The stars align: advantage for IAI in deal for sale of satellite to Vietnam

Israel Aerospace Industries teamed up with Airbus, which is competing with Thales to supply a military spy satellite to Vietnam. The French government is still trying to split the pie between the French giants in the deal that will be worth hundreds of millions of dollars if it goes through

The stars align: advantage for IAI in deal for sale of satellite to Vietnam

Boaz Levy, CEO of IAI. Photo: IAI

A report by intelligenceonline claims that the leader of Vietnam, Nguyen Phu Trong, who is general secretary of the country's communist party, decided to order a military observation satellite with a resolution of up to 50cm from Israel Aerospace Industries (IAI).  

The new prime minister of Vietnam, Pham Minh Chinh, who is in charge of the acquisition project, discussed the deal over the phone with his Israeli counterpart Naftali Bennett on July 12, according to the report. "He first visited Israel about the deal back in July 2019 as head of Vietnam's intelligence service," the report said.   

Vietnam's satellite program, called VNREDSat-2, includes both military and civilian components. The competition for the military contract got underway in earnest in 2018 between Lockheed Martin, IAI and a consortium of Airbus Group, and a subsidiary of Thales. 

The French government tried to make Airbus and Thales agree to handle the civilian and military parts of the deal, respectively. However, Airbus went forward and offered a military version of a satellite, but the offer did not meet the technological demands of the Vietnamese government.  

In the meantime, in 2018 and 2019, influential businesswoman Nguyen Thi Thanh Nhan, chairperson of the AIC Group, established contacts between Vietnam and Israel via Haya Meshel, her representative in Tel Aviv and Singapore. IAI, which had already sold a Heron drone to Hanoi, made an official offer. It was technologically inferior to that of Thales, but it was supported by the Israeli government, according to the report.    

It should be pointed out that the deal has yet to be completed and the money has yet to be transferred to IAI. If the deal goes through, it will be for a satellite estimated to cost hundreds of millions of dollars. 

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