IAI Loses $1.5 Billion South Korea Early-warning Aircraft Tender

Boeing won because of concern over technology export permits, Israelis surmise

Boeing has been chosen to supply South Korea with early-warning aircraft, the South Korea defense ministry announced on Thursday

Boeing asked for totaled $1.65 billion for the technology. Yet an American-Israeli bid from Elta, a subsidiary of Israel Aircraft Industries, Gulfstream and DRS, for $1.15 billion, was rejected.

Israelis think that the Israeli-American group failed to convince the Koreans it would be able to receive export licenses for all of the technologies it was offering them.

According to the terms of use for military technology, American approval is required for exports of American technology or products to a third country.

The meaning of this for IAI is mostly the loss of future income. Defense sources said no firings are expected at Elta as a result of the loss, because the company has other foreign customers with existing contracts.

Elta, the most profitable company in the IAI, is not expected to post a loss as a result of the loss of the tender.

IAI will also lose out in the field of technology - the company was supposed to be exposed to new technologies from DRS for integration between air and ground systems.