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Friday, March 16, 2018

Egypt puts Russia conditions of purchase “Superjet”

The return to Egypt of Russian tourists has become one of the conditions of purchase Cairo Russian aircraft. This is not the first political agreements associated with such massive deals. And although Cairo benefits from this exchange is more for “Dry” this deal also means a lot.

“The resumption of Russian tourism in Egypt can be a determining factor for the motivation of Egypt to sign a new deal at the Sukhoi Superjet, especially taking into account the renewal of EgyptAir”, – RIA “news” the statement of the Minister of industry and trade of Egypt Tariq of Kabila, citing the Egyptian newspaper Youm7.

“Egypt understands that SSJ-100 of them is not going anywhere, whereas this is an opportunity to put pressure on Russia and quickly to resolve the issue of the lack of Russian tourists

Thus, Egypt is directly linked to the purchase of Russian ships with the resumption of Russian tourist arrivals to the country. Later it was confirmed by the Minister of industry and trade of Russia Denis Manturov.

We are talking about a contract for the supply of 40 aircraft SSJ-100 for EgyptAir. That deal a number of liners is discussed with Egypt, Manturov told in February of this year. Prior to this “Sukhoi Civil aircraft” (SCAC) has announced EgyptAir delivery of 12 SSJ-100 aircraft.

While Denis Manturov knowingly reacted to this position of Egypt. “Colleagues, of course, interested in increasing the purchase of up to 40 aircraft, but it will all depend on when a decision will be made on the resumption of routes from Russia. First and foremost, of course, focused on the transportation of tourists from Russia, from different cities of the Russian Federation. Some time will have to wait for decisions by the aviation authorities of Russia on the launch of the routes in the Egyptian direction,” – said the head of Ministry of industry and trade.

Actually Russian tourists little flying Egyptian airlines, mainly Russian carriers and Charter flights. However, the Egyptian authorities can understand. “The development of civil aviation of Egypt in the imposition of restrictions by the Russian side, is really in need of incentives – said the Director of business development QBF Margarita Gorsheneva. – The authorities implying that the purchase of aircraft needed the money, and in the absence of tourist revenues to the Treasury were scanty”.

According to the Minister of tourism of Egypt, as a result of the decline in tourist activity monthly, the country’s economy loses over $ 270 million, or $ 3.2 billion per year. If you take loss pure from Russian tourism, they can be about $ 2.5 billion per annum (2014). Then all Egypt’s revenues from foreign tourism amounted to $ 7.5 billion, the share of Russian tourists was 30%.

In any case, with the return of the Russian tourists Egypt wins a lot more than Russia from the sale of 40 aircraft, which will cost about $ 1.5 billion at the catalog price of one SSJ-100 in 38 million dollars. And, of course, Russia will get all the money immediately, but depending on the conditions of sale or lease, delivery times.

“Selling aircraft with more than fits into Egypt’s revenues from Russian tourists, not to mention the fact that Egypt gains in the use of modern, competitive aircraft” – said the first Vice-President of the Russian Union of engineers Ivan Andrievsky.

While Egypt understands that SSJ-100 from them and so are not going anywhere, whereas this is an opportunity to put pressure on Russia and quickly to resolve the issue of the absence of Russian tourists. “As Egypt refuses SSJ-100 is not due to, for example, the high price of the aircraft or higher in comparison with competitors the cost of their further maintenance in this situation the position of Egypt is nothing short of blackmail”, – said Kirill Yakovenko from “ALOR Broker”.

From the purchase of the SSJ-100 is not the first time you refuse for political reasons. So, in December 2015, the Latvian airline AirBaltic had to abandon the purchase of Sukhoi Superjet-100, although the user of the carrier argued that for him this deal would be cost-effective. However, the government blocked the deal, publicly stating political reasons for this decision.

For the project SSJ-100, which remains unprofitable and in General, was only possible thanks to public investment, new orders, especially foreign, important.

“This deal with Egypt would be one of the largest aircraft procurement in the history of the SSJ,” says Yakovenko. Now operates a total of 66 aircraft of this type. In addition to EgyptAir, among foreigners sides SSJ was interested in Irish CityJet, carriers from South Africa and Morocco, Russian largest operator is “Aeroflot” – he has 26 aircraft.

Deliveries abroad are still single, only Mexico has secured a serious contract for 21 the Board. The promotion of the SSJ-100 even on the Russian market, too, is not quite as smooth. “Maintenance and spare parts for SSJ even within the Russian Federation cost more than the operation of Boeing or Airbus, in particular, it was one of the reasons for abandoning the use of domestic aircraft company Red Wings,” recalls Yakovenko.

There are problems with the creation of an effective network of technical support liners. Against this background, care, the Italian shareholder Leonardo-Finmeccanica from participating in the project – a bad sign. After all, the foreign partner was to start establishing foreign contracts and service network SSJ-100 abroad. However, given that this plan went so-so, and the Italians promised to continue to fulfill their obligations and after leaving the shares in the project, all this can be not so terrible for the export prospects of the SSJ-100.

To reach break-even by 2019, as planned, the President of UAC (which includes GSS) Yuri Slyusar, is too optimistic, experts say. Corporations have had to change the production plan of the project from 800 to approximately 600 aircraft to 2031. Demand for the aircraft was lower than expected.

“The loss of any prospective contract for the GSS is extremely critical and painful. But it is unlikely that such blackmail by the Egyptian authorities will be able to force the government to abandon the ban on the sale of tours,” – said Yakovenko. However, in his opinion, you can count on that much by 2019, GSS will be able to sign a number of lucrative contracts with foreign buyers and finally start to build a network of support.

“Russia continues to look for new markets, and they may be found in the countries of the Asia-Pacific region, in Latin America, Africa, the middle East. The problem is that SSJ-100 is not yet popular brand, but as soon as you go sales, positive feedback, there will be more buyers,” – said Andrievsky.

But while the conquest of the market of the Russian aircraft too early. “It is hampered by sanctions, political pressure, the difficult economic situation in the country. But since the severe phase of the crisis, judging by the statements of Russian state leaders, the country has passed, we can hope that things will get livelier next year, including sales of SSJ-100,” concludes Andrievsky.

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