Aircraft

Russia's government has backed United Aircraft's (OAK) efforts to bring focus to the country's civil aerospace industry, warning that any dreams of a multi-pronged product offering must be forgotten if the sector's fortunes are to be revived.

"It is high time to stop dreaming that Russia will produce everything," says prime minister Vladimir Putin. "Continuing attempts to lobby unpromising ideas bring nothing except a misuse of money and time."

Under the umbrella of OAK, maximum effort is being put behind the in-production Tupolev Tu-204 twinjet, the Sukhoi Superjet 100 large regional jet, which is in flight test, and the MS-21 next-generation medium-haul airliner, which is under development for service entry in the middle of the next decade.

Putin says that "criteria for OAK's effectiveness will not be the number of mock-ups, experimental aircraft or tests completed, but the actual number of series production aircraft sold, and profitability of their production".

Russia's state budget has Rb130 billion ($5.2 billion) allocated to the civil aerospace sector through 2009-2011 to fund research and development, production, technical refurbishment and leasing.

The government will not ease import taxes on western airliners, except for regional aircraft with fewer than 20 seats and large widebodies seating more than 300 passengers that are already in place.

Putin visited OAK's Ulyanovsk plant last week to chair a meeting where he approved the plan to integrate Uzbekistan and Ukraine's key aviation enterprises into OAK, providing that "the terms are acceptable for us and our partners".

Production at OAK's plants is running at a trickle, with just six new commercial airliners produced last year and 15 to be built this year. Some OAK civil plants will operate at a loss until 2011-12 until the benefits of refurbishment and streamlined production are realised. The government is investing Rb2 billion annually to slash bank interest rates on credit granted to fund OAK's refurbishment effort.