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Sun, Sep 17, 2006

Fickle Aeroflot Delays Purchase Decision

Rivals Airbus & Boeing Left Standing By....

Are they just being coy, or is it a clever attempt to get a better deal? As ANN reported last week, Aeroflot convened a meeting of its board to discuss a plan to purchase new aircraft. They met, they talked, and they decided... uh, not to decide -- yet.

Deputy Chief Executive Officer Lev Koshlyakov told Bloomberg News from Moscow, Aeroflot's base, that the purchasing decision had been postponed for a later meeting. He gave no date for the next meeting.

Meanwhile, rivals Airbus and Boeing, both hoping for a large, delicious piece of Russian pie, are left instead to salivate while wondering on the mysteries of the Slavic mind.

Rumors in the press had Aeroflot, Eastern Europe's largest air carrier, meeting to discuss doubling a proposed purchase of 22 aircraft. Speculation had it they might choose Airbus, Boeing or a mix of the two types.

Economic growth in Eastern Europe has the airline biz growing much faster there than the rest of the world, giving rise to Boeing's and Airbus's hopes to get a foot in the door.

It was widely thought in the aviation community Aeroflot was looking hard at Boeing's 787 Dreamliner and Airbus's A-350 series. The Dreamliner and A-350 are mid-sized jets with maximum seating under 300 -- and good replacements for Aeroflot's aging Tupolev and Ilyushin airliners, of which there are 52 in its fleet.

In April, Aeroflot joined the SkyTeam alliance, a consortium of carriers including Air France-KLM Group and Delta, and announced its intent to purchase 22 aircraft shortly thereafter. On September 12th Koshlyakov had said they might double that order to 44 planes.

Russia's recent purchase of 5% of EADS, Airbus's parent company, and an upcoming summit in Paris between Russian President Vladimir Putin, French Prime Minister Jacques Chirac and German Chancellor Angela Merkel, all countries with a large stake in EADS' future, doesn't bode well for Boeing.

Add a European penchant to "keep it in the family,"  and Boeing may need to look elsewhere for its pie.

FMI: www.aeroflot.com

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