Italians Want “Civil Aircrafts of Sukhoy”
// Alenia Aeronautica is trying to become a co-owner of Russian company
Last Friday it became known that Alenia Aeronautica (part of the Italian Holding Company Finmeccanica) is considering buying stocks of Civil Aircrafts of Sukhoy (CAS), the affiliate of the famous Russian military jet maker. Currently CAS is working on a project of Russian Regional Jet (RRJ) for civil aviation. The representatives of CAS confirm the fact of negotiations with Italians. A source close to the company told Kommersant that Alenia wants to buy at least 10 percent of shares.
CAS was founded in 2000. The state-owned AHK Sukhoy controls 95.85 percent of the company shares. Currently, CAS is busy over the project to create a family of regional line passenger jets, which is supported by the state. This one of the three projects of building an airliner that are supposed to replace old mid-range passenger jet Tu-134 on the territory of the former USSR. The total cost of the project, including development and production of Russian-French engine SaM146 is supposed to be $1.5 billion. RRJ plans to have the first flight sometime in 2006-2007.
Alenia Aeronautica, an affiliate of Finmeccanica SpA, the biggest European aviation defense group (total sales in 2004 $10.269 billion) is designing and producing military and civilian aircrafts, including regional turboprops ATR42 and ATR72. Last Friday, AFP with a quote from a source familiar with the situation said that Alenia Aeronautica is considering to buy portfolio of CAS stocks. According to Reuters, the Italian company hopes to participate in the RRJ project and hopes to continue negotiations about that in international aerospace show MAKS-2005, which will be held in Zhukovsky Aug. 16-21. The Italian company said that it will announce its further plans during the press conference in the show.
The representatives of Sukhoy confirmed officially only the fact of negotiations with Alenia Aeronautica. “The negotiations with Alenia Aeronautica have been going since the first of the year. The sides discuss possible participation of the company in the RRJ project,” Olga Kayukova, press secretary of CAS, told Kommersant yesterday. However, the source close to Sukhoy company gave Kommersant information that the participation of Italians in the company’s management is in the scope of the negotiations. “Alenia Aeronautica can buy at least 10 percent of the stocks. They (Italians – Kommersant) with their experience in production of ATR planes could participate in the organization of after-sales service for the RRJ,” the source revealed to Kommersant. Alenia Aeronautica did not comment.
Let’s note that until this time none of the foreign companies that supply parts to RRJ (Thales, Liebherr Aerospace, B/E Aerospace and Honeywell) did not show any interest to the CAS stocks. Only the Indian aircraft building company Hindustan Aeronautic Ltd. (HAL) became engaged in negotiations about a year ago with apparently no result as of yet. To appraise the value of CAS is pretty difficult. Right now, CAS only develops the aircraft and has nothing except expenses.
Let’s note that the world market value for the regional airliners up to 2023 is appraised in the amount that exceeds $100 billion. CAC plans to capture 15 percent of this market and to sell 755 RRJ airliners for a total of $18 billion. Let’s remind that 23 percent of the aircraft building company NPK Irkut, which was introduced as an IPO to the stock market in 2004 is appraised at $127 million. The portfolio of orders for the corporation up to the year 2017 is appraised at approximately $4 billion. CAS does not have confirmed orders as yet. However, it has a sales forecast four times higher because 10 percent of its stock is appraised at approximately $150-200 million.
Kommersant’s source thinks that some definite outcome in relationship between CAS and Alenia Aeronautica might happen before the end of this year. Let’s remind that the European concern EADS (co-owner of Airbus) a year ago told the Russian government about its intention to purchase NPK Irkut’s shares. However, the Europeans still did not purchase 10 percent of the stock as they announced.
Sergei Ryzhkin, Alexandra Simonenko
All the Article in Russian as of Aug. 08, 2005
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