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Originally published Wednesday, August 6, 2014 at 6:11 PM

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Sanctioned Aeroflot unit wants more 737s from Boeing

Despite sanction-related suspension of flights, Dobrolet, the low-cost unit of Russia’s Aeroflot, plans to buy $1.5 billion of the single-aisle jets from Boeing.


Bloomberg News

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Dobrolet, the low-cost unit of Russia’s Aeroflot grounded by European Union sanctions, plans to buy $1.5 billion of single-aisle jets from Boeing.

Deliveries of the 16 Boeing 737-800s would occur in 2017 or 2018, and Dobrolet has paid a deposit, Maxim Fetisov, a spokesman, said Wednesday.

Marc Birtel, a Boeing spokesman, said Dobrolet intends to take the planes while declining to say when the deal would be booked as a firm order.

Announcing plane purchases amid Dobrolet’s flight suspension signals Aeroflot’s determination to return the discount carrier to the skies in the face of EU penalties over the Ukraine crisis.

State-run Aeroflot halted Dobrolet’s operations on Aug. 4, a day after European companies annulled leasing, servicing and insurance contracts with the unit.

Dobrolet had two Boeing 737-800s in service and 10 more on order, Aeroflot Chief Executive Vitaly Savelyev said last month. He said at the time that the carrier didn’t plan additional jet purchases until Russia further liberalized its air-carriage rules.

The 737-800 retails for $93.3 million, according to Boeing’s website. Buyers typically pay less than list prices. The 737, the world’s most widely flown jetliner, competes with planes from Airbus’ A320 aircraft family.

Dobrolet placed the deposit for the jets Aug. 4, Fetisov said, the same day the carrier parked its existing aircraft. The airline flew between Moscow and the Crimea, the region whose defection from Ukraine to rule from Moscow escalated political tensions.

Sanctions by the United States, Europe and other countries have targeted different aspects of Russia’s economy over the Ukraine conflict.

The EU’s actions affected Dobrolet, for example, while earlier U.S. measures included travel bans on associates of Russian President Vladimir Putin.

The Russian leader struck back Wednesday with restrictions on food imports from countries imposing sanctions because of his support for the Ukrainian rebels.

For Boeing, an agreement with a Russian carrier keeps open a sales channel that was closed during the Cold War. Aeroflot’s first Boeing order came in 1997, the plane-maker’s website shows, and the Russian company’s total was 48 jets through June.

In May, Boeing Chief Operating Officer Dennis Muilenburg skipped the St. Petersburg International Economic Forum, following pressure from the White House.



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