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. Last Updated: 07/27/2016

Aeroflot Seen Reviving Boeing Deal

Itar-TassAn Aeroflot Boeing 767 at Sheremetyevo Airport. Talks have been stalled on Aeroflot buying 787s since last year.
National flag-carrier Aeroflot could agree to buy 22 Boeing Dreamliner jets at the St. Petersburg International Economic Forum on Saturday, Kommersant reported sources close to the deal as saying.

Estimated to be worth $2.1 billion, the deal would mark a dramatic turnaround from state-run Aeroflot's snub of Boeing planes last year, a development that that has been linked to growing rifts in U.S.-Russian relations.

Aeroflot will sign the contract for the long-range Boeing 787s in exchange for greater Boeing assistance in developing Sukhoi's midrange Superjet 100 model, a source familiar with the preparations for the deal said, Kommersant reported Thursday.

Aeroflot general director Valery Okulov and Boeing's vice president Scott Carson, who is CEO for the commercial airplanes division, could sign the deal in the presence of First Deputy Prime Minister Sergei Ivanov, the report said.

With a Boeing deal in sight, Aeroflot also intends to buy another 22 planes from Airbus, which it announced in March, an Aeroflot source said Thursday.

"We have been saying for a long time that we can exploit both models," the source said, Reuters reported.

Aeroflot offered no comment Thursday and a Boeing spokeswoman declined to discuss the matter. Boeing's Russia chief, Sergei Kravchenko, was in the United States and could not be immediately reached for comment Thursday.

Boeing said last week that it was still in talks with Aeroflot about the deal. Boeing, however, is offering different terms now, said Marlin Dailey, Boeing's vice president of commercial sales for Europe, Russia and Central Asia. He made the statement as he announced a deal to deliver 15 Dreamliners to another Russian airline, S7, from 2014.

Boeing has said the delivery schedules of its Dreamliners are fully booked until 2014. Aeroflot last year had an option to take delivery of the planes from 2010 to 2013.

Aeroflot's largest private shareholder, Alexander Lebedev's National Reserve Corporation, which owns a blocking 30 percent interest in the airline, is in favor of the Boeing purchase.

"Aeroflot needs both Boeings 787s and Airbuses," said Leonid Dushatin, an Aeroflot board member representing the corporation. "We would only like the conditions to be not worse than what was agreed in September."

Aeroflot would have to fork out about $2.1 billion for the 22 Dreamliners, said Andrei Nikitin, an analyst at UralSib. S7 said it would pay $2.4 billion for 25 jets.

As part of the Aeroflot deal, Russia wants Boeing to expand its assistance in launching the Sukhoi Superjet 100 midrange plane, Kommersant said. As well as consulting Sukhoi on the design, marketing and production, Russia wants Boeing to create personnel training and servicing centers, the report said.

The reversal of Aeroflot's position toward Boeing follows Moscow's failure to gain a bigger involvement in EADS, the parent company of Airbus. State-controlled bank VTB has a 5 percent stake in EADS, where top shareholders are France and Germany.

The change of mind at Aeroflot runs counter to speculation that its rejection of the initial offer by Chicago-based Boeing stemmed from the chill in U.S.-Russian ties.