Israel Aircraft Industries and US aircraft manufacturer Fairchild, the owner of aircraft manufacturer Dornier, have signed an agreement whereby IAI will assemble in Israel the new Dornier 428 aircraft. IAI's revenues from the deal are $600 million.
Ninety-five orders have been placed since the aircraft plan was unveiled in 1998, and supply is scheduled to begin in 2003. The IAI-Fairchild agreement bears on the design, manufacture, and assembly of the fuselage. It comes on top of an agreement signed in June 1999, under which IAI was entrusted with engineering planning, flight testing and licensing - at $80 million.
In its civilian aircraft division at Ben-Gurion Airport, IAI will assemble Dornier 428, a 44-seat jet. Dornier 428 is a "green" aircraft, which means that it will be flown to Fairchild's Oberpfaffenhofen facility in Germany for final customization (interior and option installation), painting and delivery to customers.
According to Fairchild president Jim Robinson, the agreement with IAI will allow Fairchild to bring the aircraft to market a year earlier than originally planned. "There's strong customer demand for this aircraft, and together we'll be able to provide operators with a family of passenger jets of various sizes." IAI general manager Moshe Keret said, "We're extremely pleased with our expanded role with Fairchild, and we're committed to providing it with a high-quality, competitive product."
According to IAI civilian aircraft division deputy general manager Ami Davidson, one of the principal reasons that led Fairchild to choose IAI was the speed at which IAI completed the licensing of its new executive jet, Galaxy.
Fairchild is one of the world's leading manufacturers of small and medium size passenger planes. It is based in San Antonio in Texas, and its European production plant is in Germany. IAI will manufacture four Dornier 428s a month, as well as 18 Galaxy and 12 Astra planes.
Senior IAI executives estimate that manufacturing the Dornier 428 in Israel will not hurt its marketing to customers in Arab and Persian Gulf states. The sources added that today no negotiations are under way for the sale of Galaxy or Astra aircraft to Persian Gulf states, following the discontinuation of negotiations that started when the peace process was in full swing.
Published by Israel's Business Arena September 30, 1999