Lockheed to make cheaper Patriot interceptors as air defense demand soars

By Joe Brock

FARNBOROUGH, England, July 20 (Reuters) - Lockheed Martin announced a lower-cost Patriot interceptor on Monday as U.S. and European governments seek more affordable ways to counter the mass missile and drone attacks that have become a defining feature of the wars in Ukraine and the Middle East.

Lockheed said its new PAC-3 Adapted Capability Effector, or ACE, missile would cost less than half as much as its PAC-3 MSE interceptors, which cost roughly $4 million per missile, according to U.S. Army budget documents.

The company said initial production could start in 2028, having earlier said it would take 36 months, adding that it plans to develop and manufacture the weapon with U.S. and European industry partners.

To reduce costs, Lockheed will "throttle back" some of the most expensive components, including solid rocket motors, which provide propulsion, and seekers, the sensors that detect and track incoming targets, Tim Cahill, president of Lockheed Martin Missiles and Fire Control, told reporters at Britain's Farnborough Airshow.

The ACE missile would bridge the gap between low-cost drone interceptors and the PAC-3 MSE, the Patriot system's premier interceptor, which uses sophisticated hit-to-kill technology to destroy incoming threats through direct impact rather than relying on a traditional explosive warhead.

"What ACE is designed to do is go after air-breathing targets, so aircraft and cruise missiles, short-range ballistic missiles, kind of intermediate ballistic missiles," Cahill said.

"This missile isn't designed to go after drones," he added.

The location of the announcement underscores efforts by U.S. defense companies to tap a European rearmament boom fueled by Russia's war in Ukraine, even as European governments seek to reduce dependence on American suppliers and expand local defense manufacturing.

"My intention is to bring a capability in and quickly turn it into, for example, an entire European-sourced missile. Built in Europe," said Cahill, adding that he was in talks with several unnamed European countries.

"That really becomes Europe's missile," he said.

The Patriot system has become one of the world's most sought-after air-defense weapons since Russia's 2022 full-scale invasion of Ukraine. Kyiv credits Patriot batteries with helping defend cities against Russian ballistic missile attacks, while Ukraine's President Volodymyr Zelenskiy has repeatedly appealed for more launchers and interceptors as Moscow intensifies air strikes.

Demand has also been driven by missile exchanges between Iran, the United States and Israel and wider instability in the Gulf, stretching supplies of advanced air-defense weapons and exposing production bottlenecks throughout the Western defense industry.

(Reporting by Joe Brock; Editing by Sharon Singleton and Susan Fenton)