IRKUT SIGNS $200 MILLION CONTRACT WITH AIRBUS

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MOSCOW, December 22 (RIA Novosti) - The European aircraft-manufacturing consortium, Airbus, has expanded the number of its Russian suppliers. Yesterday, Airbus signed a 10-year $200 million contract with Irkut. (Irkut includes two aircraft manufacturing plants. Its major products are Su-30MK fighters and Be-200 amphibious aircraft.)

Four significant work packages are included in this contract: the nose landing gear bay, keel beam, flap track and a floor grid section. Irkut plans to start shipping the components in 2006.

Irkut, Vedomosti reported, hopes the contract will help make the manufacture of components a pillar of its business. According to an Irkut official, with the contract, the company can expect future orders for more complex parts and even entire sections of aircraft. The official said that Bombardier and Eurocopter (EADS) had shown an interest in ordering components from Russian manufacturers. Irkut's acting president, Valery Bezverkhny, said that in several years the production of components would be up to 45%-50% of all Irkut orders.

Russian analysts said the expansion of component manufacturing would allow Irkut to diversify its business.

Some experts said that because these contracts do not include the manufacture of complex aircraft systems, the current orders would not lead to qualitative changes in the industry. These contracts can help solve current problems related to the effective use of existing capacities. However, they will only ensure the development of the Russian aircraft industry if a transfer of respective technologies to Russian companies accompanies the cooperation.

Airbus is willing to continue expanding its presence in Russia. Next year, the company plans to sign a series of 10-year contracts with other Russian aircraft manufacturers worth $150 million. Airbus COO Gustav Humbert said the company hoped to increase its cooperation with Russian aircraft manufacturers to $800 million in ten years.

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