Sullivan see the demand for conventional submarines, mainly with AIP on board, growing at a compound annual growth rate (CAGR) of 1.8% globally during 2013–2022 and present revenue opportunities of up to £23bn ($34.80bn).

Above: Canadian Forces Maritime Command submarine HMCS Windsor (SSK 877) leaving Faslane, Scotland for Halifax, Nova Scotia.

The modern non-nuclear, conventional diesel-electric submarine (SSK) with air-independent propulsion systems (AIP) is a complex, multi-role and extremely powerful weapon system. The submarine is able to deploy a wide range of weapons and conducting various missions ranging from anti-submarine, anti-surface vessels warfare to intelligence, surveillance and reconnaissance.

"The naval operations environment has changed significantly; operations at sea have moved from the 'blue water' open ocean to the 'brown water' shallow costal environment," noted Frost & Sullivan aerospace, defence & security industry analyst, Dominik Kimla. "The importance of smaller and quieter conventional submarines, rather than larger, nuclear-powered, has increased significantly."

However, the submerge endurance of AIP SSK cannot as yet be compared with that of nuclear-powered attack submarines (SSN). Nevertheless, AIP technology is evolving rapidly with more reliable and powerful AIP solutions expected within a decade. The AIP system is seen as a must-have capability for newly procured SSKs. Moreover, the through-life cost of SSK AIP, in comparison to SSN, is three to four times lower, not to mention the high cost related to the deactivation of SSN.

Asia-Pacific (APAC) and Europe appear to be the two most attractive markets at present. Frost & Sullivan forecasts that the SSK market in APAC will grow at a CAGR of 2.1% and account for 47.2% of the global demand for conventional submarines (2013-2022). "APAC countries are in the process of expanding their underwater capabilities with stealthy SSK," added Mr. Kimla. "All major Navies in the region are implementing submarine programmes."

Europe, with a CAGR of 1.5% and a 22.4% global market share, will retain its status as the second largest SSK market over the forecast period. The most prominent ongoing SSK projects are underway in Germany and Italy (type-212), Greece and Turkey (type-214) and Spain (S-80). Additionally, Sweden has been developing its new submarine – A26 project, Norway is looking to replace its Ula class SSK while Poland wants to enter two modern AIP submarines into service by 2022.

"Navies are increasingly looking at modern SSK due to its multi-role capacities and semi-strategic potential. Consequently, modern conventional submarines present significant market opportunities for the submarine sector to sell new boats as well as to retrofit standard SSK with AIP plug in section," summarised Mr. Kimla. "The Pacific region has experienced the most heavy sea-lane traffic in the world, which needs to be constantly secured. It therefore offers considerable business growth prospects for submarine solutions providers."