Israel Aerospace Industries aims to become an OEM

It is a major change that is a result of market conditions. Israel Aerospace Industries (IAI) is looking for co-operation agreements that will allow it to supply complete fuselage sections to aircraft manufacturers. 

This is part of the company’s strategy to enhance its civil operations.

IAI is already deep in negotiations with major aircraft manufacturers to become an original equipment manufacturer (OEM) for one of them.

The intention to increase its operations in the civil market has been mentioned in this blog more than once, but the development is the decision to go for OEM status. 

This is a major change that will require some meaningful preparations.

In the first nine months of 2012 IAI sales in the civil market totalled $349 million compared with $356 million in the same period in 2011. The sales of its Bedek division totalled $373 million compared with $478 million in 2011.

The decrease in sales of the Bedek division was mainly a result of fewer conversions of old passenger aircraft to cargo configuration. The decrease in sales of the civil aircraft division was mainly because of lower sales of the business jets made by the company and marketed by Gulfstream. The assembly line of the Gulfstream G280 is now operating at a very high  capacity.

So, almost naturally, IAI has been directed to a switch in its strategy – to become an OEM. If this happens, fuselage sections and other major parts of passenger aircraft of different sizes will be shipped from Israel to the final assembly lines of some of the major aircraft manufacturers.

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