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Wed, May 30, 2007

Russian Airline Says It Will Order 15 Dreamliners

No, Not Aeroflot

This is one time Boeing doesn't mind settling for number two. On Tuesday, Russia's second largest airline, S7 Group, announced it will order 15 787 Dreamliners, making it the first Russian carrier to order the composite-bodied plane.

"This is so-called 'book value'. This is what we have agreed with Boeing to make public at this news conference," S7 General Director Vladislav Filyov told Reuters.

S7 -- formerly known as Sibir -- wasn't the first Russian airline to express interest in the 787, however. As ANN reported extensively, flag carrier Aeroflot hemmed and hawed many times between the 787 and its competition from Airbus, the A350 XWB, before ultimately ordering 22 Airbus planes earlier this year.

That decision was seen by many as at least somewhat political, due in part to strained diplomatic relations between the US and former USSR. The Russian government also owns a small stake in Airbus, as well as a one-quarter stake in S7... which makes the order that much more important for Boeing.

"We are very proud to launch the 787 today in the Russian market with a substantial order from this leading and fast-growing carrier," said Marlin Dailey, vice president of Sales for Europe, Russia, Central Asia, Boeing Commercial Airplanes. "S7's drive for innovation and new-technology products like the 787 will help it strengthen its key role in the Russian airline market."

Total value of the order at list prices is $2.4 billion, though it's unlikely S7 will pay close to that price (see above.) Filyov said the carrier also has 10 options for more planes.

"The option is an issue for separate talks," he said, adding he doesn't expect financing the purchase of the planes to be a problem. "The product is so good that banks are simply queueing up to finance it."

Last month, the airline also signed a contract to purchase 10 narrowbody 737-800s, with options for another 10.

S7's first seven Dreamliners are scheduled to entire service in 2014.

FMI: www.boeing.com, www.s7.ru

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