IAI wins $400m Brazilian Air Force deal

IAI will convert Boeing 767-300ER jetliners into refueling, troop, cargo transport, and medical evacuation planes.

Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1) has won a contract from the Brazilian Air Force to convert Boeing 767-300ER jetliners into planes for multi-mission planes refueling, strategic troop, cargo transport, and medical evacuation. IAI beat US and European companies in the tender. IAI declined to mention the size of the deal, but aviation experts told "Globes" that they estimated at $250-400 million, making it one IAI's largest ever contracts in Brazil.

Israeli sources told "Globes" that IAI will initially convert three Boeing 767s, and may later convert more planes. The planes will customized to Brazilian Air Force specifications, and will be delivered after IAI completes the lengthy and complex licensing process. The project will take several years to implement, under the Brazilian Air Force's KC-X2 program to replace four KC-137 (militarized Boeing 707s).

In a statement, IAI said that, in the coming week, company executives would confirm the contract's final details with Brazilian government and Air Force representatives. Sources involved in the deal said that most of the conversion work would be carried out by Brazilian subcontractors of IAI.

IAI CEO Joseph Weiss told "Globes" today that the Brazilian deal was a foothold in one of the world's fastest growing markets, which the company has targeted. "We've had deals in Brazil before, but this is one of the big ones," he said. "We're making many efforts to establish our position in Brazil and we're examining participation in other ventures."

IAI plans to unveil some of its systems, including advanced air-to-air refueling LAAD Defence and Security International Exhibition, which will open in Rio de Janeiro in three weeks.

IAI has already converted Boeing 767-300s into refueling planes for the Colombian Air Force. The Colombian deal also includes the sale of upgraded used Kfir fighter jets, which IAI originally built for the Israeli Air Force.

Published by Globes [online], Israel business news - www.globes-online.com - on March 17, 2013

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

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