UTair Plans to Lease 20 Boeing 737s

UTair, the country's fifth-largest airline, will lease 20 Boeing 737-500 planes by the end of 2009 to replace aging aircraft and boost capacity to meet the country's growing travel demand.

UTair will lease half the planes in 2008 and half next year, all from Continental Airlines, the carrier said Friday in a statement on its web site. UTair, based in Surgut, in the Khanty-Mansiisk autonomous district, mostly operates Tupolev aircraft for passenger flights and flew its first Boeing on Thursday.

Russian airlines, led by Aeroflot, are leasing more foreign-made aircraft as the domestic economy grows for a 10th consecutive year, boosting incomes and demand for goods and services. The country's 160 airlines carried 18 percent more passengers last year, or 45 million travelers, according to the Transportation Ministry.

"We want to replace Tu-134s on the routes where traffic is growing," UTair spokesman Yury Mushikhin said in a telephone interview. "We expect to carry 4 million passengers this year," compared with 2.9 million last year, he said.

The country's airlines operated more than 150 planes from Chicago-based Boeing as of December and 67 aircraft made by France's Airbus, according to reports from the country's carriers. UTair agreed to lease its 737s from Houston-based Continental, the fourth-largest U.S. carrier, Mushikhin said.

UTair has the biggest helicopter fleet in Russia and plans to spend $200 million on 40 Mi-171 helicopters, from the Ulan-Ude Aviation Plant in Siberia, by 2010.

UTair increased net profit under international financial reporting standards 2.3 percent last year, compared with 2006, to 270 million rubles, Andrei Ilmensky, the airline's first deputy general director, said at a news conference last week, Interfax reported.