It is hardly possible to watch news footage of the world's trouble spots and disaster areas without seeing an appearance by the distinctive bug-like shape of a Mil Mi-8 or Mi-17 helicopter. The robustness, reliability and simplicity of this much-updated machine has made it the quintessential workhorse of the United Nations, relief agencies and armed forces outside the West.
But Russia's expertise in the heavyweight helicopter sector has been a double-edged sword as its lack of expertise in the vastly bigger light/medium market has let the riches to be gained there slip away to the West.
Now the industry is steering its considerable resources towards securing a belated presence in the smaller category, and it is doing so under the management of the Moscow-based Russian Helicopters (RH) - the state-sponsored equivalent in the rotary world of Russia's United Aircraft.
Kazan's future depends on the Ansat, which has attracted significant interest
There is a wide consensus about the importance of attacking the new market and, although there are tensions between the management company and the production plants, the relationship appears more productive and less political than with UAC. That may be in part because the Mil and Kamov design bureaux have been merged into Russian Helicopters itself, but also because the helicopter factories are turning out reasonably successful products, and perhaps because those plants have their own design functions and revenue streams.
General director of Russian Helicopters is Andrey Shibitov, who, under a strategy agreed last year and covering the period to 2015, has set about creating a more or less unified enterprise. His ambitious aim is to increase Russia's global market share from 4% to 15% by 2015.
Shibitov says: "The main aim of the strategy is to raise the competitiveness of the company on the world market. It consists of three main ideas: first is a competitive line of products, then a research and development base, and then after-sales services.
"We have completed the basic corporate activities and procedures that make the holding. It doesn't mean that all the relationships in the holding are ideal, but now RH is a managing company for all the factories and it plays the role of sole managing body for them. It means that we have all the conditions that allow us to implement and carry out our policy.
"As a managing company we co-ordinate the line-up of models. Before there was no one programme of research and development. For example, Mil had its development programme and Kamov had its own vision. Now we have one programme for all design bureaux."
In a way that has eluded UAC, Shibitov has also put in place a rigorous multi-stage review process for determining which projects should be supported. That includes a council of experts consisting of a permanent core drawn from the former constituent companies and who are now able to review each other's legacy programmes, plus appropriate experts drafted in, depending on the product. The final decision is taken by a project committee.
COUNCIL OF EXPERTS
Shibitov says: "The council of experts is a technical body with only specialists and no administrators. I prohibited administrators in order not to influence their decisions."
He adds: "We understand the models we developed earlier for serial production have limited competitiveness on the market. So that is why our first priority is the modernisation of the existing models and raising their competitiveness in the short term."
In parallel, RH is attempting to launch at least four new models: the Mi-38, Ka-62, Ka-226T and Ansat. "These are the models that are planned to appear on the market as soon as possible - within three years," says Shibitov.
"Our previous experience was connected with heavier helicopters. This was the specific trend of the USSR. But it played a very negative role when our manufacturing companies came into the international market to look at the problem from a market point of view.
"So one of our aims is the diversification of the model line-up - to move into the civil sector of the most popular types of helicopter from 3t to 8t. That is why types like the Ka-226, Ansat and Ka-62 should appear on the market as soon as possible."
At the sharp end of this strategy are plants such as Kazan Helicopters, the primary plant producing, and now having design authority for, Mi-8 and Mi-17s, but which also houses its own design bureau and is working energetically to get its new models to market.
The plant, 700km (450 miles) east of Moscow in Tatarstan, epitomises the state of the Russian rotary sector, turning out well-received machines from a dilapidated factory in dire need of investment.
Igor Bugakov, first deputy director of science and technology strategy for the plant - and the number two executive - is cautiously optimistic about life under the new structure, although he doubts Shibitov's market forecast.
He says: "The management of the managing company is still under development. It is not yet finalised. Day by day they are improving their style of work and at the end we hope it will be excellent. From our point of view, the integration is a positive trend. First of all this is a reduction in competition between the plants that produce similar products. But still the relationship and especially the management is not yet finalised. They are trying to find out the most efficient way of management."
He adds, however: "Russian Helicopters' ambition is 15% of the market. My personal opinion is not so optimistic. I cannot predict the market share within the next one, two or three years. You can say only that we are doing everything to increase our proportion based on the latest increase in output of our plant."
Bugakov says Kazan's output has doubled since 2006, but "there has been some reduction of output from Western companies". In practice that translates to a 2009 output of only 80 helicopters and a firm intention to hit "about 120 units" in each of 2010 and 2011, followed by a more ambitious plan for an annual output of 250 machines.
The plant is operating at capacity and desperate to grow its output. Bugakov says: "The Kazan plant spent significant amounts on scientific research of the existing products and development of the new ones. So less money has been spent on the modification of the facilities. Because of this our output is limited and we cannot dramatically increase our rate.
"We cannot even do a 10% or 15% increase and because of this we are able to accept orders for 2011 only. At present, the major task of the management is to modernise the production facilities to be able to increase production."
There are initial signs of that process getting under way in the shape of new five-axis, multifunction machine tools from Mazak of Japan. By the end of this year around a dozen Mazak Variaxis, Nexus and Vortex models will be in place, with another 11 planned for 2010-11.
Bugakov says: "The plan is to bring production up to 250 units a year. Potentially, the plant can produce big quantities. The toughest challenge is machinery. We are buying the most sophisticated of machines from Germany and Japan and plan to add a big inventory. We are also buying robots and a deep modification of the paintshop, which will also involve the latest [Akzo-Nobel] technologies."
Just how quickly and deeply all this modernisation can be achieved depends on finance, which in Kazan's case comes substantially from its own revenue stream as well as the federal government.
Bugakov explains: "There is a programme for modernisation of the plant based on optimistic and pessimistic scenarios. The situation will drift between those two scenarios."
Overall, Kazan is looking for around Rb7 billion ($250 million). The optimistic scenario, which looks likely, envisages as much as two-thirds of that coming from the federal government, partly driven by a recently approved additional sum for defence industries, and the rest being funded out of a continuing profit stream at the plant. At the pessimistic end the investment would be only about Rb2 billion, but in any case the result should be a 50% increase in output by the end of next year.
"But between optimistic and pessimistic the most important thing is the scale of sales," says Bugakov. "If you are not able to sell anything then nothing can be done."
At RH, Shibitov sympathises, saying: "At the plants the sources of funding include their own financial resources as well as funding from the state. Unfortunately, the helicopter industry support from the government is less than for the [conventional] aircraft industry.
"On the other hand it makes us rely on our own possibilities. So now our money is our own resources or loans and investments. The current market does not help. But even in these financial conditions we are not changing our goals or lowering our aims in terms of technical development."
RH recently sent a delegation to Kazan to examine the plant's work in reducing costs and increasing efficiency with a view to implementing the techniques in other plants.
Ultimately, however, the Russian industry's future depends on its ability to field a competitive product line-up, and for Kazan the devil is firmly buried in the detail.
Demand for the Mi-17 is steady and marketing director Valery Pashko says the tactic is to "market the aircraft's record". That means pointing to the affordable type's reputation for being simple to operate and maintain, and its widespread acceptance in active theatres such as Afghanistan and Iraq. Incremental modernisation, including a glass cockpit, is hoped to add another 10 years to production.
Mi-17 shells are built at a subsidiary factory in Kazan and transported to the main plant, where they are assembled, equipped and finished according to customer specifications. During Flight International's visit at least 13 aircraft were in final assembly, two in the paintshop, and more than 20 at the flight-test centre being prepared for delivery either under their own power or by freighter from Kazan airport. The company employs 7,000 people.
In the longer term, Kazan's future depends on the 3t, nine-passenger Ansat helicopter and the Mi-38 powered by Pratt & Whitney Canada as a Westernised follow-on to the Mi-17, priced at $15-17 million. The Aktai very light machine is also on the agenda.
Most important is the Ansat. This was given type certification in 2004, but a fatal accident in South Korea in 2006 had disastrous effects on the approval process, and the use of a fly-by-wire control system has added to the difficulty of obtaining final Russian certification.
© Kazan Helicopters
Ansat orders have been secured and 26 completed or partially completed
Nevertheless, the aircraft has attracted significant interest in Russia and abroad - particularly in South Korea, where the possibility of fuselage construction of the aircraft is being discussed. Other orders have been secured in Laos, Kazakhstan and Russia, and 26 examples have been completed or partially completed.
Bugakov says: "We still have to finalise some problems with certification of this machine. It is a fly-by-wire civilian design and because of this the register of the Russian Federation has raised questions because they have so little of experience with civilian helicopters.
"But we are expecting that within a few months we will finalise this problem and then increase production eventually to 40 a year."
A further problem, however, is that ongoing revisions to US Federal Aviation Administration Part 29 certification regulations are being incorporated into the Russian code. That uncertainty is expected to contribute to an additional delay.
SIMPLICITY AND TECHNOLOGY
Bugakov is optimistic about prospects for the type, which he believes captures the twin attributes of simplicity and optimal technology. He says: "From the beginning we did not plan to make it ultra-modern and ultra-sophisticated. We absolutely understand that with this product we cannot compete on the same level as Eurocopter and AgustaWestland.
"So there are simple technologies and design decisions which make for ease in operation. It is a workhorse, not a Mercedes. But the main rotor and control system, which provide the key performance of a helicopter, have the latest design technologies. Based on this approach, we are in a position to produce an inexpensive machine with simple operation."
An entirely different problem has recently tripped up the Mi-38 work. That is the possibility that US dual-use technology regulations would prevent the long-planned use of the P&WC PW127 engine on the type.
Bugakov says: "Due to political reasons P&WC, ceased their participation in this programme." But he adds, while declining to explain why, that Kazan has been given reason to believe the obstacle will soon be overcome.
He also holds out the promise of an announcement about a sub-2t helicopter based on Kazan's Aktai design in the near future.
The drive towards improved after-sales support is being largely conducted by RH. Shibitov says: "We want to get closer to operators, which means physically to create more technical services in more parts of the world.
"The other part of the strategy is a new philosophy, which is to understand our operators and react to their needs and requirements."
The first output of that thinking is the creation of a maintenance centre in Sudan, where more than 130 Russian helicopters operate, in partnership with SMT Engineering at the Safat aviation complex at Khartoum. A similar operation is proposed for South Africa.
Shibitov laments the effect of Russian legal bureaucracy on the agility of the support service, but stresses: "An effective and modern sales service should be 365/24 and spare parts supply should be not later than within three days of orders. It is not so easy due to our oppressive laws, but that is our next main goal."
Shibitov says the managing company is also overseeing work towards higher-speed helicopters, much as in the West. He suggests that the production of a conventionally configured helicopter with a cruise speed of 170-190kt (320-350km/h) is plausible within seven years. Anything faster, he thinks, will require a more radical design concept.