Podcast: Australia's Avalon Airshow—Building a Sovereign Munitions Capability

Australia is on the verge of releasing its Defense Strategic Review, which will chart a course for the nation's future military expansion as it seeks to fend off the widening influence of China and build its military industrial capabilities.

Listen in as Aviation Week's Steve Trimble and Chen Chuanren discuss the newest developments from the 2023 Avalon Airshow, Australia's largest airshow to date.

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Rush Transcript

Jen DiMascio:

Hi, and welcome to the Check 6 Podcast. I'm Jen DiMascio, the Executive Editor for Defense and Space, calling across time zones to reach Defense Editor Steve Trimble and Chen Chuanren, our Asia-Pacific Correspondent.

Australia's Avalon airshow in Geelong was expected to coincide with the results of an ongoing Defense Strategic Review that will shed light on the future of the Australian military as it seeks to fend off increasing competition from China, as well as the future of an agreement signed in 2021 by the US, the UK and Australia known as AUKUS. And we'll watch as that unfolds.

I'd like to start out with the strategic review. The unclassified version of it has yet to be released and still, it managed to be at the forefront of the discussion coming out of the conference. What did you learn about it?

Steve Trimble:

Yeah, hi and thanks. So I think it is important to kind of set the stage here with some budgetary context. So currently, this year the Australian defense budget is about $49 billion Australian dollars. That converts into $32-$32.5 billion US. Just for perspective, the US Marine Corps spends about $50 billion annually. So you think about the entire Australian defense force, their budget's about two-thirds the size of the US Marine Corps.

But that's a lot more than they had been spending. In fact, that represents essentially a 100% increase in defense spending since 2012, which also happens to be the last time Australia conducted, I think what we in the US might call a bottom-up review, of their defense strategy for structure and forced posture. And that document from just over a decade ago was really what set the stage for this period of growth where they've acquired a whole new fleet of fighters, Super Hornets, growlers and F-35s, new helicopters, new munitions, new UAVs, new destroyers, just a whole lot of equipment and material, but there's still an appetite to grow more and to grow substantially more.

And that process got set in motion through the new Australian government, which was the Labor government, which was elected last spring, early summer. And they commissioned this Defense Strategic Review to look at how they can and in what areas they should continue to grow and to grow substantially. And that process started in August of last year with the beginning of the Defense Strategic Review or DSR. The group that completed that review submitted it to the Prime Minister on February 14th last month, but in classified form, the details of which have not yet been announced.

Now, this comes along with the AUKUS agreement between UK, Australia and the US to collaborate and to form a much more closer bond than they already had on defense issues, including the acquisition of nuclear-powered submarines, the path forward for which is supposed to come out of the DSR and it will be the first thing that comes out later this month. And then the full DSR, the unclassified version of which anyway, will be revealed perhaps late March, early April, mid-April, that timeframe.

And so then we'll get a much bigger, better picture of exactly what their plans are for how they're going to continue increasing spending over the next several years and in what ways. We already know obviously the nuclear-powered submarines are certainly on the table, their capacity for long-range strike through cruise missiles, through submarines, through additional fighters, and perhaps even bombers have been talked about, although that seems like on the less likely end of the spectrum. All that is about to come out over the next several weeks, so it was a big point of discussion during the show.

Jen DiMascio:

Thanks Steve. I thought another big theme for Australia was establishing a sovereign advanced munitions capability and getting the ability to do more production within Australia. How does that work exactly? How might it benefit or hurt other countries?

Steve Trimble:

So, it's interesting. This all got started about a year ago when the Australian government announced what is called the Guided Weapons and Explosive Ordinance Enterprise. Of course, that created this new acronym, GWEO. So at the show, lots of references to GWEO and where that's going. And I think we got a pretty good idea of really what was in the realm of the possible and how they're going to start going down that path.

And the situation there is they want to create a sovereign weapons industry capability so that they have some ability to generate the munitions, guided munitions, internally and not have to rely on external sources. Of course, that's very hard. I mean, when you think about a missile for example, there's a lot of different pieces to that. There's the motor at the back end, there's the propellant, then there's the warhead, or I should say first there's the guidance and control section, usually it comes first, and then the warhead, then the seeker, and then the airframe. Each one of those are pretty advanced technologies and some of which are just technologies Australia's never invested in.

So in the long term, it's hard. It is going to take a while for them to actually create their own capacity to create each one of those elements at a world-class level because Australia's going to need export orders to justify an indigenous industry. Their defense budget just isn't going to be able to sustain a domestic industry, just similar to Israel, 80% of their defense industry relies on exports versus imports or from domestic orders.

But they do have a path, right? So already, and I think it actually starts with Ukraine, there was a production order announced in December of 2022, just a few months ago, by the White House for the JDAM-ER. That's a Joint Direct Attack Munition-Extended Range. That actually was invented in Australia. It's one of the few munitions that have been. Obviously, the JDAM itself comes from Boeing. And in this case, the Australian Defense Science and Technology Organization developed, over a period of several years, a wing kit for a GBU-38, which is a 500-pound version of the JDAM. And that triples the range.

So Australia placed an initial production order for that seven, eight years ago. Actually, probably eight or nine years ago. But there haven't been any announced sort of follow-on production orders, so it's been out of production for several years. The US military has never invested in any significant way. They rely on the Joint Standoff Weapon, the JSOW, and the JSOW-ER for that same purpose, but it looks like it's going back into production. And that production IP is owned by Australia.

And in fact, there was a company at the show, Ferra, F-E-R-R-A, which displayed a JDAM-ER wing kit on its stand. They would not talk in any explicit detail about what their plans are for resuming production, if that is in fact the case, but one can kind of presume in just the fact that they were there showing this off so soon after that production order was announced that they have some role in all that.

So, that's the first stage.

And then the second stage is probably going to be assembly of other munitions that have been ordered by Australia and creating that capacity to start assembling those types of weapons. So just a couple of months ago, the Australian government announced orders for HIMARS launchers as well as their Multiple Launch Rocket Systems or GMLRS, Guided Multiple Launch Rocket Systems made by Lockheed Martin and the Kongsberg/Raytheon Naval Strike Missile.

And now those two companies have already signed memorandums of understanding with the Australian government to collaborate and explore ideas for how to establish this GWEO enterprise in Australia. Lockheed officials in particular talked about how the path forward is likely assembly of those GMLRs and perhaps even Naval Strike Missiles by Raytheon at the beginning.

It's important to note that in addition to announcing that order, Australia's also signed up to be a development partner for the Precision Strike Missile, Increment 2. And PrSM, as it's also known, is one of the munitions that can be launched from HIMARS and it will enter service with US Army later this year in its Increment 1 form. Increment 2 adds a seeker so it can hit moving targets, especially maritime targets. And Australia is a development partner with that. So one could imagine that that's the next step getting involved in the assembly of that, as well as perhaps even component manufacturing, although that may be more of a mid-term to long-term.

So the pieces in Australia to do that sort of thing would include a company known as Australian Munitions, which is now owned by Thales. They make propellants, they make explosive ordinance, they make some solid rockets, but it's a very small part of the enterprise and it would have to be scaled up quite a bit to participate in something like PrSM.

And obviously, we mentioned Ferra as a possible airframe manufacturer for munitions, and that there are other little pieces, but like I said, in that whole chain, from the motor to the propellant to the guidance and control, forehead, seeker and airframe. That's a lot to sort of ingest and it'll probably take several years, if not decades, to fully bring it into Australia over time.

Jen DiMascio:

Well, that's interesting, Steve. On Friday, Doug Bush, the Head of Acquisitions for the US Army, talked about working with Australia on munitions because the US is struggling to fill orders and/or foresees that in the future, and so sees Australia as a potential partner in doing that. So, it's interesting to see how those things fit together. He didn't talk specifically about what missiles they would help produce, but mentioned Australia and Poland as alternative sources of supply, particularly with regard to rocket motors, which the US is has a limited supply of.

Anyway, I'd like to move on to get some more information about Australia and its collaborative programs. Chuanren, you wrote about a new unmanned combat aerial system made by BAE Systems Australia. What is the STRIX?

Chen Chuanren:

Hi Jenny, yes. So this is probably one of the biggest and more exciting news that came out of Avalon with a lot of fanfare. So you imagine a huge curtain draped around the VTOL platform and there were light shows and countdowns and of course, when they count to zero, the curtain came down and lo and behold, it was a VTOL UAV with tandem wings and fixed propeller motors.

So the BAE Systems Australia, they were very proud of it. They claim it's 100% Australian development, although I would say it is a design that only is modular more or probably less, depending on who you ask. So it was developed in July last year under the [inaudible 00:12:51] Project Office with input from the Royal Australian Air Force, the Australian Defense Force, which is the army, and the Royal Australian Navy.

I think flight test, they say it's still expected to be begin from end of this year through 2025. Reproduction starting from 2026, that is if, of course, there is customers. And the intention of the STRIX is to address a gap in a larger VTOL UAV segment, which I think, if you think about it, there hasn't been a project that has caught attention as yet.

Some specifics here, the STRIX is about 800 kilograms with four electric hybrid engines, no moving parts on the wings. The wings can be folded to fit in the 20-foot container. The intention is of course to bring the STRIX via truck across the land or on the sea so that you can perform ISR emissions. And even the manufacturers and the designers say there's plans to use it for anti-submarine warfare. That means probably using it to drop sonar buoys when it's embark on naval destroyers or frigates.

BAE Systems, they said there's autonomous capability to be used as a loyal wingman for rotary platforms in the Australian army. And BAE Systems actually is... This isn't a pedigree from BAE Systems because they're involved in the Australian Air Force Loyal Wingman Program. So they know what they're doing in terms of autonomy systems.

And on what Steve mentioned earlier about GWEO, the BAE Systems Australia and MBDA, the European munitions manufacturer, has also entered a partnership under this GWEO project likely to target and meet the long-term solution. Although Raytheon and Lockheed are selected for the interim portion of the GWEO Enterprise.

So along with the STRIX, it's in fact a new, they call it a low-cost precision guided munition, called the RAZER, which is essentially a 40-kilogram, 50-kilogram munition, 155 mm or five-inch artillery round, except with a wing kit and a guidance tail. And the idea is to fit the munitions on the STRIX and perform business and strike with a low cost. It's almost like a small diameter bomb developed by the states.

So I think looking ahead, BAE Systems Australia, they want a slice of the pie, and of GWEO, and of course hopefully penetrate the unmanned systems market within the whole Asia-Pacific market.

Jen DiMascio:

Well, speaking of unmanned systems, Boeing Australia's been working on the Ghost Bat UAS. Did you get an update on that while you were out there?

Steve Trimble:

Actually, not much of an update. So the MQ-28 was there on-site, one of the first two that Boeing has built and started flying. But there wasn't a lot of information about the progress that they've made so far. Neither the Royal Australian Air Force nor Boeing seemed inclined to answer those types of questions here at the show, but it was there. And of course, this was the UAV that was unveiled actually as the Boeing Airpower Teaming System at the last Avalon Air Show in 2019. Obviously, 2021 was canceled due to COVID.

So, not a whole lot of new information about that other than actually just seeing it physically for the first time. And obviously, this is part of that ambition in Australia to go beyond being simply a consumer of aerospace and defense products to actually trying to be a producer, even though this comes from Boeing. Boeing acquired a significant chunk of the Australian defense industry about 16, 17 years ago. And this is the first homegrown product that has come out of it and out of Australia in general for a long time. The aircraft are being built and tested in Queensland and at the moment, there's just the Australian Defense Force order for 10 aircraft with about $600 million AUS invested in that capability. They're hoping to sell it to the US Air Force as part of the Collaborative Combat Aircraft Program.

Right now, the US Air Force is trying to figure out exactly what they want in a CCA. So it is not clear if MQ-28 is going to be the thing that the US Air Force decides to buy or wants, but it's certainly a candidate and will be evaluated as such. And it's probably a big factor in whether or not MQ-28 succeeds just because Australia's unlikely to be able to support a program like that by itself.

And right now, they have not announced that it's going to be an operational capability yet. The 10 aircraft are simply for development experimentation and they're sort of evolving their strategy for how to integrate a capability of that sophistication into their fleet in the long term.

Jen DiMascio:

Thanks, Steve. When it comes to the office agreement which really focused on nuclear submarines, the question has always been for us who deal with aerospace, what comes next? Would there be potential collaboration on hypersonic weapons, or as you mentioned earlier, per chance, the B-21 bomber? What are you hoping to hear about in that regard, or did you hear any more at the show there?

Steve Trimble:

Well, again, yeah, all that is going to be, I think, addressed in some form when the detailed recommendations of the Defense Strategic Review come out.

Now in terms of hypersonics, there is already sort of a path forward. Australia is a partner with the US in what is called the Southern Cross Integrated Flight Research Experiment. This builds on sort of a legacy of Australian and US collaboration in hypersonic research, especially through the HIFiRE Program, which ran through the last decade. But SCIFiRE is really the stepping stone between what was the Darpa Hypersonic Air-Breathing Weapon Concept Program, which demonstrated two flying hypersonic cruise missile demonstrators, to getting to an operational system, which will be the hypersonic attack cruise missile capability that the US Air Force is planning to field in FY 2027.

But the stepping stone will be a flight demonstration of that HACM-type capability, say a prototype of HACM. In Australia, the test, as the last we know, there was only one time where the US Air Force actually disclosed the information. That was a year or two ago, but the plan was to demonstrate the SCIFiRE prototype in Australia on a RAF F/A-18 in FY 2024, US DY 2024, so that's about a year from now. And that will be the next step towards getting there.

I think they are a bit of a ways from being able to manufacture that in Australia, although there is a company named Hypersonix, with an X, that was at the show, and they're in the process of starting to test a commercial hypersonic air-breathing scramjet engine that they plan to test actually probably in Virginia at NASA Wallops Facility in 2024 as well.

And they told us during the show that they're in the process of selecting a booster supplier for their prototype scramjet vehicle, which is called the DART AE, and they'll be selecting that booster supplier in the next few weeks. We know Kratos is one of the options they're looking at, but they're also looking at local companies. One would imagine the Thales subsidiary in Australia, as well as some other options they have there.

And once they do that, they can refine the final design and in the interface between the booster and the airframe, the DART AE airframe, over the next several months and get in into flight testing early next year. So it'll be really interesting to see how that evolves.

And in terms of bombers, this has been talked about a lot on both sides, that there is some interest from the Australian government in the B-21 if it becomes an exportable system. Australia had the F-111 for many years, decades, which it was retired in 2010 with no real replacement for its kind of range. And they see some threats arising in the South China Sea, and they would like to be able to have the range to deal with those types of issues, whether that's allowing the US Air Force to base B-21s in the Northwest Territories at RAAF Tindal, for example, or establishing their own squadron of B-21s. That that's sort of both being considered.

I think it's, just given the amount of investment it would take to bring in and ingest something like the B-21 into the Australian fleet, seems more likely that US Air Force basing in Australia, like a permanent base for B-21s, would make more sense. But that's something that will be addressed in some way in the Defense Strategic Review next month.

Jen DiMascio:

Well, unfortunately, that's all we have time for today. But thank you both for an excellent readout on the Avalon Air Show.

Listeners, join us again next week for another episode of Check 6, which you can hear first by subscribing on Apple Podcasts or wherever you listen to podcasts. Thanks for listening. Bye.