European naval defence industry meets as threats drive fleet upgrades

By Reuters News

By Florence Loeve

- Shipbuilders, missile makers and drone manufacturers showcase their wares at an arms fair starting near Paris on Tuesday, as European governments, doubting the United States as a defence ally and alarmed by Russian aggression, rush to bolster navies.

The increasing use of drones at sea, attacks on critical undersea infrastructure and the targeting of commercial shipping in conflicts including in the Middle East mark a shift in the challenges that European naval forces face.

Last month, NATO said it would send more maritime patrol aircraft and drones to the Black Sea in response to a spate of deadly drone attacks on cargo vessels off the Romanian and Bulgarian coasts linked to Russia's war in Ukraine.

Organisers expect a record number of exhibitors at the November 3-6 Euronaval defence exhibition, rising 45% from the previous edition two years ago. The market for military and paramilitary shipbuilding was worth $122 billion globally in 2024-2025, up 50% from two years prior, the organisers say.

DRONES A FOCUS OF ATTENTION

Defence groups including France's Naval Group, Germany's TKMS TKMS.DE and European missile maker MBDA will show products ranging from warships to combat software and naval ammunition.

Drones were likely to attract particular attention, said Rear Admiral Guillaume Merveilleux du Vignaux, Euronaval's general commissioner.

Drones at sea lend themselves to various military uses, from autonomous underwater systems monitoring undersea cables or looking for mines, to surface ones used for surveillance or destruction on impact, specialists say.

Beyond simply buying drones, officials say the challenge is to connect these new systems to ships or submarines built years or decades ago.

Operating drones at sea also presents technical difficulties not encountered on land, from movement at sea to interference created by ships' radar or their steel hulls.

"A ship at sea moves a lot," a French Navy official said last week at a press conference. "All of the GPS-based systems need to take that into account."

Military officials and industry executives say a parallel challenge is identifying who is behind attacks as unclaimed operations at sea, in particular involving drones, become more common.

Industry experts say they are now betting on AI to help with that. "AI will enable important progress" to handle big quantities of data captured by radars and sensors, Merveilleux du Vignaux said.

Capital.com is an execution-only brokerage platform and the content provided on the Capital.com website is intended for informational purposes only and should not be regarded as an offer to sell or a solicitation of an offer to buy the products or securities to which it applies. No representation or warranty is given as to the accuracy or completeness of the information provided.

The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance.

To the extent permitted by law, in no event shall Capital.com (or any affiliate or employee) have any liability for any loss arising from the use of the information provided. Any person acting on the information does so entirely at their own risk.

Any information which could be construed as “investment research” has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.