Israel Aerospace Industries

Israel Aerospace Industries traces back to 1953, when the Israeli government founded Bedek Aviation as a maintenance and overhaul shop next to what is now Ben Gurion Airport in Lod. Renamed Israel Aircraft Industries in 1967 and again to Israel Aerospace Industries in 2006, the firm grew into the country’s largest aerospace prime, wholly owned by the state. It is led today by Boaz Levy, a long-serving IAI engineer who took over as president and CEO in 2021 after running the missiles, space and systems division. The company employed roughly 14,000 people as of 2021 and remains headquartered on the southern edge of the airport campus.

The product portfolio is unusually broad for a single firm. In unmanned systems, the Heron is a medium-altitude long-endurance platform with around 52 hours of endurance at 10.5 km altitude, flown by Israel, Germany, India, France, Australia and several other operators in surveillance and maritime patrol roles. The heavier Heron TP — designated Eitan in Israeli service — adds payload and range and, in armed configurations for export, weapons carriage. Germany leases Heron TPs from IAI through a contract structured with Airbus, and India operates Herons across all three of its services. Alongside the UAVs sit the Harpy and Harop loitering munitions: Harpy is an anti-radiation weapon that flies a search pattern and dives onto any radar that lights up, while Harop, derived from it, adds an electro-optical seeker and a man-in-the-loop option, letting operators redirect or wave it off in flight. Harop has been bought by Azerbaijan, India, Germany and others, and was used extensively by Azerbaijani forces in the 2020 Nagorno-Karabakh war.

IAI’s other large pillar is missile defence. Its Systems, Missiles and Space Group is the prime contractor for the Arrow family of exo-atmospheric ballistic-missile interceptors, developed jointly with Boeing and the US Missile Defense Agency. Arrow-2 entered service in 2000; Arrow-3, which intercepts targets above the atmosphere, became operational in 2017 and recorded its first operational kill against a Houthi ballistic missile fired from Yemen in November 2023. Germany signed a roughly €4 billion deal in 2023 to buy Arrow-3, the largest single arms contract in Israel’s history, with deliveries beginning in 2025 and a production ramp announced in 2026. The company also builds the Barak family of naval and ground-based air-defence missiles and contributes major subsystems to the Ofek reconnaissance satellite series.

Financially, IAI is one of Israel’s largest industrial employers and reports annual revenue in the region of $5 billion, with order backlogs swollen by the Arrow-3 export deals and follow-on Heron contracts. As a fully state-owned firm it does not trade publicly, though successive governments have intermittently floated the idea of a partial IPO.

Controversy tracks the export catalogue. Harop sales to Azerbaijan drew criticism over civilian casualties in Nagorno-Karabakh, and the broader Heron and loitering-munition lines have been scrutinised by European parliaments asking how Israeli systems are used in Gaza. The 2023 Arrow-3 sale to Germany required a US export licence and was negotiated under unusual political pressure as Berlin sought a near-term answer to longer-range threats from Russia and Iran. Through it all, IAI has continued to function as the technical backbone of Israel’s air and missile-defence posture and as one of the few non-Western suppliers of full-stack ballistic-missile interception.