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Offset row may kill Russian A350 deal

Aeroflot commitment reliant on greater participation

Moscow is warning that flag carrier Aeroflot could drop its tentative A350 XWB commitment if the Airbus governments refuse to grant Russian industry a greater role in the European manufacturer's airliner programmes, including an eventual A320 replacement.

Russian minister for economic development and trade German Gref says Moscow "has repeatedly made signs" to Germany and France over its intention to procure more EADS shares and gain some influence over the running of the European aerospace giant, as well as Airbus.

Gref adds that if the Kremlin does not manage to agree a "long-term partnership strategy" with the Airbus nations and the company itself, Moscow may turn to alternative suppliers.

Russian industry leaders are also unhappy with the offset package they have been offered following 51% state-owned Aeroflot's decision to purchase 22 A350s. Although on 22 March EADS and Russia's United Aircraft (OAK) signed four protocols as part of the A350 commitment, "the key question" of participation in an eventual A320 successor remains unresolved. As a result Russian industry leaders may block the signing of a firm contract between Aeroflot and Airbus at either the Paris or Moscow air shows later this year.

OAK president Aleksei Fiodorov says that Russia could drop some of its ambitious civil aviation development plans if Airbus and OAK can reach a strategic partnership agreement that would see Russia keeping its "systems integrator role" on a common project. Russia wants this to be the next-generation A320, but is willing to discuss other options. Moscow is demanding a final assembly line in Russia as part of any agreement.

According to Russian negotiators, Airbus is not ready to agree to Russia taking a leading role in the A320 replacement, that would encompass a family of jetliners seating 120-180 passengers. The European manufacturer is said to prefer to see Russian industry taking the lead on either a new 200- to 250-seater or a next-generation 100-seater that would follow the Sukhoi Superjet 100 in the 2014-16 timeframe.

If a deal is not agreed between EADS and OAK before the Moscow air show in August, Russia will commit to launching its indigenous MS-21 next-generation narrowbody airliner family, the negotiators say. The Russian government has indicated its intention to provide $3 billion funding to develop the MS-21 between 2007 and 2013.




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