Motor Sich to lose Russian market for AI-222-25 engine?

Russia’s Omsk Engine Union might start producing the AI-222-25 engine, which is made by Motor Sich (UX: MSICH UK), Economicheskie Izvestiya reported this morning, citing a press release from Omsk Engine Union. Omsk Engine Union is linked with Russia’s Salut, which was one of the creators of the AI-222-25 engine, but has not produced it yet. Vitaly Gorovoy: Russia has already made several attempts to obtain the intellectual property rights for some Motor Sich engines. However, the parties have been unable to resolve their conflict so far.  In our DCF model, we expect Motor Sich’s revenues from the sale of AI-222-25 engines to be USD 360 mln in 2011-20E (~6% of revenue from aircraft engine sales). We note that Motor Sich has been engaged in similar disputes over the rights to build D-27 (for An-70 aircraft) and D-436 engines (for An-148 and Be-200 aircraft), which are currently only produced by Motor Sich.