Story ID: VKrussiaorders06102022
Aeroflot To Order 300 Russian-made Airliners
By: Vladimir Karnozov
Caption: MC-21 and SSJ100 programs will get a major boost from an impending order from Russia’s flag carrier. 
Word Count: 570
Aeroflot plans to sign a framework agreement with United Aircraft Corporation (UAC) covering the sale of 300 aircraft, a source in the Russian flag carrier told journalists on the condition of anonymity, adding that the parties have scheduled a ceremony during the International Economic Forum in St. Petersburg from June 15 to 18 to mark the deal. Most of the newly ordered aircraft will belong to the Irkut MC-21 narrowbody and Sukhoi SSJ100 regional jetliner families.

Aeroflot will also take a small number of the Tupolev Tu-214 narrowbodies while ignoring the Ilyushin Il-96 quad and Il-114 turboprop. The value of the deal would total some $15 billion to $16 billion after all discounts.

Neither Aeroflot nor UAC would comment officially on the reported deal, which comes at a time when the Russian industry is urgently seeking alternatives to Western aircraft and parts. Yet, Rostec corporation, which controls UAC, hinted that the imminent deal with comments that the corporation indeed “plans to sign a few agreements with airlines” this summer. According to Rostec general director Sergey Chemezov, its organization plans to deliver 110 civil airplanes by 2025 and 500 by 2030. Most would go to Aeroflot Group, which, apart from the core company headquartered in Moscow, includes Rossiya in St. Petersburg and Podeda, the low-cost carrier operating out of Vnukovo airport in Moscow.

The group is already the largest operator of Russian-made jetliners. Aeroflot operates nine SSJ100s and Rossiya flies 70. The group decided to make Rossiya solely responsible for the type last year; the core company has yet to complete the transfer of its aircraft to the subsidiary. Meanwhile, Rossiya remains committed to becoming the first operator of the MC-21 even though the manufacturer has postponed first shipments until late 2023 or early 2024.

U.S. sanctions against Russia have rendered the Pratt & Whitney PW1400G-powered MC-21-300 unavailable, meaning UAC will deliver only MC-21-310s featuring locally made PD-14 engines and avionics. UAC says it holds enough stock of imported parts to assemble 20 new SSJ100s before production switches to the SSJ100-NEW, featuring indigenous PD-8 turbofan and avionics. The circumstances have forced Aeroflot Group and UAC to renegotiate earlier agreements, including two deals signed in 2018.

At the time, the flag carrier placed a firm order for 100 SSJ100s to supplement an earlier contract for 50, including a rider that called for the manufacturer to take back some of the earlier delivered aircraft. The second 2018 deal saw Aeroflot place a firm order for 50 MC-21s due for delivery between 2021 and 2026, along with an option for 35 more. In fact, the group wanted still more, and took extra MC-21s on operational lease terms from VEB-Leasing, Sberbank Leasing, Ilyushin Finance, GTLK, and other local lessors. Aeroflot’s intake accounts for the majority of the UAC-claimed order book of 175 MC-21s.

Today, Aeroflot cannot secure manufacturer support for its Airbuses and Boeings because of U.S. and EU sanctions effective since March this year. This past April, EASA blacklisted Aeroflot and 20 other Russian carriers on safety grounds. Separately, more than 60 percent of the Aeroflot fleet stands subject to legal action by Western lessors that want their aircraft back. In a countermove, the Russian government ordered local carriers to keep their Airbus and Boeing aircraft in the country. Because of the risk of repossession, the airplanes effectively cannot fly international services, leaving Russian-made aircraft the only option for Aeroflot.