The prototype was finished in 1938 and the production began in 1940. Till the beginning of the World War II, in April 1941, only 12 airplanes were finished. Six were in service at 51st Independent Fighter Group of the 6th Fighter Aviation Regiment, which defended the capital Belgrade. They held their own against the Messerschmitt Bf 109 (Bf 109E) planes, during the German invasion. Three IK-3s were shot down, while 7 Messerschmitts were also gunned down and one was damaged. The three remaining IK-3s were destroyed by their crews on the ground, in order not to get captured by the advancing Germans. The factory was located in the neighborhood of Palilula, bounded by the streets of "Stanoja Glavaša", "Dalmatinska", "Starine Novaka" and "Kneza Danila". The new Communist authorities nationalized the company, merged it into Ikarus in 1946, while the facilities were transformed into the IKL (ball bearing factory) in 1948. The complex was demolished and in 2015 construction of the residential and commercial neighborhood of "Central Garden" began, which should include the 16-storey "Business Garden Tower". In 1927 the "Zmaj" factory was established in Zemun. Full name was "Fabrika aeroplana i hidroplana - Zmaj, Petrović i Šterić" ("Airplane and flying boats factory Zmaj - Petrović & Šterić"). From the early 1930s the factory began producing the state's first training planes, training flying boats and the trainer fighter aircraft, using French design. During the 1927-41 period, 126 licensed (foreign designed) planes were produced, with additional 220 locally designed ones. Production of the locally designed planes began in 1932. The factory produced, among others, fighters Hawker Hurricane, Hawker Fury and Dewoitine D.27, trainer Zmaj Fizir FP-2, and passenger transporter Spartan Cruiser for the Aeroput Air Traffic Society, the first air traffic company in Serbia and precursor of the modern Air Serbia. After 1946, the company was adapted for the production of the agricultural machines, while the aircraft section was merged into Ikarus. In 1924 the Air Force decided to build an aircraft factory for its own needs, deep inside the state's territory. In September 1926, on the Divlje Polje locality near Kraljevo, construction of the new plant for the construction and repair of the aircraft began, which was finished in 1927.