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. Last Updated: 07/27/2016

Boeing's Ambassador Sees Supersonic Future

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Thomas Pickering was appointed Boeing's senior vice president for international relations four months ago, a position created specially for him. Pickering has a great deal of experience in international relations. The last position he held was as first deputy to the U.S. secretary of state. Prior to this, he was America's representative to the United Nations and U.S. ambassador to India, Israel, Nigeria and Russia. Now the ambassador — a life-long title — represents the interests of one of the largest U.S. corporations on the world market.

Russia is high on the list of the company's priorities. According to Pickering, over the past 10 years, Boeing has invested about $1 billion in various projects in Russia.

Now Boeing is considering the possibility of working together with Russia to create two new aircraft: a small, supersonic, business-class, eight- to 10-seater and a regional aircraft with a 2,000 to 3,000 kilometer range to seat between 55 and 85 passengers.

Boeing is the largest company in the international aerospace sector. Boeing comes 94th in the Financial Times' list of the 500 biggest companies in the world with market capitalization of $53.3 billion. Along with aircraft, the company produces propeller equipment, radio electric broadcasting, rockets, rocket engines, rocket carriers as well as information and communication systems.

The company is active throughout the world. It works with customers in 145 countries and its production facilities are located in the United States, Canada and Australia.

Q: This April, when the chairman of Boeing's board of directors, Phil Condide, was visiting, a cooperation agreement was signed between Boeing and the Russian Aviation and Space Agency. This agreement dealt with existing space projects as well as plans for the aviation sphere. These plans were described in an outlined form, but Deputy Prime Minister Ilya Klebanov announced that concrete plans would be released in May. In particular, Klebanov said the schedule for joint work in creating two types of aircraft — a regional plane and a business-class aircraft — would be determined. How is work in this area progressing?
A: Our work together is progressing very successfully. Both projects for the creation of new craft are being developed on the level of a feasibility study and a business plan. Our main task at the preparatory level is to take the requirements of potential clients into consideration to the maximum in order that our product can compete on this promising market. Demand for this kind of aircraft is very high in Russia, the CIS and throughout the world. Currently, the Brazilian Embraer and Canadian Bombardier companies lead the market.
In addition to these projects, we also discussed with the heads of the aviation sector the important question of how cross-polar routes would be developed — there are four such routes already developed. Boeing has attracted three leading U.S. airlines to use the routes regularly: United, Continental and Northwest. Delta Air Lines, American Airlines and Malaysian Airlines are waiting in line.
The air companies pay Russia aeronavigational fees for each flight using the cross-polar route. Market growth assessments conducted by Russia's State Civil Aviation Service and Boeing show that over the coming 10 years, Russia could receive several hundred million dollars. The airlines are interested in developing these routes — which shorten the flight-time from the United States to Asia by several hours.
Therefore, if Russia increases its capacity, companies may seek to invest in airports en route, such as at Krasnoyarsk [in western Siberia].
There is another aspect — the future development of Boeing's design center in Moscow. This year the number of engineers working there will be doubled to 300 individuals. Similarly, we're proud of Boeing's plans for joint work with leading Russian scientific organizations and companies working in the area of information technology.

Q: What will the regional aircraft design be based upon? Where will it be designed and produced?
A: This will be an entirely new project — it has no existing prototype. It will be designed in Russia with methodological support from Boeing. We're working with all design bureaus, but particularly with the S.V. Ilyushin aviation complex and the Sukhoi civil aviation company. I am sure that Boeing's joint operations with Russian designers, who are highly respected throughout the world, are in a position to cause a revolution.
We're taking pains to ensure that our joint product will be profitable to its creators as well as economical for its clients to buy.

Q: How much investment is required for the project to be implemented and who will finance it?
A: It's impossible at this stage to assess the volume of investment as well as the future cost of the aircraft. After preparation of the TEO [feasibility study] is completed, we'll receive an assessment of the market potential. If it's sufficiently large, I believe that financing could be of an international nature.

Q: In Russia and the CIS countries, about 50 Boeing aircraft are now in use. Is it true that Boeing plans to build a servicing center at one of the Moscow region airports to cater to these craft?
A: It's true that we are studying the possibilities for creating a service center. We've met with virtually everyone who could build this kind of center at its airport. No decision regarding this question has been made yet.

Q: The Russian government has declared the aviation industry to be a priority area. Sales of domestic aircraft are planned to go forward with the help of leasing companies, and the first tender is planned for June. Aren't you afraid that this program will lead to Russian airlines losing interest in Boeing aircraft?
A: Our modern aircraft adhere to the strictest criteria. Demand for them can only improve — if the airline wants to replace its old Boeing models with more modern airplanes. Futures transactions are showing good results — this year the company is planning to sell 450 to 500 aircraft throughout the world.
As far as the state's leasing support program is concerned, then this is a very good program, and we're analyzing it carefully. But we propose that the coming 10 years will see the formation of a serious, rigorously developing market. Boeing already offers aircraft that adhere to the most modern requirements and fully satisfy the requirements of the most demanding clients. We will try to make sure that our aircraft make good financial sense for clients. We have been working with the Russian aviation and space industry for 10 years. We work as partners; we've invested about $1 billion in various Russian projects over this time. The pool of Russian aircraft must be renewed and Boeing plans to be very seriously involved in this process.