The terms under which Tupolev Holding will absorb Kazan Aircraft Production Organisation (KAPO) have been "agreed in general", says Rosaviakosmos general director Yuri Koptev.

"In December we came to terms on issues that hampered merging," Koptev says, who adds that a formal merger agreement may be signed in January. In December, Koptev and Russian vice-premier Boris Alyeshin - who is responsible for Russia's defence industry - held negotiations with the Tatarstan government and KAPO management.

Under discussion was the involvement of Kazan in the Tu-334 102-seat regional jet project. It is understood that KAPO has been offered wing production and possibly final assembly, due to the Russian government's dissatisfaction with slow progress at RSK MiG's LAPIK factory on Tu-334 production, despite Rb1 billion ($34 million) in budgetary funds provided this year.

LAPIK has fallen six months behind schedule on completion of its first airframe. KAPO, however, is understood to have been asked to cancel the Tu-324/414 project.

"It is too long a product list, not financial issues, that retards civil aircraft production in Russia," says Alyeshin. He says 14 different medium-range airliners are under development.

This market sector will come under the control of a single corporation whose core would be formed by Ulyanovsk-based Aviastar and KAPO, says Alyeshin.

The aim of the merger is to streamline production to fewer types. "With a profit budget and investment tools in place, we [the Russian government] are now ready to create a unitary aviation corporation to be optimal in terms of production, material, labour and financial resources," says Alyeshin.

Source: Flight International