Russia might offer trade-in scheme to MC-21 customers

The MC-21 could replace older Boeing and Airbus narrowbody models in Russian carriers' fleets The government is to come up with a workable solution by September (Irkut Corporation)

Russian Prime Minister Dmitry Medvedev has given the Transport Ministry, the Finance Minstry, and the Ministry of Industry and Trade until September 2017 to come up with trade-in schemes that could be offered to airlines looking to purchase the country’s new Irkut MC-21 narrowbody passenger aircraft. Medvedev’s decree to that effect has been posted on the Russian government’s website.

The trade-in model, which implies that an operator can give up its current aircraft in partial payment towards the newly ordered ones, is expected to spur demand for the MC-21, thus moving Russian carriers to renew their fleets.

Industry experts warn that any such scheme would not work without leasing companies acting as mediators. A lessor would receive MC-21s on special terms and then lease them to operators in return for older airliners with a relatively high residual value. Under such a scheme, the MC-21 is expected to replace Boeing 737CL and Airbus A320ceo aircraft in Russian operators’ fleets. Finding new customers for the airliners thus phased out should not be much of a challenge. 

Trade-in schemes are broadly used by the leasing divisions of major OEMs (such as Boeing Capital Corporation and Airbus Asset Management) as a measure to stimulate sales of new aircraft models.

Applying the same method to the MC-21 would give lessors access to a variety of narrowbody aircraft, effectively making their portfolios more versatile.

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