Plan aimed at reducing 100-seater's price by $5 million emerges as first production aircraft begins test programme

Russia is studying a proposal to exempt the Tupolev Tu-334 regional jet from value added tax (VAT) and property tax to boost its sales, as the first production standard aircraft begins flight testing.

The proposed tax relief, which would extend to the first 100 aircraft produced, is aimed at reducing the 102-seat Tu-334's $18 million unit price. Tupolev and state-owned RSK MiG, which will manufacture all subsequent Tu-334s at its LAPIK plant near Moscow, hold letters of request for 170 aircraft, provided the price is reduced to $13 million.

Ukrainian manufacturers Aviant and ZMKB Progress/Motor Sich supply the wings and D-436T1 engines respectively for the Tu-334, and would benefit from the relief.

Production is expected to run to 250 units, and under the proposals the Russian government would forfeit about Rb27 billion ($900 million) of the Rb91 billion due in taxes and import duties. The second Tu-334 prototype, which is the first production-standard aircraft, flew for 40min from Aviant's Kiev plant on 22 November. A second flight was completed the same day. Flight-testing of the twinjet has been under way for several years, with the original prototype having first flown in 1999. The testing tempo has risen recently and Russian certification is expected soon.

Meanwhile, RSK MiG employees are petitioning the Russian government to restore Nikolai Nikitin as the company's general director and designer. It is widely reported that the new general director Valery Toryanin, who is a former Sukhoi deputy general director, was appointed by the government to forge a merger between Sukhoi and RSKMiG. The companies compete in international fighter markets and the Tu-334 rivals the Sukhoi-led Russian Regional Jet family.

Iran has confirmed interest in buying Tupolev Tu-204s, with the Iranian embassy in Moscow saying the government is to renew the country's civil fleet and that Tupolev could be the supplier. It has yet to select the Tu-204 version, however, with both the Aviadvigatel PS-90A and Rolls-Royce RB211-powered models being considered.

Source: Flight International