Show me the money

Published: 5/12/2000

Following the launch of the efforts of Ilyushin to set up a leasing company with $200m of funding from state controlled banks Vneshkombank and Sberbank, in the form of the Ilyushin Finance Company, Aviastar have proposed to Tupolev the formation of their own company to compete. As yet unnamed, the company will, according to reports, seek to lease aircraft produced at Aviastar including the Tu-204 and the An-124-100, but will also consider aircraft not in production such as the Yak-40 and Tu-134. Tupolev according to Vasily Alexandrov, Tupolev's General Director, has accepted the formation of the new vehicle although the structure and the funding of the new vehicle however, remains unresolved. If it is formed, it seems likely that the two entities will be involved, plus the new Tupolev company in which the two have significant interests. The new venture does not appear to have any commitment of external capital at present and the output of the factory is, according to reports, pledged to the banks that have been providing the plant with working capital and their reaction to the proposed scheme is unknown. In reality the scheme appears to be a knee jerk reaction to the establishment of Ilyushin's venture and its publicly stated desire to undertake leasing of both Ilyushin and Tupolev products. The Ilyushin venture still requires additional funding according to sources within the company, but it is significantly ahead of the unnamed Tupolev entity, having been under development for the last couple of years and has recruited some powerful allies. The formation of another leasing company in this area is also not particularly positive at present. Given the risk that it will dilute the little available capital from state or state controlled sources for the leasing of Russian built aircraft and slow the momentum of what appears to be the best hope of a major leasing structure currently available.

Article ID: 1767