Boeing Gets Creative in Russian Strategy

America's Boeing Corp. expects leasing to provide short-term prospects in the Russian market, where strong growth coincides with cash-poor airlines, its top Russian executive said.

"We are very realistic, Russian airlines, in most cases, are not in a good financial situation and for these companies leasing is a good solution," said Sergei Kravchenko, president of Boeing Russia.

However he added: "Passenger and freight traffic in Russia is growing very quickly, it's stable growth and will lead to an increase in demand for aircraft."

Currently, "our first clients are leasing companies and we would like to see more ... but it depends on Russian investors and ministers," Kravchenko said.

Customs tariffs of 20 percent and a nearly equal level of sales tax "makes it practically impossible to import new planes into Russia," he added, while noting that Russian admission to the World Trade Organisation could help solve the problem.

Looking ahead, Boeing is upbeat that its economic 7E7 model under development will attract clients in Russia once it enters service, which is scheduled for 2008.

The company said it provides 79 percent of the 110 aircraft capable of carrying more than 150 passengers that currently operate in the CIS.