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. Last Updated: 07/27/2016

Boeing Deal Angers Aircraft Makers

COMBINED REPORTS


The Russian airline Aeroflot's intention to buy 10 Boeing 737-400 passenger jets has angered domestic aircraft makers, who went to top levels of the government Wednesday seeking to scuttle any deal.


Tatarstan leader Mintimer Shaimiyev, whose republic is home to one of the largest Russian aircraft makers, argued against buying Boeings at a meeting Wednesday with Alexander Lebed, President Boris Yeltsin's powerful security chief.


"Now we still can make aircraft, but if we continue to buy them abroad without thinking about development of our own aircraft industry, we soon will lose that ability," Shaimiyev told Russian Television.


He said Lebed reacted with "understanding." There was no immediate word from Lebed's office.


Aeroflot's plan to buy the Boeing planes in 1997 and 1998 at a reported cost of $25 million to $30 million each has produced indignation at the Kazan Aircraft Making Plant in Tatarstan, where workers haven't been paid for eight months because of a lack of orders.


The plant recently developed the Tupolev 214 airliner, but Aeroflot has said it is still unfit for regular service. The airline considers Western planes in general to be more efficient and reliable than Russian aircraft.


Aeroflot, which will use the jets on domestic and foreign routes, joined Air Ukraine and Russia's Transaero in recently announcing or concluding deals for Western planes.


"Aeroflot has to do something to protect its image," said United City Bank aircraft industry analyst Patricia Isayeva. "They need any good planes that don't crash," she said, adding that competition with Russian rival Transaero had become fierce.


She said Western engines were the strongest medicine Aeroflot could afford against crashes.


But Perm Motor, which supplies the Tupolev 204 with engines, said the Russian aircraft was a competitor to the Boeings that Aeroflot purchased. Its engines perform to specification and can compete with Western models, chief engineer Ivan Bashkatov said.


"The biggest problem is not that Russian engines are worse but that the Russian companies are not in good enough financial condition to buy Russian planes," Bashkatov said by telephone.


Yevgeny Shaposhnikov, the director of Aeroflot Russian International Airlines, the largest successor of Soviet-era Aeroflot, confirmed Wednesday the company's intention to buy the Boeing 737-400s and said Russian aircraft producers simply fail to understand that the airline must operate in a competitive market.


"They forget that we live in a free-market economy, not in the Soviet Union, when the airline didn't have to pay for fuel from its own pocket and everything Soviet-made was called the best in the world," Shaposhnikov said.


He said Aeroflot needs the Boeings to replace its aging fleet of Soviet-made Tupolev 134 airliners, which no longer meet European noise and exhaust standards.


"Our aircraft producers mustn't feel discouraged by the deal, but rather assess it as a stimulus to improve their products," Shaposhnikov said.


As part of its fleet of 120 aircraft, Aeroflot now operates 10 Airbus A-310s and two Boeing 767-300ERs, all on lease.


A string of crashes of Russian-made planes also has made the public wary about safety. Last month, a Tupolev 154 belonging to Russia's second-largest carrier, Vnukovo Airlines, crashed into a snowy mountain on Norway's arctic islands, killing all 141 people on board.


It was the fourth deadly crash since 1993 of this type of aircraft, which is the workhorse of Russia's air fleet, carrying about half of Russia's air passengers.


A 1995 preliminary agreement between Aeroflot and Ilyushin to equip 20 planes with U.S. engines may serve as a model for Russian plane makers eager for sales. ()








Isayeva said Russian aircraft makers should begin making contact with foreign engine manufacturers, as in the Ilyushin deal, where testing is already under way.


"A company buying Russian planes with Western engines -- it is not that bad."