Defense officials confirm Turkish AWACS delivery

Officials: Boeing pressured the Defense Ministry to allow IAI-Elta to fulfill its contract.

Israeli defense officials told "Globes" today that Boeing Company (NYSE: BA) heavily lobbied the Ministry of Defense to allow Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1) subsidiary Elta Systems to supply electronics systems for four AWACS planes that Boeing was supplying Turkey, after Israel blocked defense exports to Turkey in the wake of the Gaza flotilla incident in May 2010.

Yesterday, Turkish daily "Today's Zaman" reported that Israel had finally agreed to send additional electronic systems to Turkey, which will integrate those systems into its Airborne Warning and Control System (AWACS) military aircraft purchased from the US. In 2002, Turkey purchased four Boeing 737-700 planes configured for AWACS, which included electronics systems made by Elta, under a $200 million contract with Boeing - $50 million per system.

The bitter crisis in Israeli-Turkish relations caused the Ministry of Defense to order Israeli defense companies to cool their business relations with Turkey. The ministry ordered Elta not to deliver the systems which Boeing contracted for. Three years ago, Boeing delivered the AWACS planes without Elta's systems.

Defense sources told "Globes" that Boeing's efforts softened the Ministry of Defense's position, and it allowed Elta to fulfill its contractual obligation to Boeing.

Elta's state-of-the-art systems will greatly improve the Turkish Air Force's AWACS capabilities. Elta's systems can identify air traffic at great distances, gather intelligence, and carry out electronic warfare. In recent years, the company has worried that the Ministry of Defense's sweeping ban was liable to damage its reputation, not to mention the loss of hundreds of millions of dollars in revenue. Elta has supplied its AWACS components to several air forces, including India, Chile, and Australia. The system will also be supplied to the Italian Air Force as part of the reciprocal procurements related to the Israel Air Force's procurement of Alenia Aermacchi M-346 jet trainers.

Published by Globes [online], Israel business news - www.globes-online.com - on February 18, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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