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Israel Completes $1B Jet Trainer Deal

Jul. 19, 2012 - 02:25PM   |  
By TOM KINGTON   |   Comments
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Israel has finalized its $1 billion deal to purchase 30 Alenia Aermacchi M-346 jet trainers to replace its A-4 Skyhawks, with the first delivery expected in mid-2014, Alenia Aermacchi said in a statement July 19.

The deal, which covers aircraft, engines, maintenance, logistics, simulators and training, is worth $600 million to the Italian firm, which is a unit of Finmeccanica.

Israel’s selection of the M-346, which has already been purchased by Italy and Singapore, was announced in February, but was followed by complex negotiations over a compensation package involving Italian purchases of Israeli technology.

In its statement, Finmeccanica referred to the Italian purchase of two Conformal Airborne Early Warning aircraft for the Italian Air Force, suggesting Italy has committed to buying two Israeli Gulfstream AEW aircraft as part of the compensation for the M-346 buy.

Finmeccanica unit Selex Elsag has been awarded a $41 million contract through Israel’s Elta Systems for the supply of “NATO-standard subsystems for communications, tactical links and identification” for the two aircraft. The firm has also been contracted to supply the “identification, communications and computer systems for flight control” of the 30 M-346 aircraft, Finmeccanica said.

Announcing the M-346 deal, Finmeccanica also said that Italy would acquire a high-resolution optical military satellite for Earth observation called OPTSAT-3000, built by Israel Aerospace Industries/MBT Space Division.

Italian satellite services company Telespazio, which is controlled by Finmeccanica, will act as prime contractor in the deal, and has signed a $200 million euro ($245.4 million) contract with the Italian Ministry of Defense. Telespazio will provide the entire system, including ground segment, launch services, placement in orbit and operational and logistical activities. Delivery of the satellite is planned in 2015.

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