A major reason for the disparity is cost. While stand-off missiles account for only 5.8 percent of all estimated production through 2021, they also represent more than half the market value. In that respect, the three break down to 39.5 percent, $7.3 billion for guided bombs; 9.9 percent, $1.8 billion for AGMs; and 50.6 percent, $18.5 billion for stand-off missiles.

The growth in demand for precision AGMs has been significant, going from 35 percent of ALMs used in the 1999 Balkans NATO air campaign to 60 percent in Afghanistan only two years later to 68.3 percent during Operation Iraqi Freedom, with the majority in all cases being guided bombs.

The prominence of weaponized UAVs in Southwest Asia, meanwhile, has created a new niche AGM market for small missiles tailored to the unmanned platforms.

“Since tactical UAVs have a very modest payload, weapons even smaller than SDB [Small Diameter Bomb] have been receiving attention,” Zaloga said. “Large UAVs such as Predator can accommodate the Hellfire, but smaller tactical UAVs such as the RQ-7 Shadow cannot. The U.S. has started this field with the privately developed Raytheon Griffin, and other weapons in this category seem likely with the proliferation of UAVs.”

 

United States

The United States is expected to remain the premier exporter of ALMs for the foreseeable future. Multiple generations of the Sidewinder short-range missile have dominated the market, and the AIM-9X variant looks to  take over as the world’s favorite missile, representing nearly 43 percent of the market in units – close to 60 percent in value – according to Teal’s forecast for 2017.

“The Sidewinder will remain a significant player in the AAM export market through the end of the decade, even though procurement in the U.S. has ended,” Zaloga added. “While it once enjoyed a virtual monopoly in this field, it is now being challenged by other types, including the Israeli Python and now the ASRAAM [British Advanced Short Range Air-to-Air Missile].

“Nevertheless, most countries tend to buy aircraft and associated AAMs from the same country; the continuing sales of F-16s and F-18s will ensure a continued market for the Sidewinder, aided by the advent of the F-35 JSF [Joint Strike Fighter] late in the forecast period. We anticipate that AIM-9X will be the single most important missile in this category in terms of production [through 2021].”

Among medium-range AAMs, the AIM-120 AMRAAM holds a similar lead, with Teal Group predicting it will account for 68 percent of that category’s production through 2021 and more than 71 percent of market value, although both are expected to decline from their 2014 highs of about 77 percent of units produced and just short of 90 percent of global market value. Nearly all of that will be due to the British Meteor, which is slated to enter service in 2015 but is expected to rise to 15.5 percent of units and 34.7 percent of market value by 2021.

“Earlier medium-range missiles employed semi-active radar homing that obliged the pilot to keep the target illuminated by the aircraft radar during the dogfight. This not only was difficult to accomplish, but limited the number of engagements a single aircraft could undertake in a given time,” he noted. “The new AIM-120 – and active radar missiles like it – give the pilot the same flexibility enjoyed with short-range missiles.”

In the AGM arena, the United States appears to be dominating new technologies, but future budgets, along with the anticipated end of combat operations in Afghanistan, may affect their development for either domestic or export sales.

“The U.S. Army and Navy are jointly developing a Hellfire follow-on, the JAGM [Joint Air-to-Ground Missile]. In the past, we categorized this weapon with the other anti-armor missiles, but JAGM is somewhat different in focus, being intended primarily for airborne platforms and designed for attacking a wide range of targets beyond tanks,” Zaloga said, but added changes also are coming in smart bombs. “The Small Diameter Bomb is beginning to take off in much the same way as JDAM did a decade ago.

“SDB has two attractive features: modest size and enhanced range. The U.S. Air Force feels guidance improvements mean SDB can be used for many of the same missions as JDAM, since a strike nearer the target reduces the need for a larger blast warhead. This remains to be seen, but there are certainly a large number of battlefield targets that do not require 1-ton warheads.”

 

Europe

For the Eurofighter, the 2000 decision to go with the active-radar Beyond Visual Range Air to Air Missile (BVRAAM) Meteor – developed by pan-European MBDA – ended the competition, but under the best of circumstances, it will not enter the market until mid-decade.

Intended to offer multi-shot targeting of long-range maneuvering targets, even against strong enemy electronic countermeasures, the Meteor ultimately is expected to be carried by U.K., German, Spanish, and Italian Typhoons, British and Italian F-35s, French Rafales, and Swedish Gripens. MBDA predicts it will provide those air forces with three to six times the kinetic power of current AAMs, primarily due to its throttleable ducted rocket (ramjet).

However, the outlook is not as bright for the ASRAAM, according to Teal Group.

“With ASRAAM finally getting ready for series production, its viability in the export market has stalled. Its prospects were not helped by delays in full-scale production, which undermined its export prospects at a time when AIM-9X and IRIS-T [Infrared Imaging System Tail/Thrust Vector-Controlled] are entering production,” Zaloga said.