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. Last Updated: 07/27/2016

Boeing Wins $3Bln Aeroflot Order

Itar-TassPutin and First Deputy Prime Minister Sergei Ivanov showing CIS leaders a model of the Superjet-100 on Sunday.
ST. PETERSBURG -- Boeing won an order valued at about $3 billion from Aeroflot for 22 Dreamliners in a possible sign of better relations between the United States and Russia.

Boeing and Aeroflot signed a contract Saturday at the St. Petersburg International Economic Forum, which brought together more than 200 companies. The first of the 787 Dreamliners will be delivered to Aeroflot in 2014, CEO Valery Okulov said after the ceremony.

The Boeing sale was delayed as relations between the United States and Russia worsened after U.S. officials accused President Vladimir Putin of impeding democracy. Airbus won a pledge in March from Aeroflot to buy 22 A350s valued at $4.4 billion after competing with Boeing for more than a year.

"For Boeing, it's hardly a prestigious number, [and] it's hardly a big order, but Airbus needed those numbers," said aviation analyst Richard Aboulafia, of Teal Group in Fairfax, Virginia. "So to deprive Airbus from being the customer is far more important to Airbus than Boeing."

Aeroflot expects to sign a contract for the Airbus jets at an air show in June in Paris or in August in Moscow. "They complement each other well," Okulov said of the U.S. and European aircraft, adding that delivery of the A350s would begin at the end of 2014 and stretch to 2017.

Aeroflot will seek guarantees from the U.S. Export-Import Bank for a syndicated loan to finance the Boeing deal. Aeroflot declined to provide details. Okulov said Aeroflot, which is already seeking $1 billion to buy a stake in Alitalia, could afford to borrow more because it has no debt at present.

Separately, Boeing signed an agreement with Unified Aircraft Corporation to study cooperation in research, design and development of commercial planes.

Boeing also agreed to boost cooperation with Sukhoi's commercial airplane unit. Boeing has consulted Sukhoi Civil Aircraft on its Superjet-100 family of midrange passenger jets. Boeing will help Sukhoi in post-sale support, it said Saturday.

Aeroflot is the second Russian customer for the Dreamliner. S7 Airlines, the country's second-largest carrier, agreed last month to buy 15 of the aircraft with options for another 10.

Since the early 1990s, the country's airline industry has only produced 36 airliners, and carriers have imported more than 120 foreign-produced planes to replace aging Russian-made aircraft.

The delay in ordering the Boeing planes could result in hundreds of millions of dollars in lost revenue for Aeroflot, as the company needs a modern fleet sooner than 2014 to stay competitive and expand, said billionaire Alexander Lebedev, who owns 30 percent of Aeroflot through his National Reserve Corporation.

Lebedev last year signed an agreement with Boeing to reserve the production slots on the 787 for Aeroflot, while awaiting the government's decision. The agreement, signed by Lebedev's company on behalf of Aeroflot, expired as the government failed to approve it, and Aeroflot lost the slots.

Economic Development and Trade Minister German Gref, asked to comment on the delay, told reporters Sunday that with Aeroflot buying both Boeing 787s and A350s, he hopes it will not lose any revenue.