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UAC to invest USD300 million in MS-21 facilities – Suppliers Share Wrap

Russia’s stated-owned United Aircraft Corporation (UAC) announced plans to invest USD300 million in infrastructure to support Irkut’s new MS-21 narrowbody. Irkut’s main manufacturing site, which currently produces military aircraft, will undergo upgrades. In addition, new manufacturing facilities will be established in Ulyanovsk, for wings and composite materials, and in Kazan, for aircraft components.

At the same time, Russian Technologies State Corporation (Rostechnologii) confirmed it plans to acquire 50 MS-21s, for use by Aeroflot. An formal purchase agreement with UAC is expected to be signed shortly. In May-2010, Russian Technologies awarded Boeing a tender for 50 B737NGs, along with 15 purchase options.

These aircraft will also go to Aeroflot, reportedly for use by the Rossiya regional airlines as it is consolidated into Aeroflot through Rostechnologii. A merger between Rossiya and Aeroflot is expected to be completed in late 2010 or early 2011.

The impending Rostechnologii order would push MS-21 orders to 140 aircraft. As of Jul-2010, Irkut had signed firm orders with Ilyushin Finance, VEB-Leasing, Norwind Airlines, Crecom Burj Resources and one unnamed customer for 101 aircraft, with 39 purchase options also taken.

Selected Original Equipment Manufacturers daily share price movements (% change): 07-Sep-2010

Selected Aviation Suppliers & Leasing daily share price movements (% change): 07-Sep-2010