Aeroflot Decision on Next Aircraft Definitely Not Indefinite

Apparently "indefinitely" is a lot shorter time span than I thought. Just last Friday Aeroflot said the decision on their next aircraft purchase was on hold indefinitely. Then Monday an Aeroflot shareholder decided it made good business sense to lock in the deal for the Boeing 787. But that deal was not blessed by the Russian goverment who are trying to leverage some influence with Airbus parent company EADS. Today, Aeroflot is announcing that they will purchase both the Boeing 787 and the Airbus A350. The purchase would be staggered with 22 787s being delivered 2010-2012 and 22 A350s from 2012-2016. Apparently this decision has appeased the Kremlin and both deals will receive the endorsement of the Russia government.

Aeroflot Decides to Keep its Place in Line

A 30% Aeroflot stakeholder and seriously rich guy Alexander Lebedev decided that Aeroflot needed to keep there options open on a deal to by 22 787 from Boeing. As I posted just yesterday politics, finance and business plans are swirling at the Russian airline as they try to decide on their next major aircraft purchase. The deal on the table with Boeing is a sweet one with a reported $10 million dollar discount being offered per aircraft. Mr. Lebedev decided to step up and secure both the terms and Aeroflot's place in the delivery line before the terms of the offer expired.

Hmmm...lemme see here, 22 multiplied by $10 million per aircraft...hey, that's a pretty big chunk of change that Aeroflot just saved by making this deal now. This is a good business decision for Aeroflot. Secure the deal and the delivery slots now before the deal gets away. If Russia pressures the carrier into buying Airbus A350s in an attempt to build influence at EADS they should be able to easily sell off these aircraft even before they are delivered. Very shrewd. You will also note that Boeing is not doing their tradition happy dance normally associated with a $3 billion (with a "b", billion) aircraft deal. Another sign that this deal is anything but truly done.

Aeroflot Delays Decision on the Next Big Thing

Aeroflot had been poised to make a $3 billion commitement on 22 long range aircraft until it announced late last Friday that this decision would be delayed "indefinitely". The Boeing 787 was seen as a front runner since its most direct competitor, The Airbus A350 is still on the drawing board without any buyers yet. Spin control has local media reporting that Aeroflot doesn't really know what they want. But it seems to me there is a fair bit of politics running amok here. Reuters is reporting that Russia is in "bilateral talks" with the U.S. as it tries to join the World Trade Organization while a Russian bank has just purchased a 5% stake in Airbus parent company EADS. According to the article the Kremlin has been seeking some influence in the business decisions at EADS. So what will win, world politics or state interests?