VOLGA-DNEPR WANTS MORE AN-124S

Boomin specialist 'heavy and awkward' project cargo sees Russian airline, beginning talks about financing expansion, writes Roger Hailey

RUSSIAN freighter, airline Volga-Dnepr is in talks, with customers and Western finaace houses about furtper long-term orders for tne giant Antonov-24-100 aircraft, each costing around $100m.

Alexey Isaikin, chairman of the carrier based in Ulyanovsk, says the continuing boom in specialist "heavy and awkward" project cargo will prompt an aircraft order in "three or four years".

The next generation of Russian - built An124s will have western engines and avionics with an increase in payload from 120 tonnes to nearly 150 tonnes.

But at a total price of $100m apiece and a minimum production run of 10 jets, Volga - Dnepr will have to schedule its order with other freighter airlines to ensure the four - engined jets are built.

The price of each jet, shell and wings, is between $60 and $80m, rising to $100m with Rolls - Royce or GE engines and US avionics.

Volga - Dnepr, which already operates nine of the older version jets, will take delivery of a 10th AN124.

In doing so it will use one of two existing aircraft "fusilage shells" lying idle at the Aviastar production plant in Ulyanovsk.

Due for delivery at the end of the next year, the new Volga - Dnepr plane will have a bargain price tag of around $30m.

That deal involved a 10-year funding agreement with International Finance Corporation, the private sector arm of the World Bank.

IFC's investment consists of a $16.9m loan of it's own account and a syndicated load of $13m provided by Dutch company FMO.

Declan Duff, director of ICF's infrastructure department, said: "Volga - Dnepr is building an international business on foundation of Russia's unique airframe building industry.

"We expect that the investment will help to demonstrate the strengths and potential of the private sector transport industry in Russia.

"We believe that it will encourage other financiers to invest in the transport sector."

Mr Isaikin is confident that the demand for project cargo using specialist freighters will continue to grow.

"We offer a quick response and flexibility, said Mr Isaikin, speaking through an interpreter.

The airline boss predicts that there is market for up to 50 of the new version of AN124s over the next 20 years or so.

Meanwhile, the recent US west coast ports stoppage saw a doubling of Volga - Dnepr demand for ad hoc transpacific charters.

The nose - loaded AN124 can "swallow" yachts and helicopters in one gulp, something the main deck of a Boeing 747 freighter cannot do.

The two aircraft types work for totally different markets, with the fuel - efficient B747F handling containerized, easy - to - load, high yield consumer goods.

The AN124, with thirstier engines at present, was designed for military use with its cavernous non - containerised innards and can land at a far greater range of airports.

Oil companies in particular like AN124, because they can fly expensive and heavy equipment closer to the final production area instead of dismantling the machinery for deepsea transport, with an awkward inland journey at the other end and problematical reassembly.

Volga - Dnepr is planning for $150m turnover this year, well up on last year's unrepresentative $100m but in line with the $140m for 2000.

Around half the revenues come from transatlantic routes, with the rest from transpacific or Europe to Africa and the middle East.

Regular clients include Lockheed for sensitive satellite moves from Denver to Cape Canaveral.

But for the first half of this year the charter scene was dominated by humanitarian and some military charters, while the second half has so far seen a resurgence in normal civilian commercial charters.