Aviation Group, a unit of Israel Aerospace Industries (Chalet N41) (IAI) largely devoted to conversions and MRO for the civil airline industry, is looking to cement relationships in the Asia-Pacific region, building on the signing of a deal with China’s HNA Group in 2018.
“China, in general, especially in regard to engines and APUs, is a growing market for P2F [passenger to freighter] programs for Aviation Group,” Yosef Melamed, Aviation Group general manager, told AIN in the run-up to the Singapore Airshow. “We are constantly discussing new opportunities with HNA Group, as well as with many other players in China and other countries in this area. The year 2020 looks promising and we are planning to arrange an MRO conference there during the first half for our customers. On military MRO, we are also considering certain ventures in the Asia-Pacific region with local partners.”
In September 2018, Aviation Group entered into an official supplier agreement worth tens of millions of dollars with China's HNA Group, serving as MRO center for group airlines operating the V2500 engine, with units being sent by the customer to Israel and returned to China following servicing.
Aviation Group is one of a total of five IAI units, which also include Military Aircraft, Systems, Missiles and Space, IAI North America, and Elta Systems, which develops advanced defense and intelligence electronics.
Last year saw the consolidation of a number of IAI subsidiaries into one unified entity. Aviation Group is now IAI’s biggest, divided into four business lines. Two of them focus on the design and manufacture of business jets and aerostructures for major OEMs, while two others are dedicated to MRO, conversions, and upgrades.
“This challenging mission was successfully implemented, creating a profitable group, which includes all the commercial aerospace activities of IAI, plus a significant footprint in the military arena as well,” he said. “Apprehending the importance of MRO, as well as conversion programs, as centers of excellence at IAI, each represents a standalone business line, whereas the operational aspects are jointly managed to drive down cost. We see steady growth in demand for MRO, as well as for conversions, which is reflected in 2019 results.”
Melamed said the Boeing 737 Max crisis delayed Aviation Group's progress on plans for 737NG P2F conversions in Mexico. “We still have a plan to establish a B737-700/800 cargo conversion line, and [are preparing for] the moment that the B737 NG P2F market will demand this capacity. At the moment, while the B737 Max is still grounded, unfortunately, no feedstock is available for the P2F market. The B767 cargo conversion is running in Mexico and the fifth B767 was delivered to [a satisfied] customer.”
He said business jet operations, manufacture, and MRO continue with the company maintaining its long-standing cooperation agreement with Gulfstream on the G280. “On line maintenance services at Ben Gurion International Airport, Tel Aviv, we have increased our customer list, and I can say that IAI’s share is around 70 percent,” he said. “[We are also keen to stress] our capabilities to upgrade all types of helicopters, transport aircraft, and fighters.”