Resale Provision
// Licensing company is first buyer for RRJ
Deals
Sukhoi Aviation Holding Co., Sukhoi Civilian Aircraft and the Finance Leasing Co. signed a purchase-sale agreement for ten Russian Regional Jet craft yesterday at the MAKS 2005 aviation salon. The delivery of the aircraft, which do not exist yet even in test models, is planned for 2008-2009. The value of the transaction is about $260 million. The Finance Leasing Co. became the first firm purchaser for Sukhoi civilian liners. Big buyers like Aeroflot and Siberian Air did not buy from Sukhoi.
Sukhoi Civilian Aircraft has been in the process of setting up Russian Regional Jet since 2000. The total cost for it, including development of the Russian-French SaM-146 engine, is almost $1.5 billion. Of that sum, excluding money for the development of the engine, Sukhoi spent around $70 million and about $100 million was a state-guaranteed credit written into the 2005 federal budget. A Russian Regional Jet assembly plant is to be set up in Komsomolsk-on-Amur in 2007-2008 to produce 75- and 90-passengeraircraft. This year, the working design and main configurations of the craft were finished. Russian Regional Jet is one of three aircraft-productions projects now underway in the former Soviet Union. The new planes should replace the outdated Yak-42, Tu-134 and partially the Tu-154. The other two are the Tu-334 from Tupolev and the Kazan Aviation Assembly Plant and the An-148 from the Ukrainian Antonov Aviation Complex, Ilyushin Finance Co. and Voronezh Aircraft Construction Co.
So far, Sukhoi has no firm orders for a Russian Regional Jet. A pre-contract agreement signed with Siberian Airlines last year at the Farnborough Airshow in Britain for 50 RRJ-95s never became a contract. “The question is being dragged out. Siberian is looking at different financing options,” said Sukhoi Civilian Aircraft general director Viktor Subbotin. According to information obtained by Kommersant, a Western finance company may buy the 50 planes and rent them to the carrier.
At Siberian, they told Kommersant that the pre-contract agreement has expired, but negotiations are continuing. Technical aspects of the delivery remain to be agreed on. Sukhoi Civilian Aircraft is holding similar negotiations with Aeroflot, but they are so far without result.
The week before MAKS started, Finance Leasing Co. general director Evgeny Zaritsky promised to sign a contract for the delivery of ten Russian Regional Jets. Sukhoi would not comment on Zaritsky's statement. Yesterday morning, there was no information available on whether or not that contract would be signed. But in the afternoon a signing ceremony was held with the heads of Sukhoi Aviation Holding Co., Sukhoi Civilian Aircraft and the Finance Leasing Co. taking part. They signed a purchase-sale agreement for the delivery of four RRJ-95s in 2008 and six in 2009. “This really is a firm contract. The Finance Leasing Co. has taken on the financing requirement, including a non-returnable advance, which confirms their seriousness,” Zaritsky told journalists. He added that the prepayment was more than 15 percent. The officially announced value of the deal coincides with the catalog price of the aircraft, $26 million each. That is, ten for $260 million. The discount made on the contract has not been made public. “There is one, and it's a good one,” is all the head of the Finance Leasing Co. would say.
The Finance Leasing Co. intends to lease the planes it bought to Russian airlines. “Several companies are negotiating with on those machines,” Zaritsky said, “including Transaero, Aeroflot [other Finance Leasing Co. sources say that it is the main company's Aeroflot-Don and Aeroflot-Nord subsidiaries] and numerous companies in Siberia and the Far East.” Transaero confirmed that those negotiations are taking place. A contract between Sukhoi and Aeroflot remains questionable. After a meeting between the heads of those companies at MAKS on Tuesday, there was talk that a contract for 30 planes may be signed this week. Subbotin did not rule out such a signing within two weeks. Aeroflot deputy general director Lev Koshlyakov told Kommersant that “final agreement on the conditions of the contract has not been reached.” Kommersant has information that the main question is cost. The airliner wants a more substantial cut than the $2 million off the catalog price that Sukhoi can give it.
Contracts signed at MAKS
Yesterday King Abdullah II of Jordan visited the MAKS Aviation Salon. His military department signed a contract for the delivery of two new Il-76MF military transport planes to Jordan for about $50 million each. Abdullah II also expressed his intention to obtain five Su-31 light sports planes for his country and several Ka-52 strike helicopters.
Kamov Holding and Rolls Royce made a contract for the delivery of 50 RR 250-C20R engines. The value of that deal is more than $15 million. Ka-226 helicopters will have two such engines in each one. The first two machines will be ready in early 2006 for the Ministry of Emergency Situations. The remainder will be purchased by the Moscow city administration, law enforcement, regions and individuals.
Airbus and Irkut signed an agreement on Russian participation in the development and production of a new European A-350 long-distance liner. Irkut will produce load-bearing elements for the wings, pylon, floor and chassis. Airbus says the agreement with Irkut will raise its annual turnover on good and service with Russian companies from $80 million to $110 million per year by 2007.
UTair has become a partner of the Moscow city administration as part of the city Moscow Air Taxi program. UTair general director Andrey Martirosov said that the carrier has agreed to be the operator of the helicopter equipment. The program will run from 2006 until 2010 and involves the purchase of category A light aircraft, the furnishing a helipads and passenger transport within the region and up to 600 km. outside it. The planned volume of investment is 10 billion rubles. That money will go, in part, for the purchase of 25 airplanes and 37 helicopters.
AiRUnion and Sakhalin Airways signed a memorandum of intent on a strategic partnership. Sakhalin Airways is the sixth airline to join the union. Since 2005, Krasair, Domodedovskoe Airlines, Samara, Omskavia and Sibaviatrans have been members.
by
Sergey Ryzhkin
All the Article in Russian as of Aug. 18, 2005
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