More action from Aeroflot aimed at establishing their committment to the domestic aerospace industry

Published: 2/11/2000

Despite recent rumours of the merger of the Tu-214 programme into that of the Tu-204, it seems that Aeroflot has chosen the 210 seat Tu-214 as a replacement for its aging long haul fleet, in a wide ranging agreement along with ANTK Tupolev and the Kazan aircraft plant (KAPO). Aeroflot has been a buyer of the 6,500km range aircraft for some time, signing an agreement with KAPO as far back as September 1997, to acquire four Kazan built Tu-214s. It looks as if the recent pressure to buy Russian is generating an PR overdrive, in order to prove the airline"s commitment to the industry, after accusations of bribery relating to imported aircraft and complaints from the airline"s trade unions. In a statement, Aeroflot confirmed that Valery Okulov, General Director, had agreed to cooperation with Tupolev and KAPO, in order to assist them in gaining orders for the aircraft, which was originally specified in the mid-eighties as a replacement for the Soviet Union"s fleet of Il-62 and the Tu-154. The programme, agreed between the three parties, will allow Aeroflot to work closely with the manufacturer and the designer, to develop the aircraft, along with the Tu-204 and Tu-334, to meet its ongoing requirements in terms of modernizing its fleet over the next 15 years. The coordinated establishment of a national leasing structure was also included as part of the agreement, although no details were given on the financing and organisation of the scheme, except for the mention of sovereign guarantees. The aircraft is planned to be certified under Russian AP-25 and should be completed by the end of the first half of 2000, although it has been put back a number of times during the last twelve months. KAPO will then build two aircraft this year: the first in the third quarter and the second at the end of the year, according to the plant. It is reported that the Republic of Tatarstan will provide an additional $14.2m of funding for the project, on top of substantial commitments over the last two years, to keep the languishing programme alive. This money is not new and may be the funding, announced in October 1999, by state-owned Tatar Sberbank, with the Republic"s budget picking up the interest payments. This funding was offered as part of a discussion for funding the possible acquisition, by Sibir, of three aircraft, with assistance from the administrations of Novosibirsk, Perm and Tartarstan. The agreement, instigated by the Perm based Avialeasing and reportedly signed in November 1999, took regional funds in return for revenue sharing from operational aircraft. Although little has been heard of the proposal since then. The Russian Aerospace Agency will contribute an additional $1.7m to complete and finish in 2000 four airframes out of the reported six in Kazan. Under the agreement Aeroflot has said “it intends to acquire" a number of the PS-90 engined Tu-214s from KAPO, offering considerable cost savings over the Il-62 currently being operated on long haul flights to the Far East and recently the west coast of the United States. These are in need of imminent replacement. The agreement however, seems to follow a fairly well trodden path on the part of Aeroflot, which has yielded little business for the industry in the past decade. Circumstances have, however, changed in the last twelve months, as those airlines operating foreign aircraft have struggled to finance the leased aircraft, at a time when there has been considerable government pressure to fulfil the obligation to match foreign acquisitions with domestically produced aircraft. The benefit of dealing with a domestic producer, in the absence of an established leasing structure, is that financing can often be unconventionally structured as shared revenue arrangements, in return for financing the completion of aircraft.Agreements in Russia have tended however, to become a substitute for meaningful action. This agreement may prove more concrete, given current circumstances, but an imminent delivery still seems unlikely. Associated articles: www.concise.org 25th September 1997;15th February 1999;25th October 1999; 2nd November 1999; 23rd November 1999;29th December 1999

Article ID: 1410