Russia's biggest air show hurt by economic crisis, sanctions

Tue Aug 25, 2015 12:43pm EDT
 
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* Russian civil aviation firms hit hard by economic crisis

* Military aircraft orders faring much better

* Biennial MAKS air show is Russia's biggest

By Gleb Stolyarov

ZHUKOVSKY, Russia, Aug 25 (Reuters) - Russian civil aviation companies face a disappointing week at the country's largest air show that opened on Tuesday as economic crisis and Western sanctions take a heavy toll on order books and scare away many foreign firms.

By contrast, demand for Russian military aircraft is booming and the biennial MAKS air show is increasingly being used to showcase the country's military might. According to Russian media, Russia and Iran will sign a $1 billion deal during the three-day show for S-300 missiles.

Two years ago -- just before the Ukraine crisis plunged relations between Russia and the West to their worst level since the Cold War -- the MAKS air show generated some $21 billion in deals, a figure civil aviation firms can only dream of today.

"The reasons why the number of deals is falling is very simple - the Russian aviation market is shrinking because of a steep rouble devaluation as people's purchasing power declines and they travel less abroad," said Andrei Rozhkov, infrastructure analyst from Metropol brokerage.

"Russian companies have not only stopped purchasing new planes, they are postponing delivery under old contracts."   Continued...