A corporate reorganization and reduction followed the end of the Lavi program. The Company embarked on a new and expanded scope of activities based on IAI's responsibility and central role in the economy and security of Israel.

Advanced radar systems, EW systems, precision weapon systems, navigational and electro-optic systems, missiles, and unmanned air vehicles (UAVs) were developed. Commercial and military aircraft conversion; tankers; early warning, command and control aircraft; intelligence gathering systems and other fields were broadened and enhanced. IAI's marketing infrastructure was bolstered and joint ventures with foreign companies begun with the Lavi project served to expand connections and open doors to new markets. The Company's cumulative experience was applied to space and missilery.

IAI expanded its UAV activity, which became one of its main fields and has made the Company number one in the world in this technology. Several important contracts for aircraft upgrading were signed and Bedek expanded into Boeing 747 passenger-to-cargo conversions. New customers were acquired and IAI significantly increased exports.