Lockheed Martin announced a new lower‑cost PAC-3 ACE missile at the Farnborough Airshow, aiming to meet soaring demand for affordable drone defence. The interceptor will cost less than half the current $4mn PAC-3 MSE price and will be developed and manufactured together with US and European industry partners.

Tim Cahill, president of Lockheed Martin Missiles and Fire Control, said allies need a “battle‑tested and budget‑smart” solution. Demand for Patriot has surged since Russia’s 2022 invasion of Ukraine, depleting global stockpiles; US Army budget documents list the existing missile at about $4mn each, intensifying the push for cheaper alternatives.

The move mirrors pressure from agile start‑ups such as Fire Point, which recently tested its FP-7.x anti‑missile at a fraction of western system cost and claims it could be produced in far larger numbers. Lockheed’s plan to co‑produce with European partners also reflects a strategic shift as the US under Donald Trump pulls back from Europe, prompting European governments to build indigenous air‑defence capabilities.