In the course of his article, he also has a few things to say about this week’s news that Aeroflot missed a key deadline in its interim agreement with Boeing for the purchase of 22 of the American firm’s 787 Dreamliners. As a result of the Russian government’s failure to approve formally the $3 billion deal by November 1st, Aeroflot has lost out on a discount of some $10-15 million on each of the planes. Thomas speculates that the decision may be a gambit aimed at further strengthening the Kremlin’s hand in its efforts to secure a significant role in the development of the Airbus A350 XWB (Extra-Wide Body) a potential rival to the Boeing 787. (A final announcement from Airbus on the A350 XWB project is expected this month).

Whatever the future holds for Moscow’s Airbus connection, the missed deadline with Boeing is bad news for those concerned about Russian air safety. At the earliest, the 787s originally contracted for 2010-2012, now will not arrive in Russian until 2014. For some passengers facing the prospect of flying on aging Aeroflot aircraft, those two additional years may well mean “Eternity.”

In other news, this past week the Moscow Prosecutor-General’s Office arrested Alexander Surikov, general director of the aircraft parts supply company SB-120 Sheremeyetvo. (SB-120 has a warehouse at the Moscow airport, but is not affiliated with the airport authority itself.) Surikov was taken into custody along with Viktor Gamayunov, the company’s Chief Engineer. The two have been charged with fraud, document forgery, and violation of airline safety rules for supplying faulty aircraft parts and for conspiring to sell parts with expired service lifetimes. The company had come under scrutiny during investigations into the sorry state of Russian’s civilian aviation programs begun in the aftermath of the Tu-154 and A-310 crashes earlier this year.

If Thomas Lifeson’s speculations regarding the Kremlin’s motives for missing the deadline on the Boeing agreement are correct, they would suggest Russian officials’ willingness to sacrifice safety on the alter of perceived state interests. This would be a callous and cynical approach to rebuilding the country’s aviation program but one, unfortunately, not without historical precedent…

ScP

In a joint statement issued yesterday, EADS co-chairmen Manfred Bischoff and Arnaud Lagardère dismissed the Russian demand as impossible under the terms of the company’s governance agreement, noting that:

“The existing corporate governance rules and structure have proved their efficiency for all shareholders. It would not be in the interest of the company to change corporate governance or enlarge the group of industrial shareholders,”

The recent and unwelcome maneuvering by the Russians has been made possible by two factors: burgeoning oil and natural gas revenues which have added billions to the Russian state’s coffers and a concomitant, precipitous collapse of EADS’s market value. Since issuing a profits warning in late July thanks, largely, to continuing problems with the delivery of Airbus’s new A380 passenger craft, EADS has seen its stock decline by 25%.

Complicating matters is the fact that Airbus (along with its American competitor Boeing) awaits a decision by Putin’s government on the purchase of 44 aircraft for the Russian state airline Aeroflot. A final decision on the purchase, valued at around $6 billion, has been repeatedly (and, no doubt, intentionally) delayed.

Clearly, Russian demands for a greater stake in EADS are part of the Kremlin’s ongoing maneuvers to squeeze the best possible deals from the two foreign rivals in advance of the decision on the Aeroflot purchase. Having rebuffed the Kremlin on a greater roles in their company, EADS officials may now find it necessary to offer other concessions in order to secure a purchase contract with Aeroflot.

In then end, though, Putin’s government may well decide that its most advantageous course is to split the difference and place two orders for 22 planes from each of its foreign suitors. Doing so would enable Russia to maintain cordial relations (and continuing influence) with both of the world’s leading aircraft firms, keeping all future options open as it moves forward with a desperately needed overhaul of its civilian and military aviation sectors.

ScP