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Airbus signs $4 billion titanium deal with Russia news
21 April 2009

Airbus, one of the leading aircraft manufacturers producing around half of the world's jet airliners, has signed a long-term contract with the state corporation 'Russian Technologies' for the supply of titanium products for its airplanes.

The $4 billion deal will secure Airbus a reliable source of special products which are used in the manufacture of many components and assemblies of modern aircraft.

The agreement, hailed as a landmark deal, was signed in Moscow on Monday by the director general of Russian Technologies Sergei Chemezov and Airbus chief executive Thomas Enders in the presence of Russian prime minister Vladimir Putin.
"We started with small steps but this is a great step forward," said Thomas Enders.

Chemezov said: "The signed agreement demonstrates that Russia can offer high technology products to the world markets.'' ''During a period of economic crisis, having stable orders is extremely important." He added.

Chemezov who also heads a new airline company Rossavia said it would need around 200 aircraft and the company placed an enquiry to Airbus for a whole range of airplanes.

A preliminary agreement was reached between the two sides last year, covering the supply of round and flat-rolled titanium products and stampings for contemporary Airbus models.

Airbus, the aviation giant is owned by the European Aeronautic Defence and Space Co.(EADS), a large European aerospace corporation.

Prime minister Putin said Moscow intended to deepen cooperation with the EADS mentioning that Russian trade with EADS had grown 20 times since 1990.

The world's largest titanium producer, VSMPO-Avisma which is part of the Russian Technologies will meet 60 per cent of the Airbus's titanium requirements up to 2020.

Titanium is known for its low specific weight and high strength characteristics, corrosion resistance and high temperature stability.

VSMPO-Avisma, with its main production facilities in Sverdlovsk, Russia, is a world leader in titanium and magnesium alloys and other metal products, exporting 70 per cent of its products to the international market. Its major customers include Boeing, Airbus, Snecma, General Electric, and Rolls-Royce.

In 2007, the company had signed a contract with Boeing for the supply of titanium products up to 2015.

In the present economic scenario, aircraft industry is hopeful that the global slowdown will have no significant impact on existing orders and backlogs. However, it would impact the new orders with IATA projecting a 12 per cent decline in revenues due to fall in passenger traffic and cargo.

Airbus CEO said in Brussels on Thursday that governments should help provide financing for airlines to buy planes. He warned that aircraft manufacturers could cut production if the economic crisis deepens.

Airbus delivered 483 aircraft in 2008, 30 plus compared to the previous year. The company's main rival Boeing delivered 375 airplanes, 66 down compared to 2007.

Airbus won 777 orders in 2008 against 1341 in 2007 whereas Boeing's orders were lower at 662 in 2008 although that was higher at 1413 in the previous year.

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Airbus signs $4 billion titanium deal with Russia