Orbital Corporation has signed a long term agreement with Boeing subsidiary Insitu Inc, for the manufacture and supply of “N20” propulsion systems for Unmanned Aerial Vehicles (UAVs).
The agreement is based on flexible monthly volumes over a three year period and has a minimum order value of A$44 million and a maximum order value of A$120 million.
Orbital said a supporting agreement that will cover engine rebuilds, spares and services is currently under development and is expected to be completed in the next calendar year.
The agreement will see Orbital establish an operation base in the United States which will initially focus on delivering UAV engine rebuilds and providing local technical support before expanding UAVE propulsion system production as the demand from Insitu ramps up.
Orbital and Insitu have established a working relationship at the beginning of 2013 with an initial design development and validation contract. The commercial agreement has since evolved into a production contract for cutting edge engine and propulsion systems for Insitu’s existing and future platforms.
Orbital’s CEO and Managing Director Terry Stinson said this new long term supply agreement highlights the strong working relationship between the two companies.
“This is a great step forward for Orbital and represents a major boost to the forecast revenues from our UAVE business,” he added.
“Insitu and Orbital have developed a strong partnership during the N20 production development program. The long term supply agreement provides Orbital the opportunity to establish a production base in the United States and focus on further expansions in line with Orbital UAVE growth strategy.”
Don Williamson, Vice President and General Manager, Insitu Defence, said the agreement secures supply of the N20 propulsion systems and support services to ensure that the company meets its near-term customers’ requirements.
“The N20 propulsion system, developed between Insitu and Orbital UAVE, is designed to achieve industry best overall Performance, and best TBO (Time between Overhaul), a key commercial consideration from our customers,” Mr Williamson added.
“The N20 package has met all of our rigorous performance and capability criteria, and we are proud to provide our customers with a reliable, cost-effective product.”