IAI in talks to sell upgraded Kfirs to Argentina

Argentina is interested in buying a squadron of 15-18 Kfirs at $20 million per jet.

Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1) is in talks with the Argentine Air Force for the sale of a squadron of Kfir fighter jets, 20 years after they were decommissioned from the Israel Air Force (IAF). The IAI manufactured more than 200 Kfirs in the 1970s for the IAF, which decommissioned them and put them into storage as it received F-16s.

If the negotiations with Argentina are successful, IAI will purchase grounded Kfirs from the Ministry of Defense, upgrade them at its Lahav Division at Ben Gurion Airport, and adapt them to the Argentine Air Force's specifications.

IAI declined to comment on the report, or provide any details about the size of the deal.

IAI has already sold some of the 40-year old Kfirs to foreign air forces: Colombia, Ecuador, Sri Lanka, and the US Air Force (which uses them for training). IAI upgraded the jets' wiring, avionics, and radars, which greatly improved the jets' performance in various combat scenarios.

Each upgraded Kfir costs $20 million. The negotiations with Argentina are for a squadron of 15-18 jets, according to reports in South America.

In August, "Globes" reported that IAI had decided to expand sales of upgraded Kfirs to air forces that cannot afford the huge cost of procuring new-generation combat jets. There were reports six months ago that IAI was in talks with potential South American customers, and that the company was focusing its efforts to sell Kfirs to Eastern European countries that are due to join NATO.

Argentina fits IAI's target market: it has an obsolete air force, and it cannot afford fourth-generation combat jets. The effort to sell it upgraded Kfirs received a warm response from senior Argentine Air Force officers during a visit to IAI as part of the negotiations. Defense sources familiar with the matter told "Globes" that the talks were in advanced stages, but that the parties will still some way from concluding a deal.

If a deal is reached, Argentina will receive the Kfirs as if new, despite at least 8,000 flight hours or 40 years of activity. The jets will be equipped with a General Electric J-79 engine and will require maintenance after 1,600 flight hours, which will keep maintenance costs low.

Notwithstanding the low cost, IAI promises that Kfirs' performance is as good as the latest combat jets, and have capabilities that their Israeli pilots in the 1980s never had: the upgraded Kfirs have Elta Systems 30-32 radar; they can carry upgraded electronic warfare pods and a wide range of munitions, including the latest air-to-air and air-to-ground missiles; a new cockpit with state-of-the-art technologies for day and night and all-weather operations, and at long range.

Published by Globes [online], Israel business news - www.globes-online.com - on April 2, 2014

© Copyright of Globes Publisher Itonut (1983) Ltd. 2014

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