February 28, 2019 / 9:48 AM / a year ago

RPT-Kratos' Valkyrie combat drone to take flight next week - executive

(Updates signoff)

* Fighter-like XQ-58A Valkyrie to cost $2 million-$3 million

* Boeing developing larger, more expensive unmanned option

* Militaries looking for autonomous 'loyal wingman' for pilots

By Jamie Freed

AVALON, Australia Feb 28 (Reuters) - Kratos Defense and Security Solutions Inc expects its $2-3 million unmanned "loyal wingman" combat jet to make its first flight test next week, an executive said on Thursday.

Rival Boeing Co on Wednesday unveiled a model of a larger drone developed in Australia that is designed for the same mission: flying alongside crewed aircraft in combat.

Boeing has declined to disclose the sales price, but defence industry sources said it was expected to cost around $8 million to $10 million. That aircraft is expected to make its first flight next year.

The XQ-58A Valkyrie developed by Kratos, a market leader in target drones, has a longer range than Boeing's planned 2,000 nautical miles. It is smaller and rather than using runways, launches like a rocket and lands with a parachute.

Jeff Herro, Kratos's senior vice president for business development, said he could see scenarios where both the Valkyrie and Boeing's aircraft could accompany an advanced fighter jet like a Lockheed Martin Corp F-35 given their different costs and capabilities.

"We are not going after the market that Boeing is. This is a different market," he said. "I don't think that people are going to buy 1,000 of those. Our whole plan is to extend the mission capability sets of exquisite fighters. That is what we want to do both in range and capabilities and affordability." Defences contractors are investing more in autonomous technology as militaries around the world look for cheaper and safer ways to maximise their resources.

The Mitchell Institute for Aerospace Studies in the United States said last year that the U.S. Air Force should explore pairing crewed and uncrewed aircraft to expand its fleet and complement a limited number of "exquisite, expensive, but highly potent fifth-generation aircraft" like the F-35.

The Australian government has announced A$40 million ($28.53 million) of funding for the Boeing Airpower Teaming System, in addition to an undisclosed amount from Boeing.

Kratos has spent more than $30 million on the Valkyrie, designed to be "attritable," meaning it could be considered expandable in some situations.

The U.S. Air Force has also invested in the demonstrator, Herro said, estimating a formal purchase tender could be issued in the next two years.

$1 = 1.4021 Australian dollars Reporting by Jamie Freed; Editing by Gerry Doyle

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