Perm Engine Company (PEC) has signed a memorandum with Ilyushin Finance & Co (IFC) regarding the deliveries of 105 PS-90A2 engines. According to Komersant - Perm, these engines are intended for Red Wings air line, which has an agreement with IFC on delivery of 44 Tu-204 SM.

The enterprise has recently signed a contract with Tupolev on delivery of four PS-90A2 engines and it has also signed the memorandum with Ilyushin Finance & Co leasing company regarding the delivery of 105 PS-90A2 engines.

According to the first contract, the delivery time is the second and third quarters of 2011, as for memorandum - the delivery period is 2012-2016. If the memorandum to be implemented, it would be the most eminent project in the modern history of PEC.

On the basis of PS-90A2 engine's average cost of $5 million, the amount of this contract can exceed $500 million. PEC has assembled 24 PS-90A engines of various modifications in 2010; assembly of 24 more engines is planned in 2011.

The memorandum is to be implemented if the contract with Tupolev will be successfully performed. It is planned to equip two more pilot Tu-204 SMs with the delivered engines in order to complete jet's certification in 2011. We remind that Tu-204 SM has performed its maiden flight in late 2010. Two more jets are needed for completing the certification process.

Russian mass media has reported earlier that Tu-204 SM program will be cancelled due to aircraft's high cost and the absence of orders. Alexander Lebedev, the owner of Red Wings, has addressed the government with a proposal on acquisition of 44 Tu-204 SMs in November. However, the businessman has requested to decrease aircraft cost from 1,5 billion roubles to 1 billion roubles, provide technical support and guarantee the jets' residual cost. The compromise has been achieved after some conversation at the price of 1,1 billion roubles.

The participants of Tu-204SM program and the government have agreed to keep the project alive at the beginning of this year. The amount of contract between IFC and Red Wings on delivery of 44 Tu-204 SMs is $1,5 billion. The first lump sum payment is 10%. In future, the deal will be financed using credit resources of VEB. The deliveries shall be started in 2012.