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Russia, EADS agree to develop new cargo aircraft

KAZAN, May 21 (RIA Novosti) - Russia's United Aircraft Building Corporation (UABC) and the European Aeronautic Defense and Space Company (EADS) have agreed to develop a new cargo aircraft, a senior presidential adviser said Monday.

Addressing a business forum organized by the European Bank for Reconstruction and Development in the capital of the Volga republic of Tatarstan, Arkady Dvorkovich said: "An agreement has been reached with ÅADS to develop a cargo aircraft."

Dvorkovich said earlier Monday that Russia's state-run foreign trade bank Vneshtorgbank (VTB) could increase its stake in the European Aeronautic Defense and Space Company (EADS) if the aerospace corporation and the United Aircraft Building Corporation (UABC) agreed on a joint production deal. VTB bought a 5% stake in EADS for 1 billion euros (about $1.35 billion at the current exchange rate) last year.

Dvorkovich said the production of components for Airbus could be localized in the country under a wide cooperation program being implemented by EADS-owned Airbus and the Russian aviation industry. Airbus said it expected the cooperation program to generate a turnover of more than $800 million over 10 years for Russia.

EADS controls 10% of Irkut, one of Russia's largest aerospace holding companies and part of the UABC, and an EADS official has been on the Irkut board since March 2006. In 2010 EADS and Irkut will open a joint venture to convert of A320 passenger jets into cargo aircraft.

The UABC, which is 90% state owned, incorporates aircraft building companies and state assets engaged in the manufacture, design and sale of military, non-military, transport and unmanned aircraft in a bid to streamline the Russian aviation industry.