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29 Mar, 2008 17:41

Superjet 100 delayed in delivery shambles

Russia's first new passenger plane for 25 years, the Superjet 100, has suffered fresh setbacks and could miss the first delivery to Aeroflot in November.

Experts predict multi-million dollar fines for the company, while it is facing tough new competition from a Japanese rival.

Russia's new regional jet project has already missed its December target to start test flights. Mikhail Pogosyan, Sukhoi aircraft manufacturer CEO, insists they will start next month.

Now the boss of Sukhoi parent United Aircraft Corporation, the UAC, has admitted for the first time they may miss an even more serious deadline – the November delivery to Aeroflot of the first completed plane.

The UAC President said Russia's aviation industry was moving slower than hoped due to the quote “unprecedented” size of its projects.

“The creation of a holding the size of the UAC for Russia is unprecedented. We would like the process to go faster, but we hope to sort out exactly which unit will produce what by the end of this year,” defends the president of UAC Aleksey Fyodorov.

Fedorov claimed the UAC would not face fines for missing the November deadline, but Aeroflot's CEO told RT the penalties in place were significant for both sides.

“Fines are in place for late delivery from all our plane suppliers. However, no amount of money can compensate the losses an airline suffers for failing to hit its development targets,” insists Aeroflot CEO Valery Okulov.

Top aviation expert from Ingosstrakh Investments Evgeny Shago revealed the UAC's fines for late delivery could total hundreds of millions of dollars.

“The Aeroflot contract with UAC includes extremely serious fines for late delivery as well as for failing to meet acceptable quality standards. Their contract is worth $US 800 million and we can expect the fines to total up to 20% of that. Such a sum threatens the profitability of the entire Superjet project,” Shago says.

The Superjet project received a further blow on Thursday with the news All Nippon Airways had placed the first orders for up to 25 Mitsubishi MRJs, considered one of the Russian jet's toughest competitors.