On the Record with MOHE KERET, PRESIDENT, ISRAEL AIRCRAFT INDUSTRIES
Does the trend toward modern, network-centric and asymmetric warfare
reap rewards for non-U.S. aerospace companies? Can the few who
were moving in this direction benefit now from the new trends?
"We see the trend, that was known for some time, where air
dominance, extensive use of intelligence, command and control,
and precision strikes are changing the face of war," says
Mohe Keret, president of Israel Aircraft Industries. "Modern
air power must be more accurate and decisive. Air strikes must
focus precisely on the right target, while minimizing collateral
damage and the number of casualties. This is a way to make the
act of war tolerated by public opinion. The elements were known
before, but dramatically demonstrated in the Iraq.
"In this type of war, the integration between unmanned aircraft
and intelligence systems of all types, command control and communications,
and precision strike weapons is a key. The proof of these capabilities
in a full-scale war will drive to a growth in the total market,
as well as in the number of players in each segments-integrated
digital systems, sensor and information fusion, real-time intelligence-will
be in the focus of interest for future years."
Keret believes that, having demonstrated its capabilities in Iraq
and Afghanistan, the USA is bound to take the lion's share of
the post-war market, but notes, "We at IAI has been active
in all these areas for many years, and continue to develop and
invest in future programs, to ensure our leading position in these
markets. We expect that the lessons learned from the recent conflict
will open more markets for our products, and make our traditional
markets more receptive to the promotions of such systems."
The downturn in commercial aviation has impacted IAI's civil aviation
and commercial space activity. Nevertheless, 2002 was a record
year for new orders. "We signed new contracts worth $3 billion,
an all-time record for IAI," Keret told Show News. "Our
total backlog has grown to $5 billion and over two years of work.
I hope that as the market rebounds, our growth will also accelerate
to a higher pace.
"My expectations were that by the end of the Iraq war, the
market would move into a growth trend, after the end of the period
of instability. However, the commercial aviation market is still
declining, and is far from recovery, especially due to the effects
SARS has had on air travel to and from Asia. I expect we will
feel the positive post-war effects by next year. When it happens,
commercial aviation, MRO services and business aviation will recover
quickly; markets have suffered a lot from the economic slow-down
caused after the 9/11 and other terrorist actions. Since it is
a basic service for the modern world, I am optimistic about the
future of the commercial aviation, at least for the medium- and
long-term."
For the future IAI intends to capitalize on its long record of cooperation
with foreign partners. "In recent years we expanded our partnerships
in India, Australia, Latin-America and the USA, say Keret. "We
expect to add more joint ventures this year, particularly in the
USA, Europe and Asia. Two examples are the cooperation with Boeing
for joint production and marketing of the Arrow ballistic missile
interceptor, and cooperation with HAL of India on development and
worldwide marketing of a new version of the ALH utility helicopter.
Another successful agreement was signed last year with Gulfstream,
to develop the Gulfstream 150 executive jet."
