Ilyushin Finance Co, Rostec sign agreements with Bombardier on 100 Q400 turboprop airliners
ZHUKOVSKY. Aug 28 (Interfax) - Ilyushin Finance Company (IFC) has concluded a letter of intent with Bombardier Aerospace to acquire 50 Q400 turboprop airliners, an Interfax correspondent reported from the signing ceremony.
"The series of preliminary agreements between Bombardier and Rostec included an LOI for the sale of 50 Q400 NextGen aircraft; a Market Development Agreement reached with Rostec and its aircraft leasing subsidiary, Avia Capital Services that will provide an opportunity to place at least 50 additional Q400 NextGen aircraft in the region; and a memorandum of understanding (MOU) for industrial cooperation to validate the opportunity to set up a Q400 NextGen final assembly line in Russia," Bombardier said in a press release.
"Should the MOU lead to the establishment of a final assembly line in Russia, the aircraft that IFC intends to purchase would be locally assembled and, together with aircraft to be acquired by Rostec, make up a total of 100 Q400 NextGen aircraft that would be built in Russia for Russian customers," the press release says.
The contract would be worth $1.695 billion at the list price.
Rostec and Bombardier plan to set up a 50-50 joint venture. Rostec will build a plant in Ulyanovsk region over the course of 2014, investing about $100 million in the project. Bombardier will contribute all the required intangible assets: the production technology, design documentation, intellectual property rights and know how.
In the initial stage, all of the production will take place at Bombardier, with the Ulyanovsk plant only customizing completed planes for the specific buyer. In 2015, localization of assembly in Russia will begin and in 2016, the Ulyanovsk plant will begin manufacturing airframe components. The plant will have capacity to produce 24 planes a year.
Rostec has also concluded an agreement with Bombardier on a tentative order of 50 Q400 aircraft that will be acquired by Avia Capital Services. It will become a firm order after the joint venture is created.
Rostec chief Sergei Chemezov told journalists earlier that his company had signed a framework agreement with Bombardier, and an analogous agreement with ATR, a European manufacturer of turboprop regional passenger planes. Comprehensive localization will be the main criterion used to select the plane to produce, he said. The production facility is to be located in Ulyanovsk region.