Israel Aerospace Industries (IAI)

Established in 1953 as Bedek Aviation Company ­– a governmental institute for aviation – Israel Aerospace Industries (AIA) started out focusing on aircraft maintenance and overhaul. The company originally had 70 employees and recruited American-born aviation expert Al Schwimmer as the company’s founder and first president.

In the decades since, the company has grown to become a world leader in both the defense and commercial markets, developing, producing, and delivering state-of-the-art technologies and systems across a range of domains, including air, land, sea, space, cyber, and homeland security.

In 1959, IAI began to design and manufacture aircraft and advanced land and seaborne systems. Its first aircraft, a twinjet trainer of French design, the Fouga CM.170 Magister (Zukit), was the Israeli Air Force’s principal trainer for 50 years and was also used in the Six-Day War.

IAI developed its first missile in 1964, the Gabriel sea-to-sea missile, which has been upgraded over the years and remains in service with navies worldwide. In 1967, the ELTA subsidiary was created to specialize in defense electronics. 

In 1968, IAI acquired the rights to manufacture the Jet Commander executive aircraft from the U.S. company Rockwell, which eventually evolved into the IAI’s Astra. In 1969, the Arava became the first indigenous aircraft to be fully designed, manufactured, and licensed in Israel. It remained in production until 1988.

In the 1990s, IAI began producing the Galaxy executive jet in partnership with the Pritzker family of Chicago. In April 2001, General Dynamics contracted to purchase the Galaxy firm for approximately $600 million. In addition, in the late 1970s, Bedek, a division of IAI specializing in aircraft maintenance, began overhauling and refitting Boeing 707 airliners, and today the upgrade of commercial aircraft has become a major business for IAI.

Israel’s principal arms supplier before the 1967 War was France; however, the country instituted an arms embargo during the war, which prompted Israel to develop its own fighter.  IAI followed this up the following year with the Nesher fighter jet. The first Israeli bomber, the Kfir, was introduced in 1975. Four years later, the first unmanned aircraft was produced. In 1986, the Lavi fighter was flown for the first time, but the project was killed by the Israeli government due to cost and the decision to rely on U.S.-made planes.

Israel launched its first satellite, Ofek I, from the locally built Shavit launch vehicle on September 19, 1988. With that launch, Israel joined an exclusive club of countries that have developed, produced, and launched their own satellites. In 1996, the first communications satellite, AMOS 1, was launched.

In 1990, IAI first tested the Arrow anti-ballistic missile system. Its most recent incarnation is the Arrow III. The following year IAI introduced the Barak naval defense system. In 1996, it manufactured the Super Dvora patrol boat.

In the following years, more advanced versions of the various systems were developed.

In 2006, IAI changed its corporate name from Israel Aircraft Industries Ltd. to Israel Aerospace Industries Ltd. to more accurately reflect the scope of the firm’s business activities, which includes not just aircraft but also systems, satellites, and launchers, as well as maritime and ground systems.

IAI’s contacts with U.S. suppliers advanced from subcontracting jobs to joint ventures with Boeing and Lockheed Martin. The U.S. government has also provided funding for the development of some IAI systems, including the Arrow.

In 2019, IAI co-developed a lunar lander that orbited the moon but failed to land on its surface.

Today, the company offers “a vast portfolio producing air and missile defense, unmanned aerial systems (UAS), ground robotics, precision-guided weapons, and loitering munitions… and delivers “special-mission aircraft, modernize military aircraft and helicopters, and convert passenger jets into cargo aircraft through modification, conversion, and system integration.”

IAI has become one of the world largest exporters of military equipment and services. In 2022, its revenue was a record $5 billion.

Source: Israel Aerospace Industries.
“Israel Aerospace Industries,” Wikipedia.
“IAI’s Annual Financial Statements for 2022 – the Best Year Since the Company's Inception,” IAI, (March 8, 2023).