The Israeli defence industry is again taking a major presence at Paris, and Elbit Group is looking to expand both through organic growth and takeover activity.
Q: As the president & chief executive officer of the Elbit Group. What are your plans to take the organisation forward?
A: Elbit Systems is a global defence electronics company with 37 years of technological leadership and extensive operational experience, in Israel and worldwide. In the past 5 years Elbit Systems' revenues have more than doubled. We intend to continue the implementation of our growth strategy, both through internal growth and through mergers and acquisitions, in order to maintain our leading position as a provider of advanced solutions to the evolving needs of today's defence market.
Q: Israel is developing a fine reputation for production of UAVs but there is increased competition between Elbit and Israel Aircraft Industries (IAI). Is the market big enough for the pair of you to operate as separate brands or do you expect to see a rationalisation soon?
A: Israel has been for many years at the forefront of development, production and operational use of advanced UAV systems. Elbit Systems had been selected to supply the major UAV system for the Israeli Defence Force (IDF), and recently we have received a new order of $47 million for additional UAV systems for the IDF. Other suppliers in Israel have also developed UAV systems, often duplicating R&D and marketing efforts. I believe that until such duplications are eliminated through a much-needed consolidation of the Israeli defence industries, cooperation between competing industries should be encouraged.
Q: There is much talk about the development of an Unmanned Combat Aircraft (UCAV). How is Elbit progressing in this development? And when do you expect to see UCAVs being available
A: Elbit Systems has developed a number of tactical UAVs for various uses: the Hermes 180, Hermes 450 and the Hermes 1500, all of which are on display at Paris.
Q: What other markets do you see the group entering. What other scope do you see for the products and services you produce (such as UAVs) in the near future?
A: We see the Intelligence, Surveillance, Reconnaissance (ISR) market growing. The Elbit Systems group, and especially our subsidiary El-Op has key capabilities in this area, such as space and airborne reconnaissance systems and electro-optical payloads. Other ISR capabilities include UAVs and C4I systems.
Q: How have you been affected by the general global downturn?
A: In the defence electronics and upgrade areas, we provide affordable solutions, and therefore we see the current global situation as an opportunity.
Q: How well is your upgrades market activities faring following the loss of the C130 contract to IAI's Lahav division? You have some exciting product lines such as helmet-mounted displays. Do you see this as a market with growth potential?
A: The helmet-mounted systems are definitely a growing segment in our business, both as stand-alone systems and as part of our upgrade programs. Through VSI, jointly owned with Rockwell Collins, we are supplying HMD systems to the leading US front line fighters.
We are also a major supplier of Helmet Mounted Systems for helicopters. Our ANVIS/HUD and MIDASH systems have been installed already on various helicopters in the US and worldwide.
Q: Following the incident in Mombassa, with the attempted terrorist attack on the El Al aircraft it was reported that Elbit and Elisra were working together on civil aircraft protection systems. How is that work progressing and what are the implications for safety of civilians with the use of the laser technology? Is this likely to be an export product and where do you see the likely markets?
A: We have announced recently that our subsidiary El-Op is developing an aircraft protection system called MUSIC, based on advanced laser technology.
The system components are complimentary to existing detection systems, which allows cooperation with other companies. We expect the system to be fully tested and approved by FAA during 2004.
Q: What are you hoping to achieve from being at the Paris air show
A: We are showing the latest technologies of the Elbit Systems Group, such as UAVs, advanced avionics simulator, trainers, various electro-optical systems and guided weapons.
The Paris airshow provides an excellent opportunity to meet customers and associates and I'm glad to say that our schedule is already quite full. Based on our past experience, such meetings may be starting points for future business deals.
Q: With the current situation in the Middle East and with the political pressures from international bodies to develop a lasting peace with the Palestinians how do you see the Israeli defence industry changing in the short and medium term?
A: The Israeli defence industry constitutes an integral part of Israel's defence infrastructure and I believe that the need for privatisation and consolidation of the defence sector in Israel will not change in the foreseeable future, regardless of political developments.
Q: As a leader in LGB technology, what does the company feel about the increasing emphasis now being placed on GPS-guided smart bombs, and what efforts are you making in this direction?
A:We are continuously developing new technologies in the area of guided weapons, enhancing our line of precision guidance kits.
Q: The impression is that the IDF/AF has never been more modern and technologically advanced, leaving relatively few opportunities for new upgrade work. Is this perception accurate, or do you see opportunities for further major programmes? For example, are they going to switch your attention from the F-16 to the F-15 now?
A: The concept of upgrading an existing fleet is complementary to acquiring new platforms. Elbit is working closely with the IAF on all of its tactical platforms, and we believe that the IAF will continue to modernize its existing aircraft and helicopters, taking advantage of the latest generation technologies.
Q: With the disappearance of a home market for the MiG-29 Sniper upgrade following Romania's decision to retire rather than upgrade its MiGs where does this leave the programme, and where are the perceived major markets for the upgrade?
A: We have demonstrated a good solution for the MiG-29 Sniper upgrade, which has drawn interest from potential customers, and we are examining cooperation with potential partners for such programmes.
Q: The Su-25 Scorpion was a highlight of the last Paris. Is the programme to upgrade Georgia's Su-25s now over? Has the company enjoyed any further success with Su-25 upgrades?
A: The Su-25 Scorpion upgrade was completed successfully. There is a large number of Su-25 aircraft in service and we are currently pursuing several opportunities.
Q: The Lancer upgrade to Romania's MiG-21s was clearly well-regarded, but did it result in further MiG-21 upgrade work? Would you agree that the window of opportunity for upgrading Soviet-built combat aircraft is closing?
A: The success of the Lancer MiG-21, the most extensive upgrade programme to date, is largely due to the advanced technologies of Elbit Systems and the highly professional capabilities of Aerostar, our partner in Romania.
We have demonstrated that an existing platform can be upgraded to have the operational capabilities of a modern, NATO-compatible fighter aircraft, making use of latest generation avionics, communications and weapon systems.
The experience and technologies gained in the Lancer MiG 21 program can be readily applied in other upgrade programs, of fixed-wing and helicopter platforms.
Q: Has the company had any further F-5 upgrade contracts, or are any likely? What is the status of the upgrades in Brazil, Thailand and Turkey?
A: The F-5 upgrade programs in Brazil, Thailand and Turkey are progressing according to plans and we believe that these successful programs will lead to additional F-5 upgrades.
Q: Where do you see the group heading over the next three years as there is mounting pressure for consolidation in the global industry.
A: Consolidation in the industry is the only way to assure its long-term profitable growth and development. We, at Elbit Systems, have taken a major step in this direction in accomplishing the merger with El-Op, which has resulted in a broad-based, global defence group.
We continue to pursue M&A opportunities in the US and Europe, and intend to take part in the consolidation of the Israeli defence industry, when it occurs.
Source: Flight Daily News
