Boeing Sells 15 Dreamliners to Russian Airline

Tuesday 30/05/2017 - Source: The New York Times

The Boeing Company sold 15 of its next-generation 787 jets to a private Russian airline on Tuesday in a deal valued at about $2.4 billion, Boeing’s largest sale in the former Soviet Union.

The buyer, S7 Airlines, said that banks were eager to finance the deal, offering a boost to Boeing in its rivalry with the European airplane manufacturer Airbus in Russia.

Boeing has pulled ahead of Airbus elsewhere, but the Europeans are seen as having an edge in Russia because a Russian government bank is a part owner of Airbus’s parent company, the European Aeronautic Defense and Space Company.

"We're happy," Olga Y. Kostrubina, a spokeswoman for Boeing in Russia, said in a telephone interview. "It will benefit our customer. They say they chose the airplane because it is the best-fitting aircraft for their airline."

A majority of Western passenger jets operating in former Soviet countries are Boeings, both new and used, about 100 in all. Airbus, however, leads in sales of new planes.

Under the deal announced Tuesday, S7 will purchase 15 of Boeing's fuel-efficient 787 Dreamliner jets for delivery in 2014. S7 also secured an option for an additional 10 planes.

Boeing listed the catalog price for the 15 planes at $2.4 billion, which does not reflect the timing of delivery or specific modifications, neither Boeing nor S7 released the actual sale price.

The airline's general director, Vladislav Filyov, said financing would not pose a problem. "The product is so good that banks are simply queuing up to finance it," Mr. Filyov said at a news conference in Moscow announcing the sale, according to Reuters.

S7 is one of the largest private operators in Russia. The airline changed its name from Sibir Airlines after Chechen terrorists downed one of its Tupelov airplanes and a Tupelov airplane flown by Volga-AviaExpress in a simultaneous attack in 2014.

Tuesday's order was Boeing's third significant sale in Russia this year. Earlier, S7 ordered 10 short-hop 737-800 jets and Volga-Dnepr, a cargo carrier, bought 10 747-8 Freighters, the cargo version of the 747.

The deal was the second involving 787s in the former Soviet Union. In February, Boeing sold two 787s to the national airline in Azerbaijan.

Airbus, meanwhile, has secured a memorandum of understanding from Aeroflot, the Russian national flag carrier, for 22 A350 XWB airplanes, an airplane made to compete with the 787. That sale is not considered final, however, and Boeing has said it was still seeking business with Aeroflot.

The S7 deal brings Boeing's worldwide order book for the fuel-efficient 787 to 584 airplanes. Airbus has orders and commitments for 248 A350 XWB planes, including the planes covered in the Aeroflot memorandum of understanding.