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Thu, Mar 21, 2002

ANN Exclusive: What Happened to the Tu-144 Sale?

Last year, we showed you the Tu-144, the Soviet SST, the competitor to the Concorde. Though the crash of one example at the Paris Air Show in 1979 put an end to its commercial career, one was flown by NASA. There was another flying example, that sat at the Tupolev works, begging for a buyer. It turned up for sale on e-Bay ("7420 Lookers, no Bids for Soviet SST," 05-16-01, ANN).

It turns out, the plane didn't sell -- but it wasn't because there wasn't a realistic bid. There was.

Randall Stephens, who was brokering the sale, set the record straight with us. He told us he had a qualified customer lined up to buy the SST, but old Cold War-style paranoia crept into the mix.

He said his client "...intended to use it for maybe a year, as a way to introduce his new company. Tupolev said they could fly it for a while; then it was to have gone to a museum." Russian officials complicated the deal; they smelled money.

As for Alexsander Poukhov [Tupolev's General Designer], Mr. Stephens said, "I think he's a great guy, but I don't think he anticipated the dynamics of this deal's being as complicated as they tuned out." 

Stephens, who travels extensively in Russia, knows the language, and has a Russian-born wife, thinks there is a great future in bringing Soviet/Russian designs to the US and other markets.

Found his own machine on our site:

Mr. Stephens also wrote us a good explanation:

Regarding the Tu-144LL: While looking through a web search of the Tu-144LL, I happened upon your mention of the research SST. There was a buyer for the plane, and a deal was to have been completed. The sale however, could not be closed due to interference from the Russian Air Force and the foot-dragging of the ANTK Tupolev organization.

As for eBay, they cancelled the sale for their own reasons, when the bids were over $12M USD for the plane (the reserve price) three days before the bid closed. [eBay's rep] called on Day 6 of the 10 day bid, after the story had broken in the press. [Sorry 'bout that --ed.].

The bid was conducted within the parameters of eBay's rules, and the agent was operating on a legal "Power of Attorney" from ANTK Tupolev's General Director. A nervous eBAY decided not to allow this sale to continue in their site. Posted on my website (www.tejavia.com), the SST found a buyer within a week, and a deal was to have been completed, with Tupolev having an opportunity to fly the plane round the world for the buyer - who would have enjoyed immense publicity for a new company he planned to start.

Tupolev would have netted over twice the money they had asked their agent, Randall Stephens (myself), President of TEJAVIA LLC to find. It was due to my ability to foresee the ultimate value of the jet as an advertising opportunity - that the jet found a buyer at all. Tupolev General Designer, Aleksander Poukhov, had tried to find a buyer for the plane for over two years. What tanked the deal was interference from the Russian Air Force, which did not want the obsolete NK-321 "Blackjack Bomber" engines allowed out of the country. (Although the Tupolev organization claimed to have a lease agreement... which the buyer was interested in.)

I eventually posted the plane on eBay once more, selling it as a Static Display, without engines. (Tupolev's original request as such was for $2.2M "delivered.") The plane was to have been flown to USA and engines pulled, without any further promises of support from Tupolev; however, Tupolev failed to meet their promised delivery or cooperate with me or the buyer.

The deal did not finalize.

As President of TEJAVIA LLC, and as an aviation professional for over 23 years, I was saddened by the outcome of the affair. It cost me considerable money, which I will not recover. Unfortunately, the Russian Government keeps its hands too deeply in the aviation industry, which has demonstrated its ability to design and build great aircraft. Market economics, the need for commercial aircraft, and the costs of manufacturing in Russia today offer great potential. This potential is stopped cold by the inability of RF [Russian Federation] governmental authorities to overcome old habits.

The problem was not finding a buyer. The buyer emerged after the first eBay sale which was cancelled due to their suspicion of fraud. eBay would not allow me to fax and [overnight] copies of my documents from Tupolev, nor check with my attorney. Bad decision, but I respect them anyway. The Russian media (TV6) echoed loudly and inaccurately that the plane had sold for $10M last June. This caused a scandal at Tupolev, according to my Moscow advisor who met with Tupolev's General Director. The actual deal was to have had the Tu-144LL fly to points around the world with the buyer's startup company name on the side - rather like I had advertised. Limited spares limited the projected flights to less than 20 at best.

If people would work together, we could build a great and powerful economic partnership (USA-Russia) for the 21st century, perhaps after all the communists are gone. I am optimistic in spite of the outcome of the Tu-144LL "deal". There are great aircraft in Russia today, and I have a plan that can make great things happen.

Next?

I intend to be at the MAKS 2003 airshow as a vendor, supporting AMERICAN firms seeking a market presence in the Russian Federation and CIS markets. The MAKS (www.airshow.ru) is a great event and trade show for many industries. I still hope to represent certain aircraft made in the Russian Federation in the near future. There are ample opportunities to develop manufacturing of airframes/wing subsections in Russia for new designs, and to set up FAR 145 overhaul facilities.

Thanks for your informative and interesting website.

We were able to find out a bit more about Randall's next ventures. Dare we say, Il-96? That's a BIG (195-ft wingspan, 92-ton payload) cargo plane, with four P&W engines, a Collins panel -- in fact, just about all the "wear" items are US or Canadian-built. The airframe, he tells us, is certified -- at least provisionally -(?)- to FAR 25. The airplane can be imported to the US, under FAR 21-23a. "There's a lot more work to be done; I'll be working with a DAR (Michael Ionata), through  the Allentown (PA) MIDO," he told us.

FMI: www.tejavia.com

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