Israeli Defense-Homeland security

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IAI sees $500m revenue from airliner conversions

The company recently completed the conversion of a Boeing 747-200 to cargo for Northwest Airlines.

Hadas Manor 12 Jan 06 17:15

Israel Aircraft Industries Ltd. (IAI) Bedek Aviation group has completed the conversion of a Boeing 747-200 to cargo for Northwest Airlines (OTCBB: NWACQ). This was the 38 airliner conversion completed since the program began in 1988. IAI delivered the cargo plane to Northwest Airlines on December 30, 2005.
The cost of each conversion is $15-20 million. Plane conversion companies consider the business to be both profitable and stable for personnel planning. IAI predicts $500 million in revenue and high profits from airliner conversions through 2009.

Bedek has orders through 2009 for converting Boeing 747-400 passenger planes to cargo, at a cost of $25-30 million per plane. Bedek uses newer technology for converting Boeing 747-400s than for Boeing 747-200s.

Bedek says despite heavy demand for converting Boeing 747-200s to cargo, the group, headed by David Arzi, has decided to stop these conversions. Instead, it will focus on converting the larger and more modern Boeing 747-400s.

Bedek has licenses to convert to cargo other Boeing (NYSE:BA) passenger planes, including Boeing 767-200s and 300. Bedek has converted 18 Boeing 767-300s and 19 Boeing 767-200s to date. Most of the planes also undergo thorough maintenance in addition to the conversion. Bedek plans to obtain a license to convert the Boeing 747-400 passenger plane into the Combi model for carrying special cargo in the fourth quarter of 2006.

Published by Globes [online], Israel business news - www.globes.co.il - on January 12, 2006

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