MOSCOW (Bloomberg) – Airbus SAS, the world's biggest builder of commercial jets, is in talks with Russia on forming a $25 billion partnership to develop a new aircraft as President Vladimir Putin accelerates plans to revive the country's aerospace industry.

The accord would generate about $1 billion a year in revenue for Russian companies through 2030, including $20 billion for the development of a new passenger plane, $3 billion in parts orders for Airbus's new A350 airliner and $2 billion for converting single-aisle passenger planes into cargo carriers, Airbus Senior Vice President Axel Krein told reporters in Moscow today.

``There is a race between the major aircraft manufacturers to form partnerships in countries like Russia and China,'' said Klaus Breil, who helps manage $6 billion at Adig Investments in Frankfurt, including shares in Airbus parent European Aeronautic, Defence & Space Co.

Putin is speeding up plans to consolidate the defense industry, including creating a national aerospace holding company from private and state-owned enterprises to challenge companies such as Paris- and Munich-based EADS and Chicago-based Boeing Co. Aircraft production in Russia, once the world's biggest builder, collapsed along with the Soviet Union in 1991 as government revenue and orders dried up. ---------Courting Aeroflot

Aeroflot, the biggest airline in eastern Europe and once the operator of the world's largest plane fleet, is seeking proposals for 22 long-haul aircraft and plans to announce next month whether it will buy Airbus's A350 model or Boeing's 787. The Moscow-based carrier has said it may sign an option for a further 12 airplanes, a total package valued at about $3 billion.

Airbus's proposal may sway Aeroflot's decision, Aeroflot Deputy Chief Executive Officer Lev Koshlyakov said. ``Everything can have an influence on the decision,'' Koshlyakov said via telephone in Moscow. ``Management has a pragmatic approach. However, our shareholders may have different priorities.''

The Russian government owns 51 percent of Aeroflot, which is run by CEO Valery Okulov, son-in-law of Putin's predecessor, Boris Yeltsin. Nobody at the Industry and Energy Ministry in Moscow was available to comment.

Putin signed a decree yesterday creating the Unified Aircraft Corp., which will bring together state-owned planemakers Sukhoi Aviation Co., MiG Corp., OAO Ilyushin, OAO Tupolev and publicly traded OAO Irkut Corp., which is partly owned by EADS. That move is one reason Toulouse, France-based Airbus wants to involve Russia in Airbus's next development project, Krein said. ``For us, it is a positive move. We're interested in strong and reliable partnership. We'll do whatever we can to help.'' -------------New plane

Airbus will take as long as three years to decide what technology to use in the new airliner and it wants Russia to be involved from the start of the project, Klein said, declining to identify which model the new plane will replace. ``Russia needs its own civil aviation industry and very powerful cooperation with international aerospace giants in America and Europe,'' Boeing Russia President Sergei Kravchenko said in an interview, declining to comment on Airbus's $25 billion proposal. ``We'll do our best so that we keep our leading position in cooperating with the Russian industry.''

Boeing and Airbus are vying to sell their latest generation of efficient planes to customers seeking better fuel economy. Boeing's 787 will be ready for commercial service in 2008, two years before the Airbus model. The rivals increasingly are seeking to tap into the engineering talent and lower labor costs in Russia's aerospace industry. ``Airbus really wants to get an order out of Aeroflot and appears to be losing to Boeing,'' said Richard Aboulafia, vice president of the Teal Group, a Fairfax, Virginia-based consulting company, in a phone interview. ``There's a real concern the Russian aviation market might just close up again so Airbus wants to have a presence on the inside.''

EADS in December paid $65.3 million for 10 percent of Irkut, a maker of Sukhoi fighter jets. Boeing employs 1,200 people at its engineering center in Moscow, where about a third of the design work on the 787 is being done.

Boeing is also a consultant on Sukhoi's project to build a new family of mid-range aircraft and cooperates with Russia on the International Space Station.

``We are speaking about a lifetime partnership,'' Krein told reporters in Moscow today. ``It's like a marriage.'' Airbus hopes to start producing the new jet in seven to nine years, he said, without elaborating.

Sukhoi's Russian Regional Jet of about 100 seats will compete with Empresa Brasileira de Aeronautica SA of Brazil and Bombardier Inc. of Canada. That project has attracted Finmeccanica SpA, Italy's largest defense manufacturer, which said today it will buy 25 percent of Sukhoi.

Shares of EADS rose as much as 41 cents, or 1.3 percent, to 32.15 euros and were unchanged at 31.74 euros as of 5:12 p.m. in Paris. The stock has gained 29 percent over the 12 months.