Russia's Ulyanovsk regional authorities have revoked an agreement to lease land to produce the Viking Air Twin Otter Series 400 under licence, blaming the move on weak local demand for the twin-engined turboprop.

In 2010 Canada's Viking and its Moscow-based sales agent Vityaz Avia gained approval to build a manufacturing facility for the 19-seat aircraft - a modernised variant of the de Havilland Canada DHC-6 - in a special economic zone adjacent to local airframer, Aviastar.

As its resident, Vityaz would have benefited from substantial tax breaks granted by the government. The partners planned to start production this year, and invest around $15.5 million in the venture.

“Local demand [for Twin Otters] is not yet sufficient enough for the launch of serial production but is still there,” says administration director Denis Baryshnikov. “Hopefully, this scheme will come to fruition as the economic situation improves.”

Viking and Vityaz envisaged building up to 24 Series 400s a year at the site and producing parts for the aircraft locally.

Neither company was available for comment.

Fellow Canadian manufacturer Bombardier last year put on hold a potential deal with Rostec to build hundreds of Q400 twin-engined turboprop airliners in Ulyanovsk for the Russian market in a pact initially unveiled at the MAKS Moscow air show in 2013.

Source: Flight International