#AceFinanceReport – June.14: IAI confirmed the agreement was signed with Airbus to lease the company’s Heron TP Medium Altitude Long Endurance (MALE) RPASs (remotely piloted air vehicle system) to Germany’s Federal Ministry of Defence pending approval of the German federal budget, which is expected in the second half of 2018 #AceFinanceDesk reports
Under the nine-year deal, Airbus DS Airborne Solutions GmbH will serve as the prime contractor responsible for managing all aspects of the project, including operational support and maintenance throughout the term of the agreement.
Israeli Prime Minister Benjamin Netanyahu commended the German government and parliament for approving the deal, stating that he discussed it with German Chancellor Merkel during his meeting with her in Berlin last week.
“This is a great contribution to the Israeli security industry and to the Israeli economy. The giant deal is an expression of the strategic partnership between Germany and Israel and attests to the potential of Israeli industry to contribute to countries such as Germany,” Netanyahu said.
According to reports in Hebrew media, details of the deal include a payment of approximately €720 million to IAI for the leasing of the drones and another €180 billion to be transferred directly to the government of Israel for the use of airports and other infrastructures that belong to the Air Force.
The drones will serve as a stop-gap measure for the German army before a European-based system is introduced.
The Heron TPs are IAI’s most advanced UAVs with a 40h endurance, maximum take-off weight of 11,685 pounds and a payload of 2,204-pounds. They can be used for both reconnaissance as well as combat and support roles and can carry air-to-ground missiles to take out hostile targets.
In early April it was reported that Germany was set to sign a €1 billion contract with IAI to lease five armed Heron-TP UAVs but the deal faced opposition from the center-left Social Democrats (SPD) because the drones could be equipped with weapons.
According to DPA, Defense Minister Ursula von der Leyen stated that the decision marks “an important signal” to the German army as the UAVs could deliver images with better resolution, fly longer distances and provide the German Army with intelligence capabilities and support for its missions around the world.
In 2009, IAI delivered Heron-1 systems to the German air force that became operational six months later and have since been used extensively in collaboration with Airbus, which handles the upkeep of the drone.
The deal comes several months after IAI opened a new office in the German capital of Berlin to support its growing business in the European market.
The office replaced the company’s market in Paris “due to Germany’s central role in Europe and its strong alliance with Israel,” read a statement released by IAI at the time, adding that Germany is regarded as a key European market and as a partner for co-development of defense and aeronautic technologies.
“We regard Europe in general and Germany in particular as high-potential markets for military and civilian solutions,” IAI executive vice president of marketing Eli Alfassi said. “The opening of the Berlin office is part of our marketing strategy to bring our technological solutions closer to our customers and personalize them to their needs with high quality and in real time.”
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