Shareholders of Aeroflot Group (which includes Aeroflot, Rossiya Airlines, Pobeda Airlines and Aurora Airlines) have approved a major financial transaction for the operating leases of 50 new MC-21-300 narrow-body aircraft, at the holding company’s Annual General Meeting held on June 25, the airline group reports.

The new aircraft – a Russian single-aisle twinjet airliner project being developed by Irkut – will be leased from Aviacapital-Service (a subsidiary of State Corporation Rostec), which is currently leasing 50 Boeing 737-800s to Russia’s flagship carrier. The planned timeframe for delivery of the MC-21s stretches from Q1 2020 to Q3 2026 and the lease term is 12 years for each aircraft, with an option to extend this by two additional years, for a maximum of three times.

The total value of the transaction is estimated at US$5.231 billion, from which the monthly lease fee per aircraft will not exceed US$437,282.

Aeroflot and Rostec signed the contract for the provision of 50 of the Irkut-made advanced aircraft in February of this year. With the first batch of 25 units powered by Pratt & Whitney PW1400G-JM engines, from the 26th delivery onward the option of Russian-made PD-14 turbofans becomes available. The new Russian powerplant is currently in the middle of its own certification test programme.

Aeroflot’s MC-21-300s will come with 16 business class seats  and 153  in the economy cabin. The airline has also opted to equip each aircraft with Wi-Fi capability.

The airline requires that all aircraft delivered from January 1st, 2021 to have European Aviation Safety Agency (EASA) certification.

The contract stipulates a guaranteed annual flight time per aircraft for the first three years of operation – 2,100 flight hours in the first year (with guaranteed dispatch reliability of 96 per cent), 2,900 in the second year (with 97 per cent dispatch reliability) and 3,750 flight hours in the third (98.5 per cent).

Aeroflot has also signed up for Irkut’s offer of a Launch Customer Package covering the first 20 aircraft. This provision includes a warranted compensation scheme, payable in the event that specified flight time targets for the first three years are not achieved.

The total limit of the compensation payment is US$45.1 million, with the exact amount calculated at the end of each year based on actual flight hour numbers. Where the flight times fall short of those stated in the contract, the operator will be eligible for a compensation payment, which it may use for purchasing optional equipment and spare parts, or for staff training.

However, where the specified target is exceeded, the compensation amount will be proportionately reduced.

Another guarantee specifically outlined in the contract deal covers fuel consumption. Irkut guarantees that for an average route of 3,240 km, with a pre-set load and with a tailwind of 14 knots, the aircraft will burn no more than 9,865 kilos of fuel.

Two other Russian airlines, IrAero of Irkutsk and Red Wings of Vnukovo, Moscow, are set to be the launch customers for the MC-21, with their delivery dates set for 2020.