TEL AVIV — Elbit Systems began the year with US $190 million in long-term business from two new private financing initiative (PFI) outsourcing deals with Israel's Ministry of Defense.
The first, announced Sunday, Jan. 4, is an 11-year contract to maintain front-line fighter avionics systems on behalf of the Israel Air Force (IAF).
Under the estimated $90 million award, the Haifa-based firm will build, own and operate a national avionics subsystems maintenance center to be co-located at a major IAF base.
The second, announced Monday, is an eight-year follow-on contract to provide, operate and maintain a full squadron of aircraft dedicated to national firefighting missions.
Elbit was selected as Israel's provider of emergency firefighting planes following a December 2010 fire that raged through the Carmel Mountain area near Haifa over four days, killing more than 40.
Under its first PFI award from MoD, Elbit acquired eight aircraft from Olney, Texas-based Air Tractor and established airstrips and operational procedures in coordination with the IAF, the National Parks Authority and ground-based firefighting authorities.
Since the initial firefighting squadron began operating in early 2011, Elbit and Chim-Nir.a locally based firm that provides pilots to Elbit under subcontract, have accrued some 2,500 flight hours in more than 4,600 missions, according to the firm.
Under the latest contract, Elbit will acquire another six AT-802s from Air Tractor and expand the number of airfields and the personnel needed to operate and maintain the US-built planes.
In its Monday Jan. 5 announcement, Elbit noted that each of the single-engine aircraft carries up to 3,000 liters of water and can fly up to three hours without refueling.
"This is an Elbit squadron, under supervision of the IAF and in cooperation with other relevant authorities," said Bezhalel (Butzi) Machlis, Elbit president and chief executive officer.
In a Jan. 5 interview, Machlis said the latest MoD contract allows Elbit to expand the firefighting squadron to a full 14 aircraft and be prepared to provide rapid responses to emergencies nationwide.
"The government of Israel gave MoD the authority for this national mission and MoD, in turn, entrusted us with implementing the mission," he said. "We will provide different solutions to different kinds of fires, which we hope won't happen."
"It's a huge show of confidence in our capabilities; but also a tremendous responsibility," he added.
The twin contracts follow a slew of outsourcing programs awarded to Elbit or Elbit-led subsidiaries over the past decade in support of the IAF's entire air and ground-based training program, from screener aircraft to the new M-346 advanced trainers.
The firm also provides outsourcing support for IAF-owned Hermes 450 unmanned aerial vehicles (UAVs) and communication equipment used by the Israel Defense Forces.
Internationally, Elbit operates PFI projects in Brazil and in the United States, where M7 Aerospace, its fully owned, San Antonio, Texas-based subsidiary, provides engineering, upgrade, support, maintenance services for the US military aircraft.
"Outsourcing is a growing global trend which we correctly identified early on," Machlis said. "It offers an efficient, cost-effective economic option for our customers and allows us to foster strategic ties in key markets."
Opall-Rome is Israel bureau chief for Defense News. She has been covering U.S.-Israel strategic cooperation, Mideast security and missile defense since May 1988. She lives north of Tel Aviv. Visit her website at www.opall-rome.com.
