The Alenia Aermacchi M-346 trainer selected by the Israeli air force will not be assembled in Israel, following an Italian commitment to place offset contracts worth approximately $1 billion.

Confirmation of the production strategy came as the Israeli defence ministry reached a $603 million agreement with Elbit Systems/Israel Aerospace Industries joint venture TOR Systems for the maintenance of its future 30-strong M-346 fleet.

Israel formally selected the M-346 earlier this year, following a competition between the type and the Korea Aerospace Industries/Lockheed Martin T-50. Its announcement was accompanied by an Italian contract for two IAI-supplied Gulfstream G550-based conformal airborne early warning and control (AEW&C) aircraft, plus ground support systems and a logistics support package, totalling a combined $750 million.

Under an additional agreement with Telespazio, IAI will develop, manufacture and supply an observation satellite worth $182 million.

While IAI will benefit mainly by supplying the AEW&C aircraft and satellite to Italy, Elbit will establish an enhanced logistics support and maintenance infrastructure for the M-346 in Israel, along with ground training equipment. It will also supply some avionics systems for the type.

Source: Flight International