Deal Reported To Be Fragile Due To Cost Of The Aircraft

The Russian government is said to be backtracking on a potential purchase of AW139 helicopters because of the price of the aircraft, though Finmeccanica, AgustaWestland's parent company, says negotiations are still progressing.

AgustaWestland spokesman Roberto Caprarella told Reuters that "the order is still under negotiation" following a report from the Russian news agency Itar-Tass that Moscow was balking at the price. Itar-Tass quoted Russia's Deputy Defense Minister Yuri Borisov as saying "If they cut the price, then we can return to the issue."

The 35-aircraft order would be worth about 500 million euros, according analysts who spoke with Reuters. Caprarella said that the final cost would be determined by modifications requested by the customer, as well as equipment installed on the basic airframe.

AgustaWestland has established a final assembly plant in Russia for the AW139 to serve both that country and the former Soviet republics. That facility is operated by HeliVert, a joint venture between AgustaWestland and state-run Russian Helicopters.

The Russian news report was cited for a drop in share prices for Finmeccanica on the Italian blue-chip market.

(AW139 pictured in file photo)

FMI: www.agustawestland.com