The aviation production crisis in the CIS is easing - but only for some
The past 10 years have been difficult for the aviation industry in Russia and the CIS. In other parts of the world, manufacturers have built up an impressive record of orders and deliveries of civil aircraft as military budgets have shrunk, but the CIS industry has been severely restrained by the pervasive post-Soviet era money problems.
Commercial civil aircraft manufacturers have suffered most. Production of some military aircraft has continued at a slower rate than before because of budget problems among the region's air forces, but has been sustained by revenue-generating demand from other countries. So, the factories producing versions of the versatile Sukhoi Su-27 Flanker and, to a lesser extent, the RSK MiG-29 Fulcrum, have survived. Helicopter factories have also fared well, with the Mil Mi-8/17 Hip and the Mi-26 Halo finding markets abroad. The Kamov Ka-32 Helix has also had some success.
But demand at home has been pitiful. The region's money problems have meant that any operator requiring a new aircraft has had no prospect of obtaining finance on the home market. Any money available to lenders has been placed in well-paying loans to the government. Financial institutions have had no need to lend money to risky sectors such as airlines - even if they are essential to the country's development.
The crisis has been compounded by a plentiful stock of ageing aircraft left over from Soviet times, and by a rapidly declining market. Passenger traffic in Russia fell by about 77% in the past decade and by even more in most of the other CIS countries.
The fall in demand has forced staff cuts in all production plants. Many workers are not being paid, often for 12 months. Salaries remain low; younger staff have had to find second jobs. Component suppliers - the manufacturers of undercarriages, electronics, avionics and instruments - have suffered badly, and many vital suppliers have been forced to close.
Even for the former Soviet Union's needs, it would be difficult to justify the continued operation of 23 factories manufacturing airframes, plus others building engines, avionics and components. Typically, Russian and former Soviet aircraft and engines are designed by design bureaux, which are named after their founders. Products that they design take the bureau's name - such as Antonov, Beriev, Ilyushin, Kamov, Mikoyan, Mil, Sukhoi, Tupolev and Yakovlev. Once the aircraft or engine has been successfully tested, the government then distributes the manufacturing among various factories.
The factories formed a major element of the industrial capability and, ideally, they could have been the source of a well-trained technical staff to build the modern industrialisation of Russia and its neighbours.
Russia's new president, Vladimir Putin, strongly supports the industry which he views as essential to the country's progress, and legislation to assist the industry is almost complete, including laws to encourage aircraft leasing.
But not all the plants can survive under modern market conditions in a design/manufacturing system borne of the former communist system and unlike any in the West.
Alexander Pukhov, Tupolev's chief designer of the Tu-144LL and all civil supersonic programmes, says: "When our costs were met by the state, there was no commercial need for close relations between the designers and the producers. Today that has changed, and although we receive some support from the budget, it is not adequate. Therefore, if we are to continue to monitor and improve our aircraft, it makes sense to develop closer ties with the production factories."
Pukhov, who is overseeing the unification of the Tupolev design bureau and production facility Aviastar, adds: "We expect to complete the union by the end of the year."
Taganrog Aviation (TAVIA) completed its last Tupolev Tu-142 Bear maritime reconnaissance aircraft more than five years ago. Since then, it has been preparing to build the new 100-passenger version of the Tu-334 airliner, but progress has been slow. In April, the sole, partially completed, airframe was removed to Moscow, where RSK will continue the work.
At present, TAVIA survives on its modification of Ilyushin Il-76 transports into A-50 airborne warning and control system (AWACS) aircraft. It has contracts with India and Israel Aircraft Industries (IAI), which is developing a version for China, but this work is unlikely to continue much longer - the USA has warned Israel that if it delivers the Il-76s to China, it will withdraw $20 billion in defence aid to Israel. TAVIA's assignment of the production of the Beriev Be-32K, a 17-passenger regional airliner, could attract business, but there has been no progress on that programme.
Other plants are also having difficulties. Smolensk and Orenburg, for example, are likely to be the first to close, unless the government provides a reason for them to say open.
Smolensk is where the Yakovlev Yak-40 and the early Yak-42s were built. It has been manufacturing small numbers of the elderly Yak-18T, a four-seat piston-engined tourer and trainer, and a slightly modernised version called the SM-94, to meet a small CIS market for Yak-18 replacements in the CIS. The last order for more than two Yak-18Ts was from one of the major commercial pilot training colleges three years ago. Smolensk has also built a few Technoavia SM-92 Finist utility aircraft, and produced the small number of Myasishchev M-55 Geofizika high-altitude research aircraft.
Orenburg has built a limited number of replicas of the Second World War Yak-3 fighter, anticipating a market yet to develop. This factory may produce the new Kamov Ka-226, a utility helicopter ordered by the Russian Ministry of Emergency Situations for fire-fighting and rescue duties.
The outlook for military aviation is more promising. Russia felt its interests were ignored in last year's Kosovo crisis, and has therefore begun to rebuild the VVS (military air forces). The first signal of these intentions was the commencement of payments last summer - for the first time in five years - to factories for aircraft required for delivery over the next three to four years. These include MiG-29s, several versions of the Su-27, and the first orders for the new Antonov An-70 transport.
Russia has also completed payment to the Kazan factory for the final production Tupolev Tu-160 Blackjack and has acquired eight more from the Ukraine, along with three Tu-95 Bear bombers, as part of a debt reduction scheme. Once the ex-Ukrainian aircraft are overhauled, the VVS will have 15 Tu-160s.
Today, most factories have sizeable stocks of completed or partially completed aircraft in storage on their premises. Usually, components sourced from other factories are not installed until a paying customer arrives with the cash up front. The Kazan factory has two Tupolev Tu-22M Backfires that could be completed quickly if the VVS provides the money. The fighter factories also have stock in hand - RSK MiG has a line of MiG-29s at its Lukhovitsi plant, and some two-seat trainers at Nizhnenovgorod. Although the aircraft has sold steadily, most recently finding an export market in Malaysia, production continued for some time even after Russia's budgets dried up.
Foreign sales have eased the financial strains for RSK compared with the other manufacturers. The Sokol factory at Nizhnenovgorod continues to build the MiG-31 Foxhound long-range fighter, although production has slowed. It is also offering upgrades for the many MiG-21 Fishbed operators, installing new avionics, instrumentation and armaments. It is also working with Yakovlev to prepare for the new Yak-130 advanced trainer, and with Myasishchev, with whom it produces the M-101 Gzhel single-engined turboprop utility aircraft.
Three factories are producing various versions of the Su-27 - a product enjoying steady sales and, apparently, prompt payment. The combination of capability and cost has helped Sukhoi to find markets, mainly in Asia, for its family. It also seems to have a competent management team and strong marketing. Recent export customers have included the air forces of Ethiopia, China, India, Indonesia and Vietnam.
A potential boost to the military aircraft industry could result from negotiations underway with India for 140 Su-30s, to be assembled in India with parts manufactured at Irkutsk.
Sukhoi has managed to achieve a measure of commercial unity by bringing together its design bureau and that of helicopter designer Kamov with a group of manufacturing plants. For a time, the group also included the amphibious aircraft specialist Beriev design bureau, but Beriev has left the group, although its aircraft will continue to be manufactured at AVPK Sukhoi factories. The new Be-200, a 64-passenger twinjet amphibian in the process of certification, is being made at Irkutsk. The new six-seat Be-103, an amphibian in the Piper Aztec category, is being built at Komsomolsk on the Pacific coast.
Sukhoi's ground attack fighter, the Su-25, is made at Ulan Ude. In Russia's recent conflict with Chechnya, the Frogfoot saw extensive service and brought orders to the Bashkortostan capital's factory.
Sukhoi, long one of Russia's major military design bureaux, began its acquaintance with the civil market by developing a range of aerobatic championship aircraft in the 1980s, which made it one of the first to bring hard currency into the industry. It has recently set up a civil aircraft division to offset any reductions in military spending. It is expected to fly its first civil airliner, the 20-passenger S-80, this summer, and preparations are under way to develop a production line at Komsomolsk. Sukhoi has announced it will work with the new US group, Alliance, to develop a range of 50 to 100-seat regional aircraft. If this goes ahead, production would be in the West.
Helicopters have also proved a worthwhile business for the Russians. The major design bureau, Mil, continues to sell the Mi-8/17 family, a large, twin-engined, turbine-powered helicopter capable of carrying up to 30 passengers, 4t loads or a variety of military equipment. Although the first example made its maiden flight in 1962, Mil continues to develop new versions. So far, around 7,060 have been produced, and the helicopter has been delivered to 57 countries. It is built in the Kazan helicopter factory, and in Ulan Ude. Since the Soviet Union collapsed, it has found new markets in South America, Africa and Asia.
Mil is also associated with Rosvertol, a factory in Rostov-on-Don, where the largest production helicopter, the Mi-26, is built. Capable of carrying a 20t payload, the Mi-26 - of which 10 have been exported to five countries - is used on a range of heavylift duties. Rosvertol also builds the attack Mi-38 and an updated all-weather version of the Mi-28 Havoc, the -28N.
Mil is sharing production of its new four-seat business piston-engined helicopter, the Mi-34, with another factory. Progress, more usually associated with Kamov helicopters, and based in Arseniev in Siberia, has begun the set-up work. Other Progress products are the Ka-50 and Ka-52 attack helicopters, and the Yakovlev Yak-55 aerobatic trainer.
The other Russian helicopter design bureau is Kamov, whose main industrial partner is a factory in Kumertau, where the military Ka-31 and the civil Ka-32s are built. These have begun to find export markets, with a few going to Canada and Switzerland, and some on lease in Papua New Guinea. Despite its relatively small size, the helicopter can lift payloads of up to 5t, and is used to fight fires in high-rise buildings in Russian cities.
For its latest design, the twin-turbine Ka-60 series, Kamov has taken the unusual step of assigning manufacture to the Lukhovitsi plant, one of the two RSK MiG factories. Looking like a bigger version of Eurocopter's Dauphin, the Ka-60 carries up to 14 passengers, and will be offered with Western engines for export. Lukhovitsi is also making the Ilyushin Il-103 light aircraft, and has set up a production line to build the Aeroprogress T-101 Gretch, a Cessna Caravan equivalent intended to replace the Antonov An-2 Colt utility and feeder liner.
Large transport factories
The factories manufacturing large transport aircraft have probably suffered most over the past decade. The end of the Cold War seemed to promise a rosy future for civil aviation, but this has not materialised, and the production lines filled with new airliners in the early 1990s still have the same airframes sitting there waiting for customers. In the past five years, fewer than 30 new jet airliners have been delivered from the major Russian factories in Voronezh, Kazan, Ulyanovsk, Samara and Saratov.
But now, for the first time in 10 years, prospects are starting to improve. Late in June, the government began paying attention to establishing a legal basis for aircraft leasing, and committed budget funds to enable a Russian leasing company to be created. At the same time, some regional governments began to face the question of funding their local airlines to maintain air services to their regions.
The first result of these moves has been a trickle of commitments from Russian airlines for new aircraft. Aeroflot has agreed to take six Il-96-300 widebodies, most of them already substantially completed on the VASO line at Voronezh. It has also signed letters of intent for 20 Tu-334 twinjets, powered by Rolls-Royce BR715 engines, from the RSK-MiG factory at Khodinka in Moscow - the first civil aircraft to be built there since the Il-18 line closed in the 1960s. Fifty Antonov An-140s, the new regional turboprop that will be built in the Aviacor factory in Samara, are required to establish a network of feeder services to the hub airports in its system.
The Il-96s will be the first aircraft to be funded by the newly formed leasing company, which has also agreed to fund the sole example of the Pratt & Whitney PW2337-powered Il-96T freighter for Aeroflot. Voronezh waited for five years for the $1 billion funding promised by the US Exim bank for the Il-96T and Il-96M passenger version. Now it does not believe the money will come, and has had to find an answer at home. The 20 Il-96Ms and Ts originally planned for Aeroflot are unlikely to be completed, but the other two -96T cargo aircraft, which are on the Il production line, should be finished.
KAPO-Kazan has long been regarded as the most capable producer in the industry. It has completed production of the Tu-160 and Tu-22M bombers, as well as the Il-62, although five of the latter remain to be sold. Now it has begun to build the Tu-214, a higher take-off weight, longer-range version of the Tu-204 twinjet. Supported by the government of Tatarstan, of which Kazan is the capital, it has recently gained certification and begun serious marketing. It secured commitments for two from Dalavia and 10 from a group of airlines led by Transaero, and this will allow it to deliver all the airframes in final assembly. It is setting up another assembly line to produce Tupolev's new 50-seat Tu-324 regional jet.
Aviastar, in Ulyanovsk, has been the prime producer of the Tu-204, building both the Aviadvigatel PS-90-powered -100 as well as the Westernised Rolls-Royce RB211-535E4-powered -120 version for Egyptian-owned leasing company Sirocco Aerospace. In 1995, the plant had about 25 Tu-204s in final assembly, and four have been delivered to Sirocco. Two were traded to engine manufacturer Perm Motors in exchange for engines, and have since been leased to two Russian airlines. Two others were sold.
Another of the Aviastar-built Tu-204s has been modified to become the first shortened, but longer-range Tu-234. This 160-seat model is due to make its first flight soon. An order from Transaero for 10, plus three for other customers in Russia and two more for Sirocco, should have taken care of the others. But it seems unlikely that Transaero will take 10 from both factories unless its group of associates grows.
Aviastar also builds the giant An-124 freighter, and in May delivered one to Volga Dnepr, its first to be delivered in four years. Two more are in final assembly, but there are no customers to date.
Aviacor, in Samara, has closed production of the ageing Tu-154 trijet, although it has enough parts to complete a further 10 aircraft. Now it is concentrating on getting ready for the An-70 propfan-powered transport for the Russian air force, and the An-140 regional turboprop. It had been setting up for the Tu-334, but a government decree late last year transferred the rights to MAPO MiG, and now Aviacor will manufacture only wingsets for it.
Saratov has about 10 Yak 42s in stock and final assembly. It has lost several opportunities for other work, and appears to be concentrating on producing agricultural tractors.
Novosibirsk's NAPO is producing the 27-seat An-38 turboprop, and has found a few customers for it in the remote eastern regions of Russia. Polyot, in Omsk, is producing a few single-turboprop An-3s, an updated version of the An-2 for local passenger services and agricultural work. It is also making the An-74.
Other factories in the CIS include:
· Aviant in Live, building the An-32, is capable of manufacturing the An-124 and is setting up lines for the An-70 and the Tu-334.
· KhAPO in Kharkov is the main producer of the An-74, and is building the An-140, of which the first production example was delivered in May.
· TAPO, in Tashkent, Uzbekistan's capital, produces all versions of the Il-76 freighter plus the Il-114 regional turboprop.
· The Georgian Aviation Industry - Tbilisi factory, has begun production of the as-yet uncertificated Yak-58 twin-tail piston-powered business aircraft.