Israel Aircraft Industries (IAI) is targeting growth in its commercial aviation business following the publication of stronger 2005 results.
Chairman of the company’s board of directors Yair Shamir says “I see great importance in the continuation of growth in both areas, until they become equal. Today, IAI’s commercial business constitutes approximately 35% of total sales.”
The company is forecasting continuing growth in sales, profit and orders in 2006 on the back of its current “substantial backlog.” The company signed new contracts worth $3.4 billion in 2005, leaving it with a backlog of $6.3 billion at the end of the year, compared with $5.4 billion a year earlier.
But excess employment costs have prevented any further rise in profits. Company sources say there are at least 600 "superfluous" employees working for IAI but the strength of the union means redundancies are not possible.
“Tightening control in project management and driving an organisational culture that strives for constant improvement and innovation will bring about an additional substantial improvement in the company’s performance,” adds president and chief executive Itzhak Nissan.
IAI has seen a 14% increase in 2005 sales to $2.34 billion. Net profit was five times higher than the previous year at $25 million, but high costs related to employment prevented a further increase.
In the first quarter of 2006, IAI signed new contracts worth $1.7 billion.
IAI says a contract with the India for AEW aircraft through its Elta division, as well as major UAV deals with the Australian and Israeli air forces have contributed in particular to its 2005 order backlog.
Source: Flight International
