The deal adds to OEC’s growing portfolio of Tier-One defence & aerospace contractors.

Accompanying its recent capital raise, Orbital Corp (ASX:OEC) highlighted the potential of its work pipeline as it leverages its leading market position in advanced engine manufacturing for unmanned aerial vehicles (UAVs).

And this week, the company showed it continues to execute on that strategy, signing a Memorandum of Understanding (MoU) with Skyways – an emerging leader in unmanned cargo transport.



Based in Texas, Skyways has been selected by the US Navy to develop prototypes for long-range naval ship-to-ship and ship-to-shore cargo transport.

The testing process was managed by the Naval Air Warfare Center Aircraft Division (NAWCAD), where over 65 different platforms were analysed.

Participants had to demonstrate viable commercial platforms that could “autonomously transport a 20-pound (~9kg) payload to a moving ship 230 miles (~370km) away”, OEC said.

From that process, NAWCAD selected the Skyways Group-3 UAS platform for further testing and evaluation.


Strategic positioning

In line with the project’s development, Orbital has been retained to deliver a heavy fuel pre-production engine to Skyways, scheduled for completion in the first quarter of next year.

The engine will be “integrated by Skyways into the company’s next generation UAS for extensive flight testing, before being returned to Orbital UAV for evaluation”, OEC said.

While the supply deal won’t be a material contributor to FY22 revenues, it highlights the major commercial opportunities now stemming from Orbital’s established position as a supplier of choice in defence & aerospace, where annual spending continues to increase.

In that context, the Skyways deal represents “another opportunity for Orbital UAV to diversify its customer base and potentially develop new future engine production lines”, the company said.

As an example, as part of its global defence strategy the US Navy continues to invest in unmanned aerial systems for the purpose of cargo transport.

The goal of the testing is to build unmanned vehicles that can easily withstand heavy winds and open water missions, and capably land on fast-moving or pitching sea vessels.

Currently, transport for mission-critical logistics deliveries is primarily undertaken by tactical aircraft such as H-60 helicopters.

Unmanned Air Systems are seen as a “more efficient and cost-effective solution”, OEC said.

With its latest new customer agreement, Orbital continues to position itself as an Australian-based manufacturer of premium quality engines, built to the highest military-grade standards.

The company’s deal with Skyways forms part of a growing client portfolio that now includes Boeing-Insitu, Textron Systems and Northrop Grumman.

This article was developed in collaboration with Orbital Corp, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.