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. Last Updated: 07/27/2016

Egypt's Sirocco Wants 25% of Tupolev

Sirocco Aerospace InternationalAn Air Cairo Tupolev Tu-204-120, one of the airline's fleet of four, takes to the sky.
CAIRO, Egypt -- Egypt's Sirocco Aerospace International said Tuesday it expects to get a 25 percent minus one share in Moscow-based aviation company Tupolev and a 25 percent plus one share in Tupolev's Aviastar-SP production facility in exchange for a record $280 million investment agreement expected to be finalized this month.

Sirocco chairman Ibrahim Ahmed Kamel told reporters that Sirocco sees itself as a strategic investor in Russia's aviation industry and owning stakes in the Tupolev group would give it more credibility when pitching Tupolev's Tu-204 jet to potential buyers abroad.

Sirocco, set up in 1996 by Egyptian company Kato Aromatic, has the exclusive rights to market internationally the passenger and cargo versions of the Tu-204-120 with Rolls-Royce engines and Honeywell avionics. The company has already invested some $170 million in its partnership with Tupolev and the Ulyanovsk-based Aviastar-SP.

Kamel said the Property Ministry has committed to giving Sirocco the stake in Aviastar-SP, but the Tupolev stake is still being negotiated. He declined to elaborate.

The Property Ministry, which manages the state's 50 percent plus one share in Tupolev, which in turn owns 74 percent of Aviastar, could not be reached for comment.

Sirocco's Aviastar investment is the largest ever in the aviation industry by a foreign firm, said Paul Duffy, a Moscow-based independent aviation analyst.

Duffy said Sirocco's involvement gives the troubled industry a much-needed boost -- especially in light of new European Union noise restrictions that will effectively ban 70 percent of all Russian aircraft beginning April 1. The Tu-204 is one of the few Russian airplanes that complies with Europe's new noise regulations, although only six units are currently in use.

The Tu-204-120 can seat up to 196 passengers and sells for $38 million, compared to the $59 million for the analogous Boeing 757. A mid-range narrow-body craft, it has a range of 2,500 kilometers to 3,600 kilometers.

Air Cairo began operating the Tu-204-120 in 1998 and, pleased with its performance, now has a fleet of four.

Last September, China ordered five of the cargo version, the Tu-204-120C, from Sirocco, with the first unit expected to be delivered in June 2003.

And on Tuesday, Sirocco delivered the first of two Tu-204-120Cs to global express mail service TNT in Liege, Belgium. "This marks the beginning of Tu-204-120's operation in Europe," Kamel said, adding that TNT has expressed interest in replacing its Boeing 727 fleet with Tu-204s if it is satisfied.

Including the TNT plane, Sirocco expects to deliver just three units this year but expects to produce five units in 2003, eight in 2004 and two to three per month in 2005.

"At this stage we have a very, very good basis for a success story," Kamel said. In the next 10 to 15 years, he said, demand in Russia for planes in the Tu-204-120 class would be more than 300 units, and a similar number internationally. The company expects to get European certification in April 2003, which would open the door for worldwide sales.

Aviastar spokesman Sergei Mochalov said by telephone from Ulyanovsk that Sirocco's commitment to the plant was warmly welcomed.