Setback for Tu-204SM as Atlant-Soyuz scraps order

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Moscow's governmental carrier Atlant-Soyuz appears to have cancelled its order for 15 modernised Tupolev Tu-204SM aircraft, calling into question the type's production programme.

Municipal transport department chief Vasily Kichedzhi, who heads the airline's board of directors, says it has decided not to follow up the agreement concluded with leasing company Ilyushin Finance in 2009.

He cites the high price of $50 million per aircraft and the lessor's reluctance to give a discount. "We expected that, as a launch customer, Atlant-Soyuz could count on favourable terms but didn't obtain them," he says.

Ilyushin Finance director Alexander Rubtsov says the company has received a notice of decision from the airline to back away from the deal. But the Tu-204SM's high production costs, he says, leave no room for price concessions.

"There should be an order for 40-50 aircraft to recoup investment in the project," says Rubtsov. "We're seeking alternative customers among the second-tier domestic airlines."

Tupolev is developing the type to replace the baseline Tu-204-100 with a view to producing up to 100 aircraft under co-operation between its manufacturing plants Aviastar and KAPO.