Russia's Aeroflot leasing an additional 20 Superjets from UAC

Russia's Aeroflot leasing an additional 20 Superjets from UAC
Aeroflot's Superjet SSJ-100 / Photo by Aeroflot
By bne IntelliNews July 20, 2017

Aeroflot will lease an additional 20 Russian-made and designed Superjet SSJ-100 jetliners in addition to the 30 it already has, the state-owned United Aircraft Corporation manufacturer said in a statement.

A contract for the supply of Superjets under leasing terms was signed by the chairman of Vnesheconombank Sergei Gorkov, Aeroflot’s general director Vitaly Savelyev and the head of UAC Yury Slusar during the MAKS air show in the presence of Russian President Vladimir Putin, Vedomosti reported.

The deal is being financed by VEB-Leasing, a subsidiary of the troubled state-owned VEB development bank, which will acquire the planes from UAC and then transfer them under a leasing agreement to Aeroflot. The deal is worth a reported $702mn, VEB said.

The deal was done only a week after Putin announced that the government will grant RUB60bn ($1bn) to the further development of Russia’s civil aviation sector.

“Last year only, almost RUB52bn were spent within the development programme for the aviation industry, and RUB60bn is planned [to be allocated] this year,” TASS quoted the president as saying.

According to Putin, the supportive measures are bringing results. The production index for civil aviation totalled 121% last year compared with 2015, he said, adding that the industry still has “technological potential and workforce capacity for further growth and rise on the local and global markets”.

Putin also chided the large state-owned oil and gas companies during the MAKS airshow, telling them to “buy Russian” when purchasing planes and helicopters. All the country’s big firms maintain a fleet of aircraft to get to their far–flung assets. State-owned oil major Rosneft alone is expected to spend RUB10.6bn ($175mn) on aviation services in the next five years. 

UAC was set up several years ago to bring together the state-owned aviation assets and the SuperJet is the flagship project, designed to break the monopoly held by US Boeing and Europe’s Airbus on the medium-range plane business. The project was marred when a test flight in Indonesia flew into a mountain in 2012 killing all 45 people on board.

The plane is technologically advanced, as the company told bne IntelliNews in an exclusive interview, and has had some issues with emissions and faults. Earlier this year all SuperJets were grounded while a technical flaw was fixed, but the aircraft has now been approved by international regulators to fly international routes.

Sales have been lacklustre, with most of the aircraft going to countries in the Commonwealth of Independent States (CIS), and although some deals have been signed the company remains well below its sales target. In April, Iran agreed to buy 12 of the planes. The company landed its first big European deal in June 2016 when it sold 15 jets to Ireland’s City Jet. Air France immediately said it would lease some planes from City Jet to take a look at them. SuperJet’s main appeal is that is technically equivalent to its competitors (and even a little better on fuel efficiency) but a lot cheaper.

Aeroflot said the aircraft will be delivered in a conventional two-class layout with 12 seats in business class and 75 in economy class.

Each aircraft is transferred to the airline for 12 years from the date of the contract. VEB-Leasing will supply the first aircraft in the summer of 2017, and before the end of the year Aeroflot will receive a total of 12 planes, with another eight being delivered in 2018. The new aircraft will serve domestic flights and routes to Europe and the CIS.

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