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Israel likely to Raise U.S. Fighter Jet Order

February 23, 1999 (by Lieven Dewitte) - Israel has raised the stakes in its tender for fighter planes, telling Lockheed Martin Ltd. and Boeing Co it would spend up to $4 billion on the order expected by May. The two companies are in the final stage of a competition which began in late 1997. At the time Israel said it had about $2.5 billion to spend on new planes. A little while ago they asked LAMTAS for prices on a range of 30 to 110 planes.
Industry sources said that sixty planes would cost in the region of $2.5 billion, while 110 planes would cost some $4 billion. The larger the order the cheaper the price of each individual plane.

Some air force officials have speculated Israel will ultimately split the contract, buying some planes from Boeing and some from Lockheed. Aircraft industry sources said Israel's Defense Ministry had made a similar request for prices from Boeing. Both companies will issue their final offers in April. Israel's Defense Ministry said it expected to award the contract in May of this year.

The air force has been pressing Defense Ministry officials to expand the tender, citing Israel's need for at least 100 planes to replace aging models. Israel will pay for the planes from the $1.8 billion it receives in annual military aid from the United States. Lockheed, which lost the last Israeli aircraft tender to Boeing in 1994, said its single-engine F-16 aircraft could now fly as far as the twin-engine F-15I offered by Boeing. Lockheed has developed attachable fuel tanks that increased the range of the F-16's radius of operations to 1, 500km (800 miles). Israel chose the F-15I five years ago over the cheaper Lockheed model to counter perceived threats from Iran, which is developing long-range missiles and -- Israel says -- non-conventional warheads.

Israeli pilots tested the F-16 in the United States this year fitted with the new fuel tanks. Lockheed's planes are expected to cost between $30 million and $40 million each which would be about half the price of Boeing's aircraft. Israel paid about $80 million for each of the 25 F-15I aircraft it bought from Boeing in 1994 but industry sources said much of that money went for infrastructure that would not have to be purchased again. However, this time Boeing's plane will probably cost Israel about $50 to $60million each.