The American airline manufacturer Boeing has prematurely ended its contract with its foremost titanium supplier, VSMPO-AVISMA, following Russia’s invasion of Ukraine.
Boeing cancels contract with VSMPO-AVISMA
On Monday, 7 March, Boeing announced that they would no longer be sourcing their titanium from Russian firms, thus ending its contract with VSMPO-AVISMA. The Russian corporation is the world’s largest supplier of titanium and holds contracts with both Boeing and Airbus.
Titanium is an essential commodity in plane-making due to its high strength and low weight. It is used in the construction of a multitude of aircraft parts, from the landing gear to the engine to the airframe. Until now, VSMPO-AVISMA accounted for about a third of Boeing’s titanium requirements. Last November, at the Dubai Airshow, Boeing signed a ‘memorandum of understanding’ with the Russian manufacturer affirming that they would “remain the largest titanium supplier for current and future Boeing commercial aeroplanes”.
VSMPO-AVISMA Chairman targeted
Following Russia’s invasion of Ukraine however, things have changed. Earlier this month, an EU mandate prohibited the sale of aircraft parts or services to Russia. Consequently, the European manufacturer Airbus ceased its business with all Russian airlines. Boeing followed suit a few days later when the US announced its Russian sanctions.
Some of the US sanctions included actions against specific members of the “Russian elite”, which would ban them from the US financial system whilst authorities looked for assets that could be seized. One Russian elite mentioned is Sergey Chemezov, former KGB agent and chairman of VSMPO-AVISMA. Other sanctions have hit the Russian economy more generally, affecting supply chains and sending the Rouble to an all-time low. It is little wonder then that Boeing is keen to distance itself from Russian businesses.
Looking forward
The Aircraft manufacturer seems confident that it will cope without its leading supplier and said:
“Boeing has substantial titanium inventory due in part to an initiative several years ago to diversify our global sources. We have suspended purchasing titanium from Russia. Our inventory and diversity of titanium sources provide sufficient supply for aeroplane production, and we will continue to take the right steps to ensure long-term continuity.”
However, rival Airbus may not be in a position to drop VSMPO-AVISMA as their titanium supplier just yet. The European plane-maker still relies on Russia for half of its titanium needs. However, EU sanctions still allow aeroplane manufacturers to buy from Russian sources.
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