KrasAir Orders First Shipment Of An-148

The Russian airline will lease 15 Antonov-148 planes for over USD 200 mn. A total of 10 planes will be delivered for 10 years starting in 2006-07. Russian airlines use outdated Tu-134 and Yak-42 for regional transportation, which have become inefficient due to rising fuel prices. Production of the planes will be conducted at the Aviant plant in Kiev and the Voronezh aviation plant in Russia. Concorde Capital:Motor Sich (MSICH: Buy), produces engines for the An-148 and will benefit from the contract for the new planes. However, Russia?s decision to begin producing its own helicopter engines may weaken MSICH?s competitive position. Presently, the Klimov plant in Russia designs engines and produces up to 100 units annually, while annual demand for helicopter engines in Russia is estimated at 250-300 units. Motor Sich is the only serial producer of helicopter engines in the CIS, and Russia, concerned over Ukraine’s intention to join NATO, wants to ensure it will have a sufficient engine supply.