Ulyanovsk-based Aviastar-SP, which didn't make a single plane last year, signed a $355 million contract Friday to build 25 Tu-204-120 passenger jets for Egypt's Sirocco Aerospace International, a deal that should keep the plant busy until 2006.

The contract -- which also involves the Tupolev design company, Aviaexport state export agency and the Russian Aviation and Space Agency -- is the largest in Russian aviation history.

"This deal brings us close to Soviet times, when [the industry] produced dozens of aircraft annually," Yevgeny Shaposhnikov, the presidential adviser on aviation, said at a news conference. "The only sad thing is that it is not Russian airlines that are buying these planes."

Sirocco holds exclusive rights to market and sell abroad the Tu-204-120, which is fitted with Rolls-Royce engines and Honeywell avionics. The deal is a major boost for Aviastar, which has the capacity to roll out 60 planes a year.

All of the $355 million will go to Russia, with engines and avionics to be procured separately, Sirocco chairman Ibrahim Kamel said. Aviastar-SP will receive $150 million next year to build the jets, upgrade its equipment and hire more workers.

The new aircraft will be built from scratch, a landmark step for the industry.

The first five Tu-204-120s, a cargo version of the plane, will be delivered to Chinese airlines beginning in 2004 under a contract signed last year, Aviaexport chief Felix Myasnikov said. China has an option for 10 more aircraft.

Kamel said that at least five aircraft would go to Egypt's Air Cairo, which received the first Tu-204-120 in 1998 and now operates five of the aircraft.

Negotiations are in advanced stages to sell the Tu-204-120 to customers in the Middle East and lease out the plane to European companies. "The signing of this contract will send the message that the Russian aviation industry is performing well and the future is wide open," Kamel said. "Russia's [aviation industry] is the only qualified third player in the world" after U.S. Boeing and France's Airbus.

Only six Tu-204s powered with Perm produced PS-90 engines are currently operated by domestic carriers. Aviastar-SP general director Viktor Mikhailov said his plant has firm orders for three more Tu-204s with Russian engines for domestic airlines.

Tupolev president Igor Shevchuk said that the domestic market could take some 100 of the aircraft.

(The Moscow Times 02.xii.02)