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. Last Updated: 07/27/2016

An-124 Production to Resume

Volga-Dnepr Group, the cargo carrier whose clients range from NATO to rock stars, said it would revive production of the world's biggest commercial aircraft to tap surging demand for oversized shipments.

Volga-Dnepr and Ukrainian engine maker Motor Sich agreed to form a joint venture to renew production of the Antonov An-124, officials from both companies said Monday. Volga-Dnepr will control 59 percent, while Cargo Aircraft and Motor Sich will own the rest.

"There's huge demand in the large-cargo market but not enough capacity," said Gennady Pivovarov, head of Volga-Dnepr's airline. Demand in dollar terms is expected jump tenfold to $4.5 billion per year by 2020.

Volga-Dnepr is the global leader in oversized cargo, with more than 50 percent of the market. The United Nations uses the big-bellied An-124 for peacekeeping missions and musicians including Madonna, Michael Jackson and the band U2 use the craft for world tours.

Designed as a strategic military freighter, the plane first flew in 1982 and set a world record in 1985 by carrying a payload of 171,219 kilograms to an altitude of 10,750 meters. Once the pride of the Soviet aircraft industry, 56 of the jets were made before production stopped after the Soviet Union collapsed in 1991.

Restarting production will require about $500 million, $100 million of which will come from the venture partners and the rest will be raised either from the Ukrainian and Russian governments or private investors or both, both firms said.