Plane deficit kicks in

Even before Wednesday’s tragic plane crash which killed 43 people, including most of a top Russian hockey team, commercial airline manufacturers were already projecting big orders of new aircraft from Russia in the coming years.

The need to replace Russia’s aging f leet of Soviet-made aircraft has long been evident, but Wednesday’s crash, which sealed Russia’s title as the most dangerous place to travel by plane in 2011, turns it into a pressing need.

A total of 121 people have been killed in seven crashes this year, a figure which has led the government to mothball all Tu-134s, An-24s and Yak-40s by the end of the year. Following Wednesday’s disaster, the same fate probably also awaits the Yak-42.

As more and more Russianmade planes are transferred to the scrapheap, the country is set to see a vast surge of foreign-made planes, partly spurred by a drop in import duties for increasedcapacity aircraft.

U.S. aircraft manufacturer Boeing estimated in August that Russian and CIS countries would take delivery of more than 1,080 new aircraft over the next 20 years, with 32 percent of this figure already in backlog orders for the next five years. The company estimated the local market value at a whopping $110 billion.

Boeing says that as Russia constitutes 70 percent of CIS GDP, it will be the main driver of the increased demand.

Analysts say that while Boeing’s forecasts have a reputation for being overoptimistic, the latest estimate for Russia seems about right.

© RIA Novosti. / Ruslan Krivobok

Russia’s flagship airline Aeroflot signed a deal at MAKS to buy 50 new Russian-made MS-21 airliners


Major Russian airliner Transaero announced earlier this week that it has taken delivery of its fourth Boeing 737-800 NG aircraft, upgrading its 70-plane strong fleet, which already includes 67 Boeing aircraft.

As well as the mothballing of old machines, demand for new commercial planes is also being driven by an increase in the number of people taking flights.

“Demand for new airplanes will be fueled by an increase in the number of people flying to, from and within Russia and the CIS,” Boeing Vice President Randy Tinseth was quoted as saying in a company news release. “We expect passenger traffic for the region to grow at a rate of 4.3 percent on average.”

Analysts say that part of the increased demand can be put down to economic growth. According to International Civic Aviation Organization statistics, air passenger traffic increases by 1.8 percent for every 1 percent increase in GDP.

But Nikita Melnikov, special situations analyst at the Moscow-based Aton investment bank, said that other factors are at play, such as rising rail prices, which pushed up air travel during the 2008 financial crisis.

Government quotas will ensure that domestic producers will also benefit from the vast demand for new aircraft in Russia.

The Russian Transport Ministry is currently preparing a bill which would ban domestic airlines from hosting flights to destinations outside of Russia if they have too few Russian-made planes in their fleets.

Russia’s flagship airline Aeroflot signed a deal at this year’s MAKS air show near Moscow to buy 50 new Russian-made MS-21 airliners.

Elena Sakhnova, aviation analyst at VTB Capital investment bank said that Russian-made planes like the MS-21 and SSJ are likely to be used for Russia’s growing economyclass segment.

“There are some 4 million passengers in the Russian economy segment on top of the 1 million who fly business class,” Sakhnova said. “Business-class passengers prefer to fly on Western-made planes as that is what they have got used to.”

Read other articles of the print issue “The Moscow News #69”

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