Update June 3, 2008

Ural Mining and Metallurgical Company (UMMC) declared about the controlling stock interest purchase of the Czech Aircraft Industries company, producer of once popular regional L-410 aircraft. Under condition the state invests into local air transportations the plant products will be of high demand, as experts consider.

UMMC declared about purchase of 51% share of Aircraft Industries aircraft building company at the Czech Pamco Int. In UMMC report is said that a purchase was related to UMMC plans to develop new activity directions, such as regional air transportations and production of short-range aircrafts and gliders. Andrey Kozitsyn, UMMC director general, was quoted as saying that today small aircrafts is an almost untapped market, but Russian air industry concentrates on long-range and medium-range projects.

Iskander Makhmudov holding decided to enter the air business this year. In March UMMC declared about regional airline establishment on Ural, where the core extractive enterprises of the holding are located. It was planned to buy Czech Let-410 aircrafts produced by Aircraft Industries for an airline. And in May it became known UMMC was holding talks about the plant purchase (however, in UMMC did not confirm this information). Transaction sum is not exposed, but according to top-manager of the Russian aircraft building company, which has also been offered to buy Aircraft Industries controlling interest, the seller has estimated the interest at $15 million.

Aircraft Industries (earlier known as Let) was founded in 1936. Last brand-new model supplied by the plant is the 19-seat regional L-410 developed in the mid-1960th. At the beginning of the 1990th the model has been upgraded and is currently produced under L-420 mark. According to Aircraft Industries official website, more than 1 000 aircrafts have been sold during all L-410 family production, the majority of them – to the countries of the former USSR.

New owners will meet within shareholders’ meeting on June, 12, where their representatives will be introduced to directors’ board and the five-year strategic plan of the company development will be approved. And then the directors’ board will decide whether to produce new models, as explained in UMMC. In either case, the plant continues to produce L-410 and 420. These models correspond to the company needs by size, as explained in UMMC. Moreover, one can find pilots in Russia who know how to operate these aircrafts, as there have been hundreds of Let-410 in the USSR, as added in the holding

Analytic service head of AviaPort agency Oleg Panteleev considers UMMC has good chances to find sales market for L-410, as federal and regional authorities have already announced about the intentions to subsidize regional transportations. The range of regional projects appears with time for which these aircrafts will be bought, as supposes Mr. Panteleev. He adds that L-410 does not have serious rivals, as the immediate aircraft by size is the Russian AN-38 that is half as much bigger, and the western market does not have the analogical popular aircrafts as well. "Machine of this class will be of high demand in the nearest future", consents director general of Ilyushin Finance leasing company Alexander Rubtsov. The Russian airlines have to replace AN-28 with anything, and L-410 has been initially produced for the USSR needs, marks IFC director general.