A symbiotic relationship has developed between Russia and Iran which is offering clear benefits to both

Long isolated by US Government sanctions, Iran has emerged as a key market for the sale and lease of Russian aircraft. The Aeroplane Alliance, formed by a group of Russian aviation businessmen, has brought together eight leading Russian airlines, two overhaul facilities, a training centre and aircraft designers to ensure that an operation which centres on some Russian Tupolev Tu-154Ms and a smaller number of Yakovlev Yak-42s effectively answers Iran's airliner fleet requirements.

The Russians, in turn, will benefit by resolving a long-standing international problem of their own. Neither the sale nor lease of Russian aircraft has been easy on the world market, due mainly to a perception that the aircraft bring with them poor support in terms of maintenance and spare parts. High operating costs and a lack of internationally-recognised certification pose other complications.

Iran's airliner fleet problems stem from US governmental sanctions imposed in 1979, after Shah Reza Pahlavi was deposed and an Islamic Republic was declared. At the time, almost all Iran's aircraft came from Boeing out of the USA. The US embargo not only prevented the country from importing further aircraft, but also applied to engines, components and avionics. The US content of these items has prevented delivery of new aircraft since.

Despite obvious problems stemming from the embargo, Iran has continued to have a competent maintenance provider, and the Boeing aircraft in its service have stayed operational until earlier this year, when the last of Iran Air's 707s and one 727-100 were retired. Meanwhile, Airbus A300s and Fokker 100s were added to the fleet in the 1980s and early 1990s.

In 1979, Iran had a population of about 30 million. Since the change to a strict Islamic culture, the population has more than doubled, to almost 70 million today. This population increase, in turn, has led to air traffic growth, and created a need for additional aircraft.

Aeroflot Leasing began the first wet lease of Russian aircraft to Iran in 1992, and has two Tupolev Tu-154Ms operating there. Holding the biggest market share is the Aeroplane Alliance, with 15 Tu-154Ms and three Yak 42s. A smaller player is Tatneftleasing, with two Tu-154Ms.

Iran Air Tour (IAT) was also established in 1992 to augment Iran Air's capacity by acquiring aircraft on wet lease, and it adopted the Tu-154 as its principal aircraft. IAT was the first customer for what would become the Aeroplane Alliance when it was set up in 1995. IAT needed the capacity, but the Tu-154 did not meet all of Iran's needs, and the Alliance gave it the opportunity to look for alternatives.

Surplus aircraft

The first step was to select suitable Russian airlines with surplus aircraft that could be leased. As Russian traffic was declining, surplus capacity was not a problem, but the Alliance wanted airlines with fully-functioning aircraft, competent crews and adequate finance to ensure that their aircraft were well maintained. Eight airlines joined: Aerokuzbass, Bratsk Air Enterprise, Chita Avia, KMV, Kras Air, Omskavia, Samara and Sibir. All had Tu-154Ms in good condition and well maintained.

Almost all of the Alliance's leases involved aircraft and crews from these carriers. At first, each aircraft had to return to Russia for maintenance after every 300 flight hours as no local provider was available. But as the fleet built up to almost 30 aircraft, the Iranian aviation authority, the Civil Aviation Organisation - Flight Standards (CAO-FS), began to call for Iranian crews to operate the aircraft and for maintenance to be provided in Iran.

Early in 1997, the Aeroplane Alliance added two new members: VARZ400, a Tu-154 overhaul factory at Vnukovo airport in Moscow; and BASCO (Bykovo Aviation Services Co), a Yak-42 overhaul factory. Both factories agreed to work in Iran, and VARZ400 set up a subsidiary factory on Kish Island, a customs and duty-free Iranian island in the Gulf for which no visas are required. A corps of Russian engineers and technicians moved down to Kish, and soon 300h checks were being carried out there. Iranian engineers and technicians have now been trained on the Tu-154, and 600h and 1,200h checks have been added to the facility's services.

As each of these checks previously meant the aircraft were subjected to a four-hour flight to Moscow, sometimes with a technical problem, the cost savings and improved safety have been well received by lessors and leasees. VARZ400 is a service provider acceptable to all the Russian airlines, and it has built a stock of spares for the Iranian market, including a minimum of two spare engines plus several million dollars of other parts and components.

Market watching

BASCO, with only three or four Yak-42s serving in the country, has a team of line maintenance and minor repair specialists in Tehran, but continues to look closely at the market. An accident involving a Yak-40 leased from Armenia in May has created difficulties for the Yak-42 operation in Iran, but BASCO expects a solution to be found.

The CAO-FS has raised several other questions, including a requirement for English language cockpits, oxygen systems and an improved air ventilation system to cater for the country's summer weather, often with temperatures of 40°C (104°F) or more. The Aeroplane Alliance approached the Tupolev Design Bureau, and Alexander Shengardt, the Tu-154's chief designer, addressed the resolved the questions speedily. The CAO-FS says it is very satisfied with the work done to adapt theTu-154 to the country's needs both by Tupolev and VARZ400.

In 1992, Mahan Air, then a start-up carrier, bought two Tu-154Ms and two Il-76TDs from Egypt to become the first Iranian carrier to own Russian/Soviet-built aircraft. It recently sold these to Caspian Airlines. Caspian and Kish Air have also both purchased Tu-154Ms from VARZ400.

"The 154M is very suitable for Iran," says CAO-FS vice president Yudallah Khallili. "It comes at an affordable price; and, with seven years before it next needs a major overhaul, is proving to be an effective tool for our airlines. Its fuel burn is high, but aircraft registered in Iran purchase fuel in the country at about $60 per tonne - about a quarter of the international price - so that eases the problem.

"They are averaging over 180h service per month, and the average flight cycle is about 1h 18min. For that sector length, their utilisation is quite acceptable. These aircraft are carrying over 2 million of the country's annual total of 13 million passengers. Today, three airlines are flying them with Iranian crews, and, by early next year, all airlines will have to. All have oxygen systems, and six have Airborne Collision Avoidance System 2 and Reduced Vertical Separation Minimum equipment, which will be mandatory by 1 November."

The Aeroplane Alliance is led by Alexander Smolko, an aeronautical engineer who was one of Aeroflot Leasing's founders, and Andjelkovic Dragan, a former chief executive officer of the Yugoslavian airline Aviogenex. They have arranged for Iranian crews to receive type training and conversion at the Vnukovo Flight Training Centre, the former principal Aeroflot centre in Soviet times and still one of the major centres in Russia.

Attention to detail

Their attention to detail and determination to find answers has made the Iranian market possible not only for the Alliance but also for the other companies. The Kish Air and Caspian 154s benefit from Alliance support and maintenance, and from training of aircrews and engineering staff.

"Iran will remain a market for us for several years more," Smolko says, "but we will need to find new markets and directions if we are to stay in business. We are currently looking at new aircraft types, both Russian and Western, and at new maintenance possibilities. We are also looking at airline consultancy services for Russian airlines, possibly with a Western specialist company, and we think that there is definite potential for this.

"In the near future, we will begin a smaller Iranian-type operation in an African country, and help to fill a gap in that market. We also see some other prospects internationally, but we have to stay ahead of the market, with suitable aircraft, if we are to stay in business."

Source: Flight International