Russia to buy 50 Boeing 737s worth four billion dollars

AFP - Friday, June 25

WASHINGTON, USA (AFP) - – President Barack Obama on Thursday said that Russia was buying 50 Boeing aircraft valued at four billion dollars that could create 44,000 jobs in the struggling US economy.

Obama, speaking after White House talks with Russian President Dmitry Medvedev, said the order was part of a broad array of trade and investment deals between the two countries.

"Consistent with my administration's national export initiative, this includes the sale of 50 Boeing aircraft worth four billion dollars that could add up to 44,000 new jobs in the American aerospace industry," Obama said.

In a statement released after Obama's comment, Boeing said that it had signed a document with the Russian state corporation Rostechnologii "confirming the decision by Rostechnologii to place an order for 50 Boeing Next-Generation 737 airplanes."

The document was signed during Medvedev's official visit to the United States, the aerospace giant said, without providing further details.

"Rostechnologii's selection of Boeing airplanes demonstrates its commitment to deploying the optimal solution for the market needs," the Chicago-based company said.

Touting "the economic benefits and operating efficiencies" of the Next-Generation 737, Boeing said the planes would "directly support Rostechnologii's plan to provide Russian airlines with efficient and reliable airplanes that will help them to consolidate and grow their domestic and international operations."

"We look forward to continuing our long-term partnership with Rostechnologii and finalizing the contract," the company said.

Jim Proulx, spokesman for Boeing Commercial Airplanes, said in an interview with AFP that the 50 Next-Generation 737s were worth "3.6 billion dollars at current list price."

Commercial aircraft are often sold below list value.

Proulx noted the agreement signed was for the Russian state firm to purchase the planes, but further details needed to be worked out for a firm contract, such as which airlines would be taking the planes, delivery dates and deposit amounts.

The US company briefly announced at the end of May that the Russian state firm had selected the Next-Generation 737 for its aviation business development.

Boeing currently has an order backlog of 2,000 for the planes.

Last week Boeing announced a second production rate increase on the Next-Generation 737 program, taking the rate from the rate of 34 airplanes per month, previously announced in May, to 35 planes in early 2012, citing continued strong demand.