Relations between Israel's two major defence contractors, Israel Aircraft Industries (IAI) and Elbit Systems, have sunk to a new low after the latter tried to snatch a key contract to maintain Israeli air force transport aircraft from its rival.
IAI's Bedek division has been maintaining the air force Boeing 707s, Lockheed Martin C-130s, and IAI Aravas and Westwinds for many years. The two companies have been at loggerheads for years over military upgrade programmes and the move to secure the maintenance deal has further damaged relations.
Elbit teamed up with national airline El Al to mount the bid, a move which resulted in IAI threatening to remove several contracts with the carrier if the tie-up went ahead.
The fierce reaction from IAI surprised the ministry of defence which had issued a Request for Information, and so Elbit was asked not to bid. Elbit has tried to downplay the issue saying there was no tender "so we did not compete".
After the cancellation of the Elbit tender, IAI secured the $120 million five-year contract.
Source: Flight International
