With Amos-6 Win, IAI Staves Off Collapse of Israeli Communications Satellite Sector

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TEL AVIV, Israel — State-owned Israel Aerospace Industries (IAI) averted the possible collapse of Israel’s ailing communications satellite sector with its win over Space Systems/Loral for the rights to build the Amos-6 satellite for Spacecom, based here.

Spacecom, the owners and operators of the Amos series of dual-use communications satellites, announced its intention to award an estimated $200 million contract to IAI to deliver the new satellite for launch in the first quarter of 2015.

The contract, details of which must still be finalized, covers satellite construction, a ground control station and operating services for the estimated 16-year life of Amos-6.

IAI’s selection over Palo Alto, Calif.-based Loral, European company Astrium and Russia’s Reshetnev Information Satellite Services was considered a make-or-break deal for Israel’s sole satellite producer and provider of Amos-1 through Amos-4 spacecraft.

The company lost its monopoly over the Amos line in 2008, when Spacecom opted for the far less expensive Amos-5, which was built by Reshetnev.

Since then, IAI has fought hard to win back the rights to Amos-6, instituting sweeping efficiency measures to drive down the costs of the nearly completed Amos-4, the only remaining communications satellite in its backlog.

Once launched later this year, Amos-4 — like the operational Amos-2 and Amos-3 and planned Amos-6 satellites — will provide services in support of the Israeli government as well as commercial customers.

Amos-6 will join Amos-2 and Amos-3 in Spacecom’s 4-degree west orbital slot, and will replace Amos-2 at the end of that satellite’s operational life in 2016.

In a June 25 announcement, IAI’s new chief executive, Joseph Weiss, called the win over “international giants” a “significant leap forward in the capabilities of IAI and the State of Israel in space.”

Weiss, who until recently headed IAI’s Systems, Missiles and Space Group, said the Amos-6 contract has “broader significance” in enabling the company to achieve the type of “independence in the development and production of communications satellites” as it has in the remote sensing satellite sector.

Tal Inbar, head of the Space Research Center at the Fisher Institute for Air and Space Strategic Studies, said IAI’s Amos-6 win marks a vital boost to the state-owned company and “a much-needed vote of confidence” for the local industrial base.

“It would have been a devastating blow to our nation’s ability to produce communications satellites in the future had this competition gone another way,” Inbar said.

But beyond industrial base issues, Spacecom’s selection validated the technology advances and efficiency measures that have been made by Israel Aerospace Industries over the past few years, Inbar said.

“As a publicly traded company, Spacecom is obligated to its shareholders,” he said. “They’re not in the business of philanthropy, and therefore IAI’s bid had to be rock solid and compelling. Otherwise, they would have gone with alternative providers.”

In its June 24 announcement to the Tel Aviv Stock Exchange, Spacecom said that it would enter into a $95 million, 10-year contract “with a significant customer” for Amos-6 satellite services.

The customer, which sources here identified as the Israeli government, will pay $20 million of that amount up front to assist in the IAI satellite build.