Budget for manufacturers to be doubled and credits for leasing companies introduced in bid to stimulate market

The Russian government has finalised a state-funded recovery plan for the country's aviation industry, which will use credits to leasing companies to stimulate the airline market.

New prime minister Mikhail Fradkov approved a plan devised by his predecessor Mikhail Kasyanov, under which the government expects to double its budget for Russian aircraft manufacturers, as part of a manufacturing and leasing plan for 2005-8.

The Soviet-era system of relying on government orders is being replaced by a state-sponsored aircraft leasing system, under which the government will be supporting the buyer, not manufacturer. Yuri Koptev, head of the energy ministry's aviation department, says that by acting as investment guarantor, the government hopes to spur the market for airliners.

"Saving the indigenous airliner manufacturing industry is a matter of the highest political and social importance," says Koptev.

The Russian airline market is recovering. The transport ministry forecasts a requirement for over 500 aircraft by 2010, including 164 long-haul and 146 regional airliners. With the ageing Soviet-era fleet in need of replacement, Koptev says traffic will exceed the fleet capacity by 2006-7 if no action is taken.

The plan covers the construction of 273 aircraft in 2005-8, focused primarily on production of the Antonov An-148 regional jet and the Ilyushin Il-96 widebody at the VASO plant; the Tupolev Tu-204 at Aviastar; and the Tu-214 and Tu-334 at KAPO in Kazan.

The project is worth Rb50 billion ($1.74 billion), of which the government plans to fund around 20%, with similar injections from private investors and the rest funded by airline deposits and commercial loans. Government funds will be provided to leasing companies in the form of state contribution into their capital bases.



Source: Flight International