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Russia: Aircraft industry on the verge of collapse

Dame Chkatroski - 5/13/2011

There is no good news from the Russian aircraft industry in Moscow.

The last news had bad impact on Kremlin therefore there is a need of longer period such as five years and lots of money should the consequences need to be amortized. There is a need of at least 20 billion dollars more than the envisaged.

The fist news came from some African countries that are interested into purchase of Russian military airplanes. The offers of the Russia were rejected and probably were not considered seriously.

The second news came from India. The Indian army has announced a tender of the century regarding the armament of its army with new planes in the amount of 10, 5 billion dollars. Russians and Americans were rejected into the first round, although somebody in Kremlin tried to convince that Russia due to the prices and performances of the planes shall win the century deal.

There were few wrong steps made by Russia regarding the plane and equipment delivery in New Delhi.

Due to the bad business procedures of the Russian manufacturers that are result of the bad condition of the entire Russian aircraft production, New Delhi stopped the procedure.

Civil aircraft production

This year the only bright thing of the Russian airplane production was within the civil sector.

Sukhoj -SSJ 100 had the first commercial flight from Armenia to Moscow.

This passenger plane must succeed as a project. Maybe this is the only and the last hope of the Russian aircraft industry. Although only 50 % is produced in the western countries (most of the equipment) Boeing was asked for help and assistance.

Someone considered this of a defeat of the entire Russian aircraft industry but the rationalists and realists considered this of a success that should help new mutual projects with the western manufacturers to be realized.

Russia needs help in this field. The problems are really complex. Kremlin gives billion rubles each year from the budget in order to keep this industry into function.

This industry is very important for Kremlin thus reconstitution and rationalization with the help of western experts and companies is not even considered. They are more than necessary now.

Being worried of the poor quality plane production Medvedev and Putin bought western manufactured planes within the administrative fleet.

According to Russian sources until 2020 Russia shall need 1300 planes in order to modernize the civil fleet and cover its needs. I think that the number is higher for 400-500 planes and that the real number is 1700-1800.

Regarding the army, the situation there is much more complicated. They should think of the planes they need, their purpose, their targets and finally to decide which are the “enemies” and of course to find money for all these.

Military aircraft production

The platform T-10 is good for development and is the best export article but there are fewer buyers.

The problems within the army aircraft industry are big enough so that with each new project few planes are produced but there are not any buyers.

What is more interesting is the fact that the entire aircraft production makes much more projects and few planes by a project than the rest of the other manufacturers around the world.

The project bureaus work very hard but the manufacturers cannot do anything about it and cannot advertise it commercially. It is matter of time if these project companies can handle this pace even though there isn’t any commercial base of the projects.

There are less conflict situations among the countries from the third world. The problems are inside the countries and not into the neighborhood. It is not only about the world finance crisis. Somalia, Sudan or Madagascar shall decide to purchase modern passenger planes, one of which costs the same as 2 super modern hunter planes.

The Russian aircraft industry should be reconstituted as soon as possible and all available things to be sold. It should be sold without any sensitivity and the rest of it should be estimate by the Russian market and the world’s market.
The pre dimensionality disease is still present.

Cooperation with the west as the one of SSJ has proved to be beneficial.
SSj should find one more Russian manufacturer and to finance it regarding the modernization and the new technologies.

Modernization of Il-96 and Tu-204 is possible and the answer is familiar to everyone:

1. Super control of the quality
2. Appliance of new materials in order to make the construction lighter ( 5-7%)
3. New motors that are available on the market and reduction of the consumption for 15-20%
4.Improvement of the aerodynamics and implementation of the western technology like the one in SSJ

If the project M21 will be approved, there will be enough plane models in Russia for export.

The Russian aircraft industry should be constantly modernized as well as the present projects should be modernized without wasting money on new ones. The cooperation with Western companies can be of benefit to Russia. There are too many people employed into this industry and the competition form Brazil and China can make this industry to collapse.

Following the collapse of electronic industry if Kremlin allows this industry to collapse then Russia should say goodbye to high technology and thus it is time for Kremlin to request help form the western partners in order to save the industry as much as it is possible.

Whether Kremlin shall request help from Airbus or Boeing it depends on the emotions and Russian pride but also stubbornness. Unnecessary costs such as billions from the Russian budget had been paid as a price for this stubbornness for several times.

In the period of two years Russia either shall sell part of this industry or shall close it.

This should be clear in Kremlin long time ago, but let’s see what moves are about to be pulled and if they are to be rational.