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Aeroflot may pick Airbus over Boeing

Russian airline Aeroflot’s decision to delay a $3 billion plane order amid chilled U.S.-Russian relations has sparked speculation it will pick Airbus over Boeing Co.
/ Source: Reuters

Russian airline Aeroflot’s decision to delay a $3 billion plane order amid chilled U.S.-Russian relations has sparked speculation it will pick Europe’s Airbus over U.S. rival Boeing Co.

U.S. Vice President Dick Cheney criticized Moscow’s commitment to democracy and its policy on energy reserves last week, adding to friction caused by Washington’s tough stance on Russia’s bid to enter the World Trade Organization.

The 51-percent government owned airline is set to retaliate by deciding to buy 22 of the Airbus A350 model rather than rival Boeing’s 787, according to a weekend report in Russian newspaper Vedomosti, which cited an unnamed government official.

A source familiar with the situation told Reuters that Aeroflot had delayed its decision.

“This has become highly politicized. It’s been delayed several times and ...it’s delayed again,” the source said.

Airbus spokesman declined to comment, while Boeing would only say: “We continue to talk with the customer.”

Airlines flipping back and forth between Airbus and Boeing as they negotiate for new planes is a common practice used to extract the lowest price possible.

Aeroflot told Reuters on Saturday that it had made no final decision on the deal, which would help France-based Airbus at a critical time for its A350.

Boeing got the jump on Airbus by launching its 787 first and sales of the plane, due in 2008, have been brisk.

The A350, meanwhile, has drawn few major airlines and in an oddly confrontational move, the head of International Lease Finance Corp., which owns one of the world’s largest aircraft fleets, has called for Airbus to rethink the design.

ILFC agreed to buy up to 20 of the planes last November.

Calls for Airbus to widen the fuselage of the A350 would mean an all-new design and likely delay its debut, which is now set for 2010.

U.S. Vice President Dick Cheney last week told Baltic and Black Sea leaders that Russian President Vladimir Putin was backsliding on democracy and using energy reserves to “blackmail” Moscow’s neighbors.

Russian Foreign Minister Sergei Lavrov responded with a point-by-point rebuttal and questioned how informed Cheney was on the issues.

Bilateral talks with the United States on Russian WTO membership have run into difficulties as the U.S. looks for assurances regarding access for foreign banks to Russia’s market, intellectual property rights and tariffs on farm goods and aircraft.