Boeing, Airbus, Aeroflot and the Aerospace Industry

On May 31st, the U.S. airplane manufacturer Boeing upped the ante in its high—stakes competition with European rival Airbus to secure a $3 billion tendering contract for the construction of 22 passenger aircraft for the Russian airline Aeroflot. In a clear effort to gain favor with those Russian authorities who will determine the disposition of the contract, Sergei Kravchenko, head of Boeing's Russian operation, announced that his company intends to invest $27 billion over the next thirty years in Russia. These 'investments' would include the purchase of $18 billion in titanium, $5 billion in engineering, service, and intellectual products, and $4 billion in other related items and services. Although Kravchenko stated that the Boeing announcement was 'not a reply' to an earlier pledge by Airbus to invest $25 billion in Russia, no informed observer can take this claim seriously. The Russians certainly do not. Aeroflot's subsequent declaration on June 6th that it may delay its...(Read Full Article)

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