Russia, Airbus Sign $4 Billion Titanium Deal

Russian state metals firm VSMPO-AVISMA will supply Airbus with titanium through 2020.

Russia inked a $4 billion contract with Airbus to supply the European aircraft manufacturer with titanium for its planes over the next decade. The agreement, hailed as a landmark deal between a European company and Russia, was signed at a ceremony in Moscow attended by Russia's Prime Minister Vladimir Putin.

Under the deal, Russian state metals firm VSMPO-AVISMA will supply Airbus with titanium through 2020. VSMPO-AVISMA is part of the state industrial holding Russian Technologies. The contract provides for Russian Technologies to supply Airbus with titanium used in the production of all its aircraft, including a new longhaul model, the A350 XWB.

VSMPO-AVISMA is the world's leading producer of titanium, valued in the aerospace industry for being light-weight and resilient. About 70% of the titanium producer's yearly output goes to export.

"We started with small steps but this is a great step forward," said Airbus chief executive Thomas Enders, who inked the contract with Russian Technologies head Sergei Chemezov. "This is an important strategic deal."

Putin said that Moscow intended to deepen its cooperation with the European aerospace group EADS, Airbus's parent firm. He added that Russian trade with EADS had grown 20 times since the first bilateral deals signed in the early 1990s. Russia currently manufactures components for Airbus planes and converts Airbus' A320 passenger liners for freight use.

The parties said on April 20 that the deal was the biggest and longest term contract "in the history of Airbus/EADS cooperation with Russian industry."

Chemezov, who also heads a startup airline company Rossavia, said that his firm was looking to buy planes from Airbus. "Today, we put an inquiry to Airbus for a whole range of its airplanes," Chemezov said at the signing ceremony. Rossavia needs around 200 planes to build up its fleet, he said, adding that the airliner would not exclusively purchase Airbus's planes but also place orders with other airline manufacturers.

Copyright Agence France-Presse, 2009

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