Russian aircraft maker seeks foreign partners

AVIASTAR, Russia's largest civil aircraft manufacturer, is seeking foreign partners to take a 50 per cent equity stake and to co-operate on technology and production.

The company, which was privatised last year, aims to become a third force in the commercial aircraft market after Boeing and Airbus, toppling McDonnell Douglas from the big three.

Aviastar has appointed Price Waterhouse Management Consultants as its business advisor. Victor Mikhaylov, director-general of Aviastar, said: 'Western companies are a little bit afraid of us. Price Waterhouse will help prove we are a reliable partner.'

Mr Mikhaylov said the company's modern dollars 4bn manufacturing facilities and low labour costs could prove attractive to other aviation firms. He said Aviastar aircraft could sell for up to 25 per cent less than competitors without sacrificing quality and technology. The company is initially targeting Third World markets, which already have a maintenance base for Russian aircraft.

In November, Aviastar became private through a presidential decree that gave its workers 25 per cent of the shares. Up to 20 per cent more shares are likely to be sold in Russia this year, with 50 per cent on offer to foreign firms.

The company employs 40,000 in the production of the four-engined AN124 cargo aircraft - the largest aircraft in service in the world - and the 200-seat Tu204, which can use Rolls-Royce or Russian engines.

Two years ago Aviastar set up Volgo Dnepr Cargo Airlines, which now co-operates with Heavylift Airlines of Stansted in the international air freight market. Aviastar is also a partner in the British Russian Aviation Corporation, which markets the Rolls-Royce-powered version of the Tu204 worldwide.

Aviastar has agreements with the four-nation Airbus consortium, in which British Aerospace is a partner, to ship wings and wing boxes between manufacturing sites. It is also in talks with a view to co-operation with Deutsche Aerospace.