Antitrust Authority director general Ronit Kan has allowed Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT) and Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1) to collaborate on a Ministry of Defense tender for the procurement and maintenance of the new Israel Air Force jet trainer. The new trainer will be selected in a few months to replace the obsolete Skyhawks.
Elbit Systems and IAI will set up a joint company, which will buy and maintain the Israel Air Force (IAF) trainers. The IAF will pay for use of the planes, based on preset rates. The Ministry of Defense and IAF will pick either the T-50, jointly produced by Korea Aerospace Industries and Lockheed Martin Corporation (NYSE: LMT), or Italy's M-346 made by Alenia Aermacchi as the new trainer.
Elbit Systems and IAI, which frequently bid against each other in foreign tenders, especially for unmanned aerial vehicles (UAV), approached Kan four months ago about the Ministry of Defense tender for the supply of the trainers and their regular maintenance. The IAF will hire the services of the tender winner on the basis of use of the trainers.
Elbit Systems and IAI need Kan's approval to make a joint bid in the tender as they are rival companies.
IAF officers, including several pilots, have tested both the T-50 and the M-346, and found that they meet the IAF's combat pilot training needs.
Published by Globes [online], Israel business news - www.globes-online.com - on December 21, 2010
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