Sources inform ''Globes'' that Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1) and Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT) have asked the Antitrust Authority to allow them to make a joint bid for the maintenance of new Israel Air Force (IAF) trainer for combat trainee pilots.
The Ministry of Defense is planning to replace the IAF's aging A4 Skyhawk trainers, and will probably make the procurement decision in a year's time. The two alternatives under consideration are the T-50, jointly produced by Korea Aerospace Industries and Lockheed Martin Corporation (NYSE: LMT), and Italy's M-346 trainer made by Alenia Aermacchi.
Defense Ministry procurement officials and IAF pilots have examined both jets, and they were founded to suit the IAF's training needs.
IAI and Elbit Systems want to bid in the future tender for the maintenance of new IAF trainer. IAI will be responsible for maintenance of the plans, and Elbit Systems will be responsible for maintenance of the avionics and other systems.
IAI and Elbit Systems are major rivals among Israel's defense companies and exporters, partly because they compete in international markets. The IAI Heron unmanned aerial vehicle (UAV) and Elbit Systems' comparable Hermes 450 UAV have competed in several international tenders. The two companies have also gone head-to-head in tenders for upgrading planes and helicopters in European and Asian countries.
A defense establishment source told "Globes" today that the two companies jointly approached the Antitrust Authority because they are competitors, and they need its approval to make a joint bid in a Ministry of Defense tender. IAI and Elbit Systems have collaborated in the past, jointly developing the Genius unmanned armored vehicle, which also required prior approval of the Antitrust Authority.
Published by Globes [online], Israel business news - www.globes-online.com - on August 29, 2010
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