Israel is poised to choose between two fighters- Lockheed Martin's F-35 and Boeing's F-15 for its Air Force at a price of $11 billion as a part of its arms procurement plan.
The country had on its list to purchase a squadron of combat jets, 5-7 aircraft for airborne refuelling and transportation helicopters to replace the four-decades-old Yasur (Sea Stallion) helicopters using the US defence aid money. Israel will also invest in new systems to be installed on the aircraft, development of special equipment, operating and maintenance infrastructure, etc, according to a Globes report.
While Lockheed Martin has offered Israel a third squadron of stealth-capable F-35s, new transport helicopters and airborne refuelling planes made by European company Airbus under a strategic cooperation agreement between the two companies; Boeing has proposed to provide a squadron of 25 new F-15 jets, airborne refuelling planes and advanced transportation helicopters.
Israel has previously acquired 50 F-35s at an average price of $100-110 million per aircraft, of which the company has delivered 14.
Israel Defense Forces (IDF) and the ministry plans to take a call by summer this year.
"The decision is in the favour of Boeing's offer. Procuring Lockheed jets along with Boeing's bombers would have been ideal. If there were no budget constraints, the air force would probably choose both options," the report quoted a defence source as saying.
Israel wants a stealth-capable attack plane that can carry a large payload. Trying to expand F-35's munitions payload will reduce its stealth capability. Boeing has offered Israel a customised F-15 IA jet that can carry twice the amount of munitions, but the aircraft lacks stealth capability.
Israeli defence industries are demanding that the MoD choose one of the offers on the basis of the size of the reciprocal procurement commitment in Israel that the company is willing to make.
Since the deal will be funded by US aid money, the country won't be able to demand reciprocal procurement for it, as it did with German company ThyssenKrupp in the submarines deal and Italian company Leonardo in the training aircraft deal. But the MoD is hoping for the companies to make voluntary offer attractive reciprocal procurement from local companies.
In the past, Lockheed had ordered over 800 sets of wings for the F-35 from Israel Aerospace Industries for $311 million; and pilot helmets, which are built-in to the aircraft package, from Elbit Systems' US subsidiary for $1.12 billion. Other Israeli companies supplying components for the stealth fighter include Cyclone (owned by Elbit Systems), SimiGon, Cabiran, Tadiran and Gilboa.
According to a clause in the US defence aid agreement, by 2025, Israel will not be able to convert US aid money from dollars to shekels which will shrink the MoD's shekel budget. This will make it difficult for the country to order products from Israeli companies. The country, thus, will have to spend its entire $3.8 billion in US military aid in the US.