The U.S. Army has signed a massive contract worth up to US$4.2 billion to improve its intelligence and surveillance systems using aerostat-tethered airships.

These airships, called Persistent Surveillance Systems–Tethered (PSS-T), are capable of hovering at altitudes up to 15,000 feet for extended durations. They will be fitted with advanced sensors to monitor vast areas continuously.

Ten companies, including Leidos, QinetiQ, and TCOM, will compete for work under the Army’s Program Executive Office for Intelligence, Electronic Warfare, and Sensors (PEO IEW&S). The program also allows for international sales, with Poland committing US$1 billion in 2024 to acquire these systems—a sign of growing global interest in the technology.

Aerostats have a history. In Iraq and Afghanistan, they helped relay communications, disrupt enemy signals, and track movement. Now, their mission has shifted: to address modern challenges posed by strategic competitors like China and Russia. The urgency sharpened after the 2023 Chinese spy balloon incident, which exposed serious blind spots in U.S. airspace surveillance.

Aerostats are favored for their cost-effectiveness and low operational demands compared to drones or satellites.

A spokesperson for PEO IEW&S, Brandon Pollachek, noted that balloons have long served in military surveillance roles. This program, he said, updates that legacy to confront today’s threats, from stealth aircraft to cyber warfare.

The new systems are a targeted effort to plug critical gaps in aerial monitoring, particularly in the “near-space” zone that China exploited in 2023. While not the origin of the Army’s aerostat strategy, the incident catalyzed its urgency.

The 2023 Chinese Spy Balloon Incident

In late January 2023, a high-altitude balloon from China entered U.S. airspace over Alaska, drifting across North America before being intercepted and destroyed by a fighter jet off South Carolina on February 4.

Towering at 200 feet with a payload comparable to two school buses, it was identified by the Pentagon as a surveillance asset of the People’s Liberation Army.

The balloon carried antennas for intercepting communications and solar panels for extended operations.

NORAD (North American Aerospace Defense Command), responsible for monitoring and defending U.S. and Canadian airspace, admitted a “domain awareness gap”—radar geared for fast threats like missiles couldn’t easily spot slow movers at 60,000 to 80,000 feet.

China insisted it was a weather airship diverted by winds, but an analysis of the debris suggested otherwise. Though it didn’t transmit data in real time, its structure indicated intelligence-gathering intent.

The balloon’s trajectory passed over sensitive sites. The optics of the breach spurred an immediate wake-up call to the world.

In response, the U.S. shared intelligence with global partners. Diplomats from approximately 40 nations, including India, Japan, and Australia, briefed the U.S. on the incident’s findings and discussed coordinated responses. The goal was clear: build a unified strategy to counter low-tech, high-impact aerial surveillance.

Global Efforts To Counter Aerial Surveillance Threats

The Chinese balloon episode prompted a wave of action. India, amid ongoing border tensions with China, demonstrated its aerial response capabilities. In 2024, the Indian Air Force used a Rafale fighter jet to neutralize a simulated high-altitude balloon at 55,000 feet—mimicking a potential Chinese incursion.

Japan, too, has stepped up. In 2023, Tokyo committed to strengthening its intelligence, surveillance, and reconnaissance (ISR) capabilities. Meanwhile, the U.S. has deployed reconnaissance drones in Okinawa to reinforce aerial awareness across the East China Sea.

China continues to push boundaries. Reports suggest it has developed stratospheric airships that can detect stealth aircraft like the F-35 from nearly 2,000 kilometers away. These dual-use systems blend civilian and military functions, complicating international tracking efforts.

Russia, long experienced in using balloons for Arctic surveillance, may also upgrade such tools to serve broader strategic objectives.

Securing The High-Altitude Zone

The U.S. Army’s aerostat initiative fits within this escalating global contest. Designed to carry long-range radar and signals intelligence payloads, these systems are likely to be deployed over key regions, whether in the Pacific theater or along NATO’s eastern flank. Vulnerable to weather and enemy attack, they nonetheless offer low-maintenance, high-value coverage.

Across capitals, military planners are recognizing the strategic relevance of “near space”—a band that sits above fighter jets but beneath satellites. Detection remains difficult, but the stakes are rising. As surveillance balloons and airships redefine the aerial battlefield, nations are scrambling to secure the skies once thought too distant to matter.