UPDATE: Russian Holding Says Aeroflot Pact Seals Boeing Order
04 June 2010 - 6:29PM
Dow Jones News
Russian flag carrier OAO Aeroflot (AFLT.RS) Friday signed a
leasing agreement with Rostekhnologii, a Kremlin-controlled holding
company that said the deal will guarantee a recent order from
Boeing Co. (BA) that is worth up to $2.5 billion.
Rostekhnologii last year launched a tender for the planes on
behalf of six regional airlines that it then owned, but the holding
later ceded control of those companies to Aeroflot, which has been
favoring Airbuses for its own fleet.
Boeing earlier this week beat Airbus to the Rostekhnologii
tender for up to 65 planes, but the Russian holding--whose titanium
business Vsmpo-Avisa is a major Boeing supplier--didn't say why it
needed the planes after giving up the regional carriers.
Although Rostekhnologii hasn't said whether the deal with Boeing
is binding, it now wants Aeroflot to take the planes.
In a joint statement, Aeroflot and Rostekhnologii, said they
have signed an agreement to "cooperate in the purchase and lease of
passenger planes."
Rostekhnologii adviser Roman Pakhomov said the holding will
create an aircraft leasing company, possibly in partnership with a
bank or state export agency, that will buy the planes and lease
them to the six regional airlines controlled by Aeroflot.
"Unfortunately, no one can put it in a contract yet saying that
Aeroflot will be buying the planes," he said, adding that he
expects that to happen in autumn.
An Aeroflot spokesman said that the airline is still reviewing
the strategy for the six regional carriers, adding that the
agreement with Rostekhnologii requires the holding company to offer
better leasing terms than other available proposals.
Aeroflot's own fleet of planes is made up of both Airbus and
Boeing planes, but its US-made aircraft are mostly used for
long-distance routes. It has orders in for Boeing 787 aircraft,
which are delayed due to production problems.
Aeroflot hasn't yet confirmed that it will integrate the six
regional airlines into its core operations--it wants to change
their route maps first--but Rostekhnologii's Pakhomov said that it
still makes sense for the airlines to buy from Boeing because it
already use aircraft from the manufacturer.
Like Rostekhnologii, Aeroflot is controlled by the Russian
government, but Russia's flag-carrier also has private
shareholders, most notably Alexander Lebedev, the tycoon who
recently bought loss-making U.K. newspapers The Independent and
Independent on Sunday.
When Rostekhnologii gave up control of its six regional airlines
earlier this year, some analysts said the government wanted to
guarantee that Aeroflot had the financial muscle to support the
Russia's domestic aircraft-making industry.
As well as Rostekhnologii's titanium supplies to Boeing, other
state-controlled companies work closely with Airbus, and domestic
manufacturer Sukhoi is making its own regional jet, the
SSJ-100.
Russian newspaper Kommersant on Friday suggested that
Rostekhnologii's commitment to Boeing was a political compromise,
after the U.S. state department lifted sanctions on its
Rosoboronexport business, which is responsible for all Russian
military exports.
-By Will Bland, Dow Jones Newswires; +7 495 232 9198;
william.bland@dowjones.com