Cablegate: Ukraine: Aerosvit, Boeing Signing Worth Up to $1 Billion
PP RUEHDBU RUEHIK RUEHLN RUEHPOD RUEHVK RUEHYG
DE RUEHKV #1912 2181134
ZNR UUUUU ZZH
P 061134Z AUG 07
FM AMEMBASSY KYIV
TO RUCPDOC/USDOC WASHDC PRIORITY
RUEHC/SECSTATE WASHDC 3283
INFO RUEHZG/NATO EU COLLECTIVE
UNCLAS KYIV 001912
STATE ALSO FOR EB - FMERMOUD
USDOC FOR 4201/DOC/ITA/MAC/BISNIS
USDOC FOR 4231/ITA/OEENIS/NISD/CLUCYK
USDOC FOR 3150/USFCS/EUR/CEENIS/MCOSTA
USDOC FOR 3300/USFCS/GTS/KDUBIN
E.O. 12958: DECL: N/A
TAGS: BEXP EAIR UP
SUBJECT: UKRAINE: AEROSVIT, BOEING SIGNING WORTH UP TO $1 BILLION
REF: KYIV 01168
1. On August 2, Ukraine's largest carrier Aerosvit and Boeing signed
a purchase agreement for seven 737s valued at $523 million.
Aerosvit also secured an option to purchase another seven 737S,
potentially making the deal worth more than $1 billion. This order
marks Aerosvit's first direct purchase from Boeing since the carrier
was founded in 1994.
Aerosvit, which currently operates only leased Boeing aircraft, will
gradually replace its fleet of 13 Classic 737s with Next-Generation
737s. The Aerosvit order is the largest purchase of U.S. aircraft
in the region, and the largest single commercial transaction between
the United States and Ukraine to date.
2. The signing marked the successful completion of a year-long
tender process for Boeing in which Boeing prevailed over Airbus.
Aron Mayberg, President and CEO of Aerosvit, and Craig B. Jones,
Boeing's Vice President for Russia/CIS, signed the purchase
agreement on behalf of Aerosvit and Boeing respectively. Ukrainian
government officials who attended the ceremony included: Minister of
Transport and Communications Mykola Rudkovsky, First Deputy Minister
of Finance Vadym Kopylov, Chairman of the State Aviation
Administration of Ukraine Anatoliy Kolisnyk, and Deputy Head of the
Presidential Administration Viktor Bondar. DCM James Pettit
attended the event on behalf of U.S. Embassy Kyiv.
3. As part of the agreement, Aerosvit will lease 11 new Boeing
Next-Generation 737s from 2008-2011, to help Aerosvit facilitate the
airline's expansion plans while Aerosvit's order is filled. The 7
newly purchased aircraft will be delivered between 2011 and 2014.
In addition, Aerosvit and Boeing plan to begin contract negotiations
on the purchase of wide-body aircraft later this year. As part of
its fleet renovation program, Aerosvit intends to purchase four
wide-body jets; Boeing has tentatively offered Aerosvit four 787