VEB To Help Finance Aeroflot Jet Purchase

By Maria Antonova

The Moscow Times
Tuesday, August 11, 2009

Aeroflot, Sukhoi Civil Aircraft and VEB will sign an agreement next
week under which the bank will finance the delivery of Superjet
aircraft to Aeroflot, Industry and Trade Minister Viktor Khristenko
said Monday.

The sides will sign the contract at the annual MAKS Aviation Salon,
Khristenko said. The event will take place Aug. 18 through 23 in
Zhukovsky, a town in the Moscow region.

Aeroflot ordered 30 Superjets at a discounted price of $21 million,
which was later increased by about $1.4 million because of additional
equipment expenses. VEB is expected to finance 10 aircraft through
its VEB-Leasing subsidiary.

Aeroflot and Armenian airline Armavia are expected to receive the
first two Superjets by the end of the year.

Three aircraft are undergoing testing, and 13 more are in various
stages of completion, Khristenko said. Twenty Superjets will be
produced in 2010, and by 2013 Sukhoi hopes to produce as many as 70
per year.

Sukhoi currently has orders for 122 Superjets.

"I don’t want to speculate on how many more contracts will be
signed during MAKS," Khristenko said. "It’s not the best time to
sign contracts."

Since 2004, state support for the aviation construction industry
increased twentyfold, to about 90 billion rubles ($2.8 billion)
in 2009, Khristenko said.

The substantial government support is meant to "guide the corporations
through the difficult period," Khristenko said, referring to the
three main aviation construction concerns in Russia: the United
Aircraft Corporation, United Engine Building Corporation and Russian

The restructuring of these industries is complete, but the next step,
which is raising capital through share sales, has been postponed
because "it’s bad manners to go public right now," he said.

Steady demand for Russian civilian aircraft can save the industry,
Khristenko said, expressing hope that planned airline Rosavia, a
joint venture between Russian Technologies and the Moscow government,
will become a significant partner for the local industry.

Some analysts have called Rosavia dead in the water, since little
progress has been made on its development. Khristenko was more
optimistic, however, saying of the airline, "I wish them more health
than I do myself."

The Russian industry hopes to take a 5 percent market share for
regional and mid-range planes in 2015 and up to 10 percent by 2025. But
there are currently only two Russian planes ready to begin operations
in this segment: the regional Superjet and the An-148, so "we will
have to work hard" to reach those goals, said Oleg Panteleyev, an
independent analyst.

"But it will be possible in the segments where UAC will have a
product," Panteleyev said.

UAC’s highly awaited candidate for the mid-range segment, the MS-21,
will likely be available only in 2020. Russia has no projects for a
long-range aircraft, Khristenko said.
From: Baghdasarian