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Sunday July 6, 2008
Reuters
Aeroflot Shareholder Signs Deal With Boeing

The main private shareholder of Russian airline Aeroflot has signed an agreement to buy 22 Boeing 787s even though the airline itself has made no decision to buy them, a newspaper reported on Tuesday.

Kommersant daily reported that the National Reserve Corporation (NRC), which owns a 30 percent stake in Aeroflot, signed the deal as a way of keeping Aeroflot's options open in case the airline's full board decides to buy Boeing jets.

Boeing is competing with its European rival Airbus for the USD$3 billion deal to supply the long-haul jets to Aeroflot.

No one at NRC was immediately available to comment on the Kommersant report. At Aeroflot, spokesman Viktor Sokolov said: "We do not have such information."

Kommersant said NRC stepped in because the original terms under which Boeing offered to sell the aircraft to Aeroflot were to expire last Friday if no preliminary order was placed.

A source close to NRC told Kommersant the company has already signed a preliminary agreement with Boeing.

"This document outlines the same delivery conditions that had been offered to Aeroflot -- first deliveries starting in 2010 with USD$10 million discount for every plane," Kommersant quoted the source as saying.

Boeing's new 787 Dreamliner has a firm order book of 377 planes and production set to come on stream in 2008. Aeroflot has also been considering Airbus's rival A350 plane.

Russian media have speculated that the final decision is uncertain because the Russian state is itself uncertain as to what kind of planes to choose.

While business logic argued for Boeing, politics complicate the decision as Russia conducts delicate bilateral talks with the United States that could pave the way for it to join the World Trade Organization.

Meanwhile a Russian state bank has just bought a 5 percent stake in Airbus owner EADS with the Kremlin eager for a strategic holding and a say in running the European aerospace group.

(Reuters)

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