Aviation Industry Sources: The Rejection Was Politically Motivated

Airbus Industrie has rejected Israel Aircraft Industries’ (IAI) proposal to manufacture fuselage parts for the future A380 super-jumbo jet. Airbus, a consortium of France, Germany, Spain, and the UK, estimates 1,300 A380s will be sold over the next 20 years.

Aviation industry sources tell ANN's contributor in Israel that Airbus rejected IAI’s proposal for “political reasons." They said Airbus admitted that IAI’s proposal was economically and professionally viable, but the EU poor relations with Israel over its conflict with the Palestinians were a factor in the rejection. A second reason was El Al’s  purchase of new Boeing planes. Lobbying by the US administration on Boeing’s behalf has been noteworthy in recent tenders, including El Al’s.

IAI has been negotiating to participate in the A380 project since 1999. Former IAI VP development and now representative in France Dr. David Harari once said IAI would be a 1-2% risk partner in the project, for an estimated cost of $1.5 billion.

A senior IAI source said that it was hard to disassociate El Al failure to purchase Airbus planes from the European company's decision about possible manufacturing in Israel. Sources at IAI production plant said, “Airbus manufacturing decisions are inherently political. Potential reciprocal procurements from Israel would be a key factor in any decision.”

Airbus’s rejection of IAI’s proposal contradicts statements from 1999 when Airbus Industrie CEO Noel Forgeard discussed the subject with IAI president and CEO Moshe Keret. Airbus Industrie COO Dr. Dietrich Russell visited Israel to handle the negotiations.

Airbus Industrie chief commercial officer John Leahy said in 1999, “IAI can make parts for European super-jumbos similar to those it makes for Boeing, i.e. fuselage parts, avionics, and landing gear.”

Aviation industry sources said, “Airbus was unquestionably displeased by El Al’s preference for Boeing planes. The greatest ever opportunity for Israel’s aerospace industry to participate in European projects would have been created if El Al had chosen Airbus. Airbus expressed a willingness to make reciprocal procurements amounting to 50% of the deal, but the Israeli government deliberately blocked the participation.”

Special thanks to ANN Contributor Dave Bender in Jerusalem, Israel

FMI: www.airbus.com, www.iai.co.il