The Boeing Company, the world’s second-largest maker of commercial aircraft, announced a $3.5 billion sale of airplanes to Aeroflot, the Russian national airline, in a deal that confronted the resentful political relations between the US and Russia. Boeing clinched the deal ending a high-stakes battle with its European rival, Airbus, and stamped as a vote of confidence in the quality of its new 787 Dreamliner airplane. The model is selling rapidly even in countries otherwise reluctant to support American businesses. Boeing and state-run Aeroflot signed the deal on Saturday at the St. Petersburg International Economic Forum, which received presence of more than 200 companies. The first of the 787-8 Dreamliners will be delivered to Aeroflot in 2014, Chief Executive Officer Valery Okulov said on the occasion.
The Boeing sale to Russia was deferred as relations between the US and Russia deteriorated after US officials accused President Vladimir Putin of obstructing democracy. Negotiations between Aeroflot and Boeing hindered after the US State Department imposed sanctions on Sukhoi, a Boeing collaborator even at the time, although the company is well known as a maker of fighter jets, for doing business in Iran. Sukhoi was one of seven companies in Russia, Cuba, North Korea and India sanctioned under the 2000 Iran Nonproliferation Act.
In the meanwhile Airbus SAS had won a promise in March from Aeroflot to purchase 22 A350s valued at $4.4 billion after competing with Boeing for more than a year. When asked whether the revival of the order would affect an earlier tentative deal to buy 22 planes from rival Airbus, Aeroflot CEO Valery Okulov said a firm order would be signed later in the year. However, reports suggest that Aeroflot is likely to sign a contract for the Airbus jets the air show in June in Paris or in August in Moscow.
Scott E. Carson, the executive vice president of Boeing, also pledged to help out the Russian aerospace company, Sukhoi, with global marketing and after-sales support for the company’s Russian-made regional aircraft, the Superjet. In addition, Boeing also inked a wide-ranging cooperation accord with the Unified Aircraft Corporation, a state-owned holding company being created by the Kremlin to revitalize the domestic aircraft industry. At the economic forum, Boeing signed a deal with Sukhoi Aircraft Corporation to increase its contribution in the Sukhoi Superjet-100 (SSJ) regional jet project to cover after-sales services and personnel training.
The SuperJet-100 project is a genus of medium-range passenger aircraft developed by the Sukhoi Design Bureau in cooperation with major American and European aviation corporations. The production of this aircraft is tentatively scheduled to be launched in 2008. Sukhoi is planning to manufacture at least 700 RRJs, and expects to sell 35 percent of them to North America, 25 percent to Europe, 10 percent to Latin America, and 7 percent to Russia and China.
Strategically, the airline’s deal with Boeing, which the Moscow halted in 2006 in the middle of cold-hearted relations with Washington, is Russia’s reply to Europe’s negative response to permit Russia greater involvement in running the European Aeronautic Defence and Space Company (EADS), which controls Airbus. Russia’s state-controlled Vneshtorgbank bank had acquired around 5 percent stake of EADS for $1 billion last year. Further Russia’s attempts to increase the stake were politely repulsed. France and Germany are the chief shareholders in EADS.
This time around, Aeroflot is eager to purchase as many foreign planes as possible to retire its outdated Soviet fleet and is looking to expand in Europe by acquisitions. Okulov has endorsed that Aeroflot had bid for Serbian flag carrier JAT Airways. Aeroflot is also in a bidding competition for Italy’s Alitalia together with bank Unicredit.
