Boeing and Israel Aerospace Industries – the fee in dispute

Israel Aerospace Industries (IAI) is making another attempt to settle a dispute with Boeing about the “Boeing fee” charged by the American manufacturer for every aircraft that is converted by the Bedek division of IAI from passenger to cargo configuration.

The dispute is not new. The Boeing fee has been charged since 2009 but IAI’s efforts to avoid it or decrease it have failed. Israeli sources say that because of the recession that is still affecting the air cargo market, clients are more price sensitive and the Boeing fee increases the final price by $250,000.

After two years of continuous growth in air cargo there is a clear stagnation that is worrying the airlines and companies like IAI, a major center for conversions.

The Boeing fee is charged to allow the owner of the converted aircraft access to all the technical documentation of the aircraft. The fee, according to Boeing, represents a royalty as the conversion changes the original airframe design.

IAI declines to comment on the issue that is being dealt with by lawyers from both companies.

Bob Sailing, spokesman for Boeing Commercial Airplanes, said on 15 May that the fee is not new and is according to Boeing’s policy when work is being performed on one of its aircraft. “We always do our best to discuss these issues with our partners and in this case we do the same,” he said.

Both companies are presenting clear cut reasons for their stance. This dispute has been kept low profile but the flames that it causes are dangerous.









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