The two companies are bidding in the $1.4 billion South Korean tender for early warning aircraft.
Israel Aircraft Industries Ltd. (IAI) has hired a PR agency in Seoul, to assist in it its battle with Boeing (NYSE: BA) for the $1.4 billion tender to provide early warning aircraft to South Korea. Local media representatives have been given information about Israeli technology as well as details of Boeing’s failure to meet the timetable on a similar project that it is carrying out for the Australian air force. The decision on the winning bid will be given in the coming months, and it is believed both in Israel and South Korea that IAI has a good chance of winning the tender.
Under the terms of the tender, the winning bidder will provide four early warning aircraft under the framework of the project codenamed “E-X”. IAI is offering the “Phalcon” airborne radar system, manufactured by its Ashdod-based subsidiary, Elta. The system is installed on the Gulfstream executive jet made by General Dynamics (NYSE: GD). Boeing is offering the AWACS system, which is installed on its 737 aircraft. According to reports in South Korea, IAI has made a bid of $1.1 billion, while Boeing’s bid totals $1.7 billion, after it lowered its original offer by $700 million.
The final decision on the winning bid rests with South Korean president Roh Moo-Hyun, who will make his ruling after hearing the opinions and recommendations of a professional committee comprising representatives from several government ministries headed by Defense Minister Yoon Kwan-Ung. The presidential decision will be followed by a process to set the final contract price. The announcement could be made at the end of this month although the process may be delayed by internal issues relating to the date of the convening of the South Korean parliament.
Published by Globes [online], Israel business news - www.globes.co.il - on July 3, 2006
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