Russian Sukhoi signs loan deals for regional jet development

Airline Industry Information, March 29, 2005

AIRLINE INDUSTRY INFORMATION-(C)1997-2005 M2 COMMUNICATIONS LTD

Russian aircraft maker Sukhoi has secured loans totalling USD100m from state banks for its Russian Regional Jet (RRJ) project, according to a Sukhoi spokesperson.

The company has reportedly signed a deal with a number of financial institutions including Vneshtorgbank and Sberbank to finance the project, which the combat jet manufacturer is developing with advice from US aircraft maker Boeing Co.

Sukhoi has started to assemble RRJ parts and hopes to test the short-haul passenger aircraft at one of its production sites at the end of 2006. It plans to start selling the model from 2007, reported Reuters. The total costs are estimated at over USD700m.

So far only domestic airline Sibir has signed a contract with Sukhoi to buy RRJs, placing an order for 50 at a catalogue price of USD25m, while the Russian postal service and airline and helicopter operator UTair have expressed interest. Talks with potential foreign buyers are developing successfully, a source in Sukhoi told Reuters, but did not provide any further details.

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