Italy’s Leonardo, Türkiye’s Baykar nearing drone production partnership

Italy’s Leonardo is reportedly close to finalizing a production partnership with Türkiye’s leading drone manufacturer, Baykar, in a move that could significantly enhance Europe’s drone production capabilities, according to people familiar with the discussions speaking to the Financial Times.

Agreement expected soon

Industry sources indicate that Leonardo and Baykar are set to sign a memorandum of understanding as early as next week.

The agreement would outline terms for a joint venture, combining Leonardo’s advanced defense technologies with Baykar’s expertise in artificial intelligence-enabled drone manufacturing.

The potential collaboration is seen as a strategic move for both companies, particularly as European defense programs expand in response to evolving security challenges.

Baykar, co-owned by Selcuk Bayraktar is a leading global manufacturer of AI-powered drones. The company’s Bayraktar TB2, a medium-altitude long-endurance combat drone, is widely used by the Turkish Armed Forces and exported to multiple countries.

Baykar’s growing export market

Despite its significant role in Türkiye’s defense sector, 90% of Baykar’s revenues come from exports. In 2023, the company sold drones to 35 countries, generating $1.8 billion in revenue.

Since launching its unmanned aerial vehicle (UAV) R&D program in 2003, Baykar has self-financed all its projects, generating 83% of its total revenue from exports. In 2023, the company ranked among Türkiye’s top 10 exporters, a feat it repeated in 2024, reinforcing its continued success.

Having single-handedly accounted for one-third of the Turkish defense and aerospace industry’s exports the previous year, the company’s 2024 exports represented a quarter of the industry’s total, helping Türkiye maintain its position as the world’s top UCAV exporter.

Baykar has delivered its Bayraktar TB2 and Bayraktar Akinci unmanned combat aerial vehicles (UCAVs) at least to 35 different countries. While the Bayraktar TB2 has entered the inventory of 34 nations worldwide, the Bayraktar Akinci has made a significant impact on exports to 10 countries and is expected to enter more nation’s inventory in the upcoming time.

Baykar now holds 60% of the global UAV market, with Türkiye commanding 65% of the industry worldwide. The company emphasized that it has become the largest UAV manufacturer in the world for four consecutive years, surpassing American competitors by threefold.

Strengthening European ties

Leonardo is one of Europe’s leading defense companies and is actively involved in the Global Combat Air Programme (GCAP), a next-generation fighter jet project alongside Britain’s BAE Systems and Japan’s JAIEC.

Since 2012, Leonardo has been working as part of the UK national enterprise approach to developing the U.K.’s future combat air system capability. Significant progress has been made since then, including the formation of the UK-based Team Tempest industry/Ministry of Defence (MOD) group in 2018 and the establishment of the U.K.-Japan-Italy Global Combat Air Programme (GCAP) in 2022.

In October, Mitsubishi Heavy Industries and BAE Systems presented models of unmanned aerial vehicles that could be integrated into the GCAP framework, signaling increased demand for drone capabilities within the European defense ecosystem.

Analysts suggest that a partnership with Baykar would provide Leonardo with cutting-edge drone technology while giving Baykar access to the European defense market, an area the Turkish company has been targeting for expansion.

Baykar’s strategic expansion to Europe

Last month, Baykar completed the acquisition of Piaggio Aerospace, the aviation arm of the well-known Italian motor vehicle manufacturer.

The move was widely seen as a strategic effort to navigate European import barriers that have previously limited Türkiye’s defense exports. Baykar has also committed to expanding employment at Piaggio’s Italian facilities.

Sources close to the talks revealed that Leonardo and Baykar’s discussions intensified after the Piaggio acquisition, with Leonardo CEO Roberto Cingolani and the Bayraktar brothers exchanging visits over the past month.

While Leonardo has no direct involvement with Piaggio Aerospace, its leadership is closely monitoring developments related to the company’s future operations.

Leadership perspectives

Speaking at an event in Genoa, Leonardo’s Chairman Stefano Pontecorvo highlighted the urgency of the defense industry’s evolving needs. “There is no room for delays in defense anymore. The era of empty words is over,” he said, addressing the pace of progress in the partnership discussions.

Pontecorvo also praised Baykar’s rise in the defense sector. “Baykar is managed by extremely competent individuals. If it weren’t an exceptional company, it wouldn’t have reached an industry-leading position in just 12 years,” he noted.

He further hinted at forthcoming updates regarding Piaggio Aerospace, stating, “Soon, we will receive very positive news about potential cooperation with the Piaggio firm acquired by the Turks.”

Leonardo’s CEO Cingolani previously underscored the potential synergies between the two companies. “Leonardo’s technologies and Baykar’s technologies are highly complementary. If we collaborate, we can achieve a breakthrough in unmanned systems and expand into new markets, particularly in Europe,” he told Anadolu Agency in January.

Outlook for the partnership

While details of the final agreement remain undisclosed, defense analysts predict that the combination of Leonardo’s technology with Baykar’s drone platforms could pave the way for a high-tech unmanned aerial system compatible with next-generation European defense programs.

The partnership is expected to bolster Baykar’s market presence in Europe while reinforcing Leonardo’s leadership in military aviation innovation. Leonardo declined to comment on the negotiations, while Baykar has not yet responded to requests for statements from the Financial Times’.