ISRAEL & IN FOCUS: Gulfstream partnership lifts IAI's business jet ambitions

Tel Aviv
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Israel Aircraft Industries (IAI) has been making business jets since 1980, but seldom on its own. Brief collaborations in the 1990s with Yakovlev and the Chicago-based Pritzker family led ultimately to IAI’s most important and enduring partnership with Gulfstream in 2001.

Nearly 13 years after Gulfstream agreed to market and support IAI’s business jet products, the partnership that produced the midsize G150 and super-midsize G280 stands at a cross-roads.

Soon after obtaining an airworthiness certification by the US Federal Aviation Administration in September 2012, the G280 entered what is likely to be a long production run.

The question for the IAI-Gulfstream partnership is determining what comes next. Gulfstream already occupies the market segment above the G280 with the G450 series, which is likely to be replaced by the still-unannounced P42 project.

Answering that question is a key decision for executives at IAI’s commercial aircraft group, the division that manages production of business jets, multiple components for the Boeing 787 and other programmes.

“It's a unique relationship,” says David Dagan, executive vice-president and general manager of IAI’s commercial aircraft group.

“If you ask everybody at IAI, the main goal for us is to find the future with Gulfstream. So there is discussion. We will continue discussing, finding the way,” he says.

Thirteen years ago, the new partners considered a broad range of potential projects, to include collaborating on a supersonic business jet and leveraging IAI’s experience with the supersonic Kfir fighter. Gulfstream is still actively exploring supersonic technology, with a string of patent claims over the past decade.

But the partnership has been good to both parties far beyond the marketing of Gulfstream-branded G280s and G150s. The relationship allowed Gulfstream to supply G550 jets to the Israeli air force, which IAI modified into special mission platforms including a conformal airborne early warning system.

On IAI’s side, Gulfstream’s support helped to re-imagine the design of the G200, as the replacement G280 bears Gulfstream’s trademark T-tail, sturdy wing and plush interior. Gulfstream also had a strong impact within IAI’s organisation and management style.

As an executive who spent nearly two decades away from the business jet operation before returning in 2007, Dagan noticed a dramatic change inside the company.

“The difference is the way we design the aircraft, the way that we are working with the suppliers,” Dagan says. “The focus on quality is much, much – a higher standard today. If you ask me, this is the main contribution of the work that we are doing with Gulfstream.”

Malfunctions discovered during flight tests are now investigated thoroughly to find – and correct – the root cause.

It is a philosophy that has been carried over into other parts of IAI’s commercial aircraft group. In 2008, reports surfaced that IAI was among the suppliers identified by Boeing as falling behind on the 787 programme. IAI officials later attributed the problems to the late receipt of export clearances.

Once described as the most significant tier two supplier on the programme, IAI still plays a large role in the 787 supply chain. The company delivers floor beams, the cargo floor and door surrounds for the 787-8 and 787-9 models.

Boeing has not yet initiated discussions about IAI’s role on the 787-10 variant, Dagan says.

IAI’s portfolio as a manufacturer of business jets and composite aerospace components is unique in the global supply chain, and a position the company hopes to grow as commercial aircraft demand booms.

“We are trying to be build to [specification] and not build to print,” Dagan says. “Other things we concentrate on are complicated subassemblies – not small and simple.”

Over the past decade, the group has re-organised to outsource lower-value, touch-labour work.

“For example we are doing three-axis machining, or five-axis machining. We are not doing sheet metal parts,” he says. “We have suppliers in Israel that are doing parts.”