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DEFENSE and SECURITY (Russia)
August 22, 2012 Wednesday
SUKHOI THREATENS ARMAVIA WITH LEGAL PROCEEDINGS ABOUT SUPERJET-100
by Maria Kiseleva
Source: Izvestia (Moscow issue), August 20, 2012, p. 4
HIGHLIGHT: ARMAVIA GIVES UP SSJ-100 BECAUSE IT IS UNPROFITABLE AND ITS
SPARE PARTS ARE EXPENSIVE; Representatives of Sukhoi Civil Airplanes
(GSS) report that the company is waiting for further actions of
Armenian air carrier Armavia because of refusal to take Sukhoi
Superjet-100 airplane back from repair. Spokesperson for GSS Andrei
Muravyev explains that if the situation goes to a dead end the
manufacturer of the airplane will file a lawsuit against the Armenian
company. According to Muravyev, the contract between the companies
implies that a dispute between the companies will be heard in a
Russian arbitration court.
Representatives of Sukhoi Civil Airplanes (GSS) report that the
company is waiting for further actions of Armenian air carrier Armavia
because of refusal to take Sukhoi Superjet-100 airplane back from
repair. Spokesperson for GSS Andrei Muravyev explains that if the
situation goes to a dead end the manufacturer of the airplane will
file a lawsuit against the Armenian company. According to Muravyev,
the contract between the companies implies that a dispute between the
companies will be heard in a Russian arbitration court.
Armavia was the starting customer of Sukhoi Superjet-100 (SSJ-100)
airplane. It purchased the first series-made airliner in spring of
2011 and had to buy another airplane in June of 2012. This week,
Armavia announced that it refused to take the airplane from repair.
The airplane being on the company's balance is undergoing repair on
the territory of GSS. Representatives of Armavia said, "We think that
it is not expedient to take the airplane because the airplane has
needed repair in a year of operation."
In response, representatives of GSS said that Armavia did not pay $4
million for it. The Armenian air carrier was also accused that it did
not pay money for the non-warranty part of the airplane's repair,
spare parts and preplanned technical maintenance. Representatives of
GSS explain that the airplane used by the air company is pledged with
one of Armenian banks and it is necessary to remove this burdening if
the customer gives the airplane up.
GSS did not receive documents about termination of the contract yet.
Muravyev explains that if Armavia wants to terminate the contract
officially besides the debt for non-warranty maintenance the indemnity
outlined by the contract will be deducted from the money already
received by GSS. Representatives of United Aircraft-Building
Corporation (UAC) of which Sukhoi is a part explained that Armavia as
operator of the first series-made airplane received a significant
discount for it.
Representatives of UAC said:
- In practice discount for the first customers is not less than 30% of
the catalog price in the year of signing of the contract. In 2011,
catalog price of SSJ-100 amounted to $31.7 million. Thus, the Armenian
air carrier could buy the airplane for about $20 million.
Besides the payment of expenses of GSS Armavia will also have to
compensate Vnesheconombank for the expenses on structuring of the deal
according to agreement between the companies. Representatives of VEB
said this. Consulting services were necessary because Armavia planned
to get re-credited by VEB for purchase of the second SSJ airplane
stated in the contract. However, in early July Armavia announced that
it would not buy the second Russian airplane because it failed to
achieve a compromise with GSS. The press service of VEB remarked that
then Armavia gave up the financing offered by Vnesheconombank for
purchase of the second Sukhoi Superjet-100 too.
If the air company does not compromise and the situation goes to a
dead end Sukhoi may file a lawsuit against Armavia to enforce the
money.
A representative of GSS explains:
- The trial will take place in Russia because the contract has been
signed in accordance with Russian laws.
Representatives of Armavia did not deny that the company drew a credit
for purchase of the first airplane SSJ-100 from one of Armenian banks.
Along with this, Armavia does not report the details of how the
company plans to legalize giving up of the airplane.
Representatives of the air company also say that "the airplane has
been at GSS in Russia for two months and the company does not plan to
take it back because it is economically unprofitable."
Official spokesperson for Armavia explains:
- All over the world the first models of produced airplanes are
retrofitted and this is a newly made airplane and that is why it
requires even bigger retrofitting. Armavia is a small private company
and it cannot bear the costs of retrofitting of the airplane.
Representatives of Armavia also complain that spare parts for the
airliner are more expensive than spare parts for its Western
counterparts.
Muravyev says that now GSS is waiting for solving of the problem on
the state level. Earlier, Prime Minister Dmitry Medvedev ordered the
Ministry of Industry and Trade and the Foreign Ministry together with
UAC to work out the matter of operation of Superjet-100 by Armavia by
September 15.
According to Editor-in-Chief of Aviaport agency Oleg Panteleev, the
Ministry of Industry and Trade takes serious effort to persuade the
Armenian part not to give the airplane up and has a peaceful attitude.
In this case the conflict may be resolved without a trial. Along with
this, GSS is in a difficult situation: if an airplane is arrested and
stays on the ground current payments for it are not received and the
company bears losses.
[Translated from Russian]
August 22, 2012 Wednesday
SUKHOI THREATENS ARMAVIA WITH LEGAL PROCEEDINGS ABOUT SUPERJET-100
by Maria Kiseleva
Source: Izvestia (Moscow issue), August 20, 2012, p. 4
HIGHLIGHT: ARMAVIA GIVES UP SSJ-100 BECAUSE IT IS UNPROFITABLE AND ITS
SPARE PARTS ARE EXPENSIVE; Representatives of Sukhoi Civil Airplanes
(GSS) report that the company is waiting for further actions of
Armenian air carrier Armavia because of refusal to take Sukhoi
Superjet-100 airplane back from repair. Spokesperson for GSS Andrei
Muravyev explains that if the situation goes to a dead end the
manufacturer of the airplane will file a lawsuit against the Armenian
company. According to Muravyev, the contract between the companies
implies that a dispute between the companies will be heard in a
Russian arbitration court.
Representatives of Sukhoi Civil Airplanes (GSS) report that the
company is waiting for further actions of Armenian air carrier Armavia
because of refusal to take Sukhoi Superjet-100 airplane back from
repair. Spokesperson for GSS Andrei Muravyev explains that if the
situation goes to a dead end the manufacturer of the airplane will
file a lawsuit against the Armenian company. According to Muravyev,
the contract between the companies implies that a dispute between the
companies will be heard in a Russian arbitration court.
Armavia was the starting customer of Sukhoi Superjet-100 (SSJ-100)
airplane. It purchased the first series-made airliner in spring of
2011 and had to buy another airplane in June of 2012. This week,
Armavia announced that it refused to take the airplane from repair.
The airplane being on the company's balance is undergoing repair on
the territory of GSS. Representatives of Armavia said, "We think that
it is not expedient to take the airplane because the airplane has
needed repair in a year of operation."
In response, representatives of GSS said that Armavia did not pay $4
million for it. The Armenian air carrier was also accused that it did
not pay money for the non-warranty part of the airplane's repair,
spare parts and preplanned technical maintenance. Representatives of
GSS explain that the airplane used by the air company is pledged with
one of Armenian banks and it is necessary to remove this burdening if
the customer gives the airplane up.
GSS did not receive documents about termination of the contract yet.
Muravyev explains that if Armavia wants to terminate the contract
officially besides the debt for non-warranty maintenance the indemnity
outlined by the contract will be deducted from the money already
received by GSS. Representatives of United Aircraft-Building
Corporation (UAC) of which Sukhoi is a part explained that Armavia as
operator of the first series-made airplane received a significant
discount for it.
Representatives of UAC said:
- In practice discount for the first customers is not less than 30% of
the catalog price in the year of signing of the contract. In 2011,
catalog price of SSJ-100 amounted to $31.7 million. Thus, the Armenian
air carrier could buy the airplane for about $20 million.
Besides the payment of expenses of GSS Armavia will also have to
compensate Vnesheconombank for the expenses on structuring of the deal
according to agreement between the companies. Representatives of VEB
said this. Consulting services were necessary because Armavia planned
to get re-credited by VEB for purchase of the second SSJ airplane
stated in the contract. However, in early July Armavia announced that
it would not buy the second Russian airplane because it failed to
achieve a compromise with GSS. The press service of VEB remarked that
then Armavia gave up the financing offered by Vnesheconombank for
purchase of the second Sukhoi Superjet-100 too.
If the air company does not compromise and the situation goes to a
dead end Sukhoi may file a lawsuit against Armavia to enforce the
money.
A representative of GSS explains:
- The trial will take place in Russia because the contract has been
signed in accordance with Russian laws.
Representatives of Armavia did not deny that the company drew a credit
for purchase of the first airplane SSJ-100 from one of Armenian banks.
Along with this, Armavia does not report the details of how the
company plans to legalize giving up of the airplane.
Representatives of the air company also say that "the airplane has
been at GSS in Russia for two months and the company does not plan to
take it back because it is economically unprofitable."
Official spokesperson for Armavia explains:
- All over the world the first models of produced airplanes are
retrofitted and this is a newly made airplane and that is why it
requires even bigger retrofitting. Armavia is a small private company
and it cannot bear the costs of retrofitting of the airplane.
Representatives of Armavia also complain that spare parts for the
airliner are more expensive than spare parts for its Western
counterparts.
Muravyev says that now GSS is waiting for solving of the problem on
the state level. Earlier, Prime Minister Dmitry Medvedev ordered the
Ministry of Industry and Trade and the Foreign Ministry together with
UAC to work out the matter of operation of Superjet-100 by Armavia by
September 15.
According to Editor-in-Chief of Aviaport agency Oleg Panteleev, the
Ministry of Industry and Trade takes serious effort to persuade the
Armenian part not to give the airplane up and has a peaceful attitude.
In this case the conflict may be resolved without a trial. Along with
this, GSS is in a difficult situation: if an airplane is arrested and
stays on the ground current payments for it are not received and the
company bears losses.
[Translated from Russian]