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Wednesday, January 18, 2006 - Page updated at 12:00 AM

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Airship market balloons

The Washington Post

After building a business defending high-ranking officials in Iraq, Blackwater USA executives think the future may be hovering above the battlefield.

The North Carolina company is developing an airship — think Goodyear blimp — loaded with sensors and surveillance cameras that can quickly relay information about the ground below to clients miles away.

"If bad guys are setting up IEDs [improvised explosive devices] on the side of the road, we can see real-time what's going on," said Chris Taylor, Blackwater's vice president for strategic initiatives, referring to improvised explosive devices, which have proved deadly against U.S. troops in Iraq.

The company's first airship should be ready by year's end, he said, though it has no customers lined up.

Blackwater's move is only the most dramatic of the diversification plans private security companies are undertaking.

The industry grew rapidly when the government and corporations paid hundreds of millions of dollars for armed guards after Sept. 11, 2001, and the invasion of Iraq.

Private guards' unprecedented numbers in Iraq have raised questions about how they should interact with the military and prompted calls for more regulation of the industry.

Now many industry insiders reason that demand for private security in Iraq will begin to decline, and they want to expand beyond just toting guns.

Virginia-based Triple Canopy, which has about 1,000 employees in Iraq and won part of a State Department contract last year to guard high-risk embassies, has branched out from government work and begun advising commercial clients about potential threats to their office buildings.

Special Operations Consulting of Nevada, founded in 2003, initially built a 100-acre training facility to use for its growing ranks of Iraq-bound guards but began opening it up to competitors that needed sniper training required by the Department of State, as well as U.S. and foreign units in need of the specialized training.

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Most of the private security companies are privately held, though DynCorp International owned by Veritas Capital Fund, is planning to sell stock to the public. DynCorp received about 37 percent of its $1.9 billion in revenue in fiscal 2005 from operations in Iraq and Afghanistan.

Blackwater, which also makes targets for gun ranges and runs a construction company, has been around since 1997. It didn't become a national name until 2004, when four of its employees were ambushed and killed in Iraq. Now it is entering the crowded field of unmanned aerial vehicles.

The U.S. military already has 1,000 drones patrolling the skies of Iraq, some armed with missiles, said Kathy Ellwood, an analyst for Frost & Sullivan, a research group.

But airships are a burgeoning market, she said. As the price of unmanned drones, which range in size from a large textbook to a small plane, continues to rise, some military experts see airships as a cheap alternative, she said.

Blackwater's 120-foot-long airship could be deployed quickly and stay in the air for four days, while most unmanned drones can last up to only 16 hours, Taylor said.

Triple Canopy, formed in 2003 by military veterans, recently named a new president, Roger Young, a former senior executive at Maximus, and established a strategic advisory board, which includes Catherine Yoran, a former assistant general counsel at the CIA.

There has been increasing demand for special training for local law enforcement, said Lee Van Arsdale, chief executive of Triple Canopy. "The first responder has to think in such broader terms now — you're talking about response to a chemical attack, high explosives, the prevention-and-detection aspect," he said.

Triple Canopy has also begun offering vulnerability assessments to commercial companies, he said. And by 2008, the company forecasts, 30 percent of its revenue will be from commercial business, Van Arsdale added, compared with less than 5 percent now.

"We have been wildly successful with what we have done in Iraq, but that is a completely dynamic environment, and we're not going to pin our company's future on always having a lot of work in Iraq," he said. "It would be foolish of us to be a one-dimension company."

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