Remember the movie Top Gun—1986 or 2022? Imagine that but instead of Tom Cruise or any of the other unfairly good-looking pilots at the helm, there was nobody. Eerie, right?
Not for the independent aerospace composite company Quickstep (ASX: QHL). Its aerostructure business has secured a contract from the world’s first cargo drone airline, Dronamics, to produce and supply its flagship Black Swan unmanned cargo aircraft. The estimated value of this contract ranges between $4.5 and $5.5 million.
Dronamics is a European company that develops long-range drones that are 50% cheaper and up to 80% faster. The Black Swan—a phrase for unpredictable events with significant consequences—is a large, unmanned aircraft that can carry 350kg of cargo over 2,500km for 5 euros (or $7.65) per kg.
The agreement includes Phase O engineering, i.e. design for manufacture, and Phase A supply, i.e. prototype—on a full cost-reimbursement-plus-fee basis—of 10 low-rate initial production aircraft. The Company will deliver three aircraft by October 2023 and seven more by July 2024.
There are other terms involved as well. For instance, there’s the customer’s right to audit during Phase 0 and Phase A. Plus, Dronamics has the right to refuse follow-on production. Both companies have mutual marketing obligations and must comply with AS9100D, ISO27001and ISO14001 (aerospace quality certifications). There will be a five-year airframe (the aircraft’s exterior notwithstanding its technical infrastructure) warranty. There will also be an industry-standard liability, indemnity and termination clauses, and finally, the contract includes standard representations and warranties for the engineering and manufacturing of the Black Swan.
This contract has been long in the making, demanding negotiations and prep work. First announced on July 18, 2022, during the Farnborough Airshow—an aerospace trade exhibition, the two companies have worked on developing the contract ever since, finally reaching a sweet spot. Since July last year, Quickstep has been doing some funded engineering work in collaboration with Dronamics to help finalise the design and volume production objectives.
In July 2021, Quickstep launched a new vertical dedicated to unmanned systems, dubbed the Quickstep Advanced Air Mobility (QAAM). It was in keeping with the global unmanned aerial vehicle (UAV) market boom, valued at $226 billion from 2020 to 2029. UAVs cover a range of services, from the consumer “quadcopter” to high-end military aircraft. Additionally, the commercial drone market globally is set to grow to $58.4 billion in 2026.
Besides unmanned vehicles, the Company has also been receiving other aerostructure contracts. On January 19, Quickstep secured an $11.3 million order to produce and supply F-35 vertical tail (i.e. the stabiliser) components. With these contracts and more, in FY23, the Company forecasts its revenue to be $100 million, up 15% on FY22. 80% of its revenue is expected to come from new lines of business.
All those ideas about drones delivering your food or Amazon orders are all but coming true. The question now is about customer service—how will you tell the drone about a wrong delivery, misplaced items, or that you are not home to receive your stuff? Will there be room for human error?
The contracted work will commence in March 2023.
Alinda is a Business Reporter for The Sentiment
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