PDF Russian Aviation & Military Guide, 2017
Russian Aviation & Military Guide 03(10) Special Edition, 2017
Russian aircraft industry outlook

Russian aircraft industry outlook

United Aircraft Corporation increases share of its civil products

In early March the first meeting of the Aviation Collegium under the Government of the Russian Federation was held in Moscow. The Collegium is focused on overall coordination of efforts of government authorities and manufacturers to develop the Russian aircraft industry. Speaking at the meeting, Yuri Slyusar, President of the United Aircraft Corporation confirmed that Russia will be developing and manufacturing both military and civil aircraft. Meanwhile the share of its civil segment is to grow at an outperforming rate. Bringing to market new advanced civil aircraft along with traditionally successful combat airframes will make UAC a much bigger player in possession of wide range of innovative aviation products. Besides, according to Yuri Slyusar, now UAC is establishing a global after-sales maintenance system dedicated to servicing Russian civil aircraft.

UAC portrait
The United Aircraft Corporation of Russia (UAC), which under one company represents the most well-known Russian aviation brands such as Sukhoi, MiG, Tupolev, Yakovlev, Beriev and others, is today among the worlds biggest manufacturers and suppliers of aircraft. In December 2016 as part of an effort to expand foreign presence UAC was given a military-dedicated foreign trade license that allows to directly render services to foreign customers. The military-dedicated foreign trade license has been issued by Federal Service for Military and Technical cooperation. This will help UAC improve maintenance and repairs of equipment previously delivered abroad, which includes all previously supplied Su, MiG, Il, Yak and Tu aircraft.

Due to the success of its products UACs revenues have been lately growing on average more than 20% per year. Sukhoi Superjet 100 civil airliners, Su-30 and MiG-29 fighters, Yak-130 operational trainers are among the most popular aircraft exported by UAC.

The document received by UAC is to much more simplify foreign market procedures, which is good news for present-day and future UACs partners worldwide.

Alongside with the right for direct maintenance and repairs of the equipment previously delivered abroad, the document also specifies UACs capabilities to update such equipment and train foreign personnel to maintain and repair UAC products. Besides, the license authorizes UAC to establish joint ventures abroad which can maintain and repair aircraft.

The license enables UAC to proceed to coordinated efforts in this area, develop a single enterprise after-sale service system based on current experience and ensure the most efficient activities at markets with several brands available.

The new capabilities confirm there is a steadily growing demand for UAC aircraft. Moreover, operational reliability and competitive prices become increasingly significant. In this regard there is a reasonable increase of export of Russian aircraft having better reliability, up-to-dateness and well-balanced prices both for airplanes and further maintenance. According to experts, it is Russian aircraft which in terms of life-cycle cost appear today as the most attractive in international markets.

UAC products include many aircraft which are proven international bestsellers. Thus, Su fighters exported by Russia number in the hundreds making these fighters come second and first worldwide. In 2011-2014s Su planes were the first in amount: in four years customers have received 139 aircraft, while Lockheed Martin delivered only 89 and Boeing delivered 60 planes.

UAC places big stakes on supplying fighter planes given that many countries plan to have their fighter fleets upgraded. Among the most world popular planes is the Yak-130 operational trainer which has been already delivered and is being delivered to a number of countries. This is a top-class aircraft. It can be upgraded as a light fighter or close support plane which is highly demanded by air forces in the world.

However, Russian aviation export is notable not only for military aircraft. In recent years good results have been shown by the civil segment for which UAC has been making big plans. Among Russian civil aircraft the new generation Sukhoi Superjet 100 regional aircraft is the most popular at foreign markets. The aircraft combines new aircraft engineering technologies, passenger comfort, significant economic advantages for airlines and proper environmental specifications.

The key advantage of the Sukhoi Superjet 100 is lower operational costs as compared to its competitors. Operational costs are minimized due to higher fuel efficiency and lower take-off weight. According independent data, its ownership cost is averagely 15-20% lower than the other similar class aircraft. The highly competitive lease rate supported by a state guarantee of residual value is also worth being taken into account.

The SSJ100, capable of carrying up to 98 passengers, is the first in its class aircraft featuring five-across seating, with big 32-inch seat pitch. Thanks to a combination of wider seats and higher cabin (over 2 meters) SSJ100 has more cabin space and bigger stowage bin capacity than such of competitors. The airplane has been built with the use of the latest design procedures and technologies by leading international manufacturers such as Snecma, Thales, Goodrich and Honeywell. One of the versions of the interior has been designed by Italian office Pininfarina. In February 2012 the aircraft was certified by the European Aviation Safety Agency (EASA).

At the same time UAC is working on creating a 150-210-seat MS-21 narrow-body aircraft family. Estimated volume of production is up to 72 aircraft per year. Today the backlog for these aircraft is 175 orders. There is also interest towards the future aircraft in foreign markets. We should sell internationally hundreds of aircraft. This is our goal in the civil segment, emphasized Yuri Slyusar.

Russia and Malaysia
Aviation relations between Russia and Malaysia have quite deep and multi-faceted history. It is enough to mention that in 2007 Russia supported the space flight of the first Malaysian cosmonaut Sheikh Muszaphar. In October 10, 2007 as a crew member aboard Soyuz TMA-11 spacecraft he went to the international space station and spent 11 days in space, which were so fateful for Malaysia.

Besides, let us recall that as early as in 1996 Malaysia purchased 18 MiG-29 fighter planes from Russia. Not later than seven years after the countries signed a contract under which Russia was to deliver to Royal Malaysian Royal Air Force 18 Su-30MKM planes totaling to about $900 million. Noteworthy is that the contract was signed while Russian President Vladimir Putin was visiting Kuala Lumpur.

In addition to just production and delivery under Su-30MKM deal Russia undertook training of pilots and maintenance personnel of the Royal Malaysian Air Force, which was conducted in Malaysia, to operate those latest fighter planes. Besides, the contract covered the delivery of armament and inventory required for the planes.

Su-30MKM has been modified to suit Malaysian specific requests and character of operations and climate. The plane has been based on well-known Su-30MKI used by the Indian Air Force since 2002. Chief Designer Alexander Barkovsky believes that Su-30MKM is another step in the development of the Su-30 platform. The Malaysian version has a number of distinctive features mostly related to avionics.

The ceremonial delivery of the first two serial Su-30MKM held in Irkutsk was attended by a substantial Malaysian delegation headed by Malaysian Royal Air Force commander-in-chief General Azizan Bin Ariffin. The first Su-30MKM were delivered to Malaysian Air Force airbase Gong Kedak in Kelantan. The ceremonial induction into service of Su-30MKM was held at the Subang airfield near Kuala Lumpur and was attended by Malaysian Vice Prime Minister and Defense Minister Najib Abdul Razak and Head of the Army General Paduk Abdul Aziz Zainal. So far all 18 Su-30MKM have been delivered. The aircraft are well regarded by Malaysian pilots.

There is also cooperation between our countries in civil aviation with quite a number of good examples. Thus, Malaysia takes an active interest in Russian medium haul MS-21 aircraft. The aircraft was unveiled last year. The dedicated works are being carried out as scheduled. The first flight is expected soon.

Malaysia is also familiar with unique Russian amphibian airplanes considered to be the most efficient in firefighting. In October 2015 two multi-purpose amphibious Be-200ChS aircraft were involved in fighting large forest fires in Kalimantan and Sumatra islands. The fires caused much smoke in Indonesia, Malaysia, Singapore, Thailand and Philippines.

Much attention in the Asia-Pacific region is also paid to the new Russian passenger Sukhoi Superjet 100 aircraft.

Increasing volume of SSJ100
According to UAC President Yuri Slyusar the Corporation has stable rate of mass production of the Sukhoi Superjet 100. There are plans to deliver not less than 30 aircraft every year to customers. Today about one hundred SSJ100s are being operated including those in a number of world regions, from South America to Southeast Asia.

Currently with available manufacturing capabilities UAC enterprises are capable of producing up to sixty Sukhoi Superjet 100 per year. The Russian aircraft sparkles profound interest in Southeast Asia and Latin America. Experts confirm that in the context of 70-100-seaters this aircraft is becoming the most attractive for many international airlines. When interviewed Yuri Slyusar says UAC is intended to focus on further development of the Sukhoi Superjet 100 aircraft family to offer customers a range of regional planes.

It is worth noting that today a business jet version of the SSJ100s is also available. As a result of a number of upgrades, including auxiliary fuel tanks installation and other engineering solutions the range of the business version of the SSJ100 is increased to about 8,000km-long nonstop flight.

BBy the way, last year two VIP versions of the Sukhoi SuperJet aircraft were delivered to the Royal Air Force of Thailand. The business version aircraft (Sukhoi Business Jet (SBJ)) are designed to carry country leaders and defense establishment of Thailand. The delivered SBJs are the first business jets of the company purchased by an Asia Pacific customer.
UAC has released an up-to-date forecast for civil aviation market development within the next 20 years. According to the forecast the volume of world air transport service will keep growing and annual growth rate account for 4.6% per year.

The leaders of the current growth rating are still the USA and China which have large domestic air transport market as well as UAE, UK and Germany whose airlines carry out the majority of international air transportation. Russia remains the country with high technology aviation and has the 7th rating position in terms of air transport service as of 2015 and growth of domestic passenger traffic is stable. Russian airlines have been adapting to changing economic conditions and finding mechanisms to optimize their activities.

All this helps us look to the future with cautious optimism and suppose that by 2020 the volume of Russian air transportation will have reached its pre-crisis level. Annual growth rate of national passenger traffic within the next 20 years is to be close to international rate and equal to 4.4%. br>
An important factor affecting on air transport service market is the reduction of oil prices. Within the period of 2014-2015 the lowest oil prices were in December 2015. Now there is stabilized 50-55$ per barrel price. Thanks to lower fuel price airlines can cut transportation costs and promote their growth. The latter will inevitably lead to increasing demand for new airplanes.

According to the forecast a demand for new aircraft within the period of 2016-2035 will account for over 41 thousand airframes. As a tradition narrow-body long-range aircraft with over 120 seats will enjoy the most popularity. The greatest overall demand for new aircraft is expected in Asia-Pacific region, mostly due to China. The next in importance will be traditional big markets of Europe and North America.
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