IMI, Rafael drop out of US civilian aircraft protection tender

Contracts worth $7-10 billion are at stake in the tender.

Rafael (Israel Armament Development Company) will present a prototype of anti ground-to-air missile system for passenger aircraft by the end of the year, even though the US administration has barred Israeli companies from this estimated $7-10 billion market.

The US Department of Homeland Security yesterday chose three US companies for the final stage of the tender for systems to protect commercial airliners against missile attacks: BEA Systems (Nasdaq: BEAS), Northrop Grumman (NYSE: NOC), and a group headed by United Airlines, which includes Alliant Techsystems (NYSE: ATK).

The US firms cooperating with Israel defense companies in the development of anti-missile systems - Raytheon (NYSE: RTN), which is cooperating with Israel Military Industries (IMI), and Rockwell Collins (NYSE: COL), which is cooperating with Rafael, have dropped out of the tender.

Rafael regard the selection as only a temporary setback. A defense source said, “The market has not yet been blocked. Rafael hopes to appear with a proven system that is both better and more effective, and has already been installed on a passenger plane. The company hopes that someone in the US administration will feel uncomfortable at seeing what Rafael has to offer, and its price.”

Published by Globes [online] - www.globes.co.il - on January 8, 2004

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