Business Breakthrough for sales of L-159 to Iraq in sight

08-04-2014 15:27 | Chris Johnstone

A breakthrough in foreign sales for the Czech Republic’s biggest aviation company is again being promised. But after hopes being dashed so many times before, Aero Vodochody will have to wait until the final deal is done to be sure.

L-159 Alca, photo: Czech ArmyL-159 Alca, photo: Czech Army The L-159 Alca sub sonic light fighter and trainer jet was an ambitious Czech project which has never fulfilled its promise. Seventy-two aircraft were produced for the Czech army but only around 25 are now in service with the rest in the aviation equivalent of mothballs with the defence ministry picking up the bill for storage.

Czech attempts to offload the excess planes would bring a one-off windfall for the army and represent a substantial boost to manufacturer Aero Vodochody, which could point to the fact that another country has the confidence to buy the planes. A deal at the end of 2013 for US based aircraft lease and aircraft training company Draken International to take up to 28 of the stored planes does not have quite the same cachet.

After intensive negotiations over the weekend, the middleman in the sales scenario, Aero Vodochody, says it has now sealed an agreement, estimated to be worth around 4 billion crowns, with Iraq to sell 12 of the Czech sub-sonic planes. Final clearance from the Czech Ministry of Defense and Iraqi government are still needed though.

There is some déjà vu to this deal. The Czechs and Iraqi seemed on the verge of a bigger 12 billion crown deal for 24 planes back in 2012 but this eventually fell through when the Iraqis started to look elsewhere.

Iraqi interest in concluding a deal this time round has been fueled by the fact that the first F-16 fighter jets from the US should be delivered in September this year but the country still has no trainer planes for its pilots. The L-159 is reputed to be ideal preparation for the US jet.

But the latest Iraq purchase specifications could cause some headaches. They are, reportedly, seeking 10 single seat L-159 Alca and two double seat versions. The problem here is that there are no double seaters in the army stock and four single seaters would have to be cannibalized to get two such planes. A special commission from the Czech army is expected to report back by mid-April on how the Iraqi wish list can be reconciled with the planes available.

One condition which has proved an unsurmountable obstacle to past L-159 deals is US government approval for the sales of planes packed with American avionics and other know-how. This time around though with Iraq there should be no problem.

But a risk to the nascent deal is represented by nationwide parliamentary elections in Iraq scheduled for the end of this month. Current Prime Minister Nouri al-Maliki’s grip on power will be tested and the country could well be without a government for many months while coalition talks continue.

Meanwhile, Aero owner, the Czech-Slovak Penta group, is downplaying the likelihood that it could sell up its stake in the plane maker and sub-contractor although it could probably get a better price if the L-159 deal goes through. A tripling of Aero’s turnover by the end of 2017 is still being counted on with a follow up version of the L-159 one of the projects in play, a Penta spokesman said.

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