“Our goal is to help the Russian aircraft industry become sustainable”

The MAKS air show traditionally highlights the Russian aircraft industry’s new achievements. Deputy Minister of Industry and Trade told Show Observer about the government’s plans to help this critical industry further evolve.

— What goals are the government and your ministry setting before the national aircraft industry? What needs to be done in order to achieve them?

— A brief answer to your question would be this: the Russian aircraft manufacturers need to revise their industrial model, and the Ministry of Industry and Trade will be stimulating this process.

The current model of the national aircraft industry took many years to form, and resulted in most of the manufacturers rely on subsistence economy, meaning that they run a significant portion of the requisite conversion processes (from foundry operations to end-product manufacture) on their premises. With this model in place, the manufacturers require government funding in virtually every step of the manufacturing process – during the development, pre-production, series production, marketing, and operation phases. All this is too heavy a burden for the state.

Our goal is to help the Russian aircraft industry become sustainable, with only partial government funding. The ministry is prepared to assist the manufacturers along this route, and will welcome any initiatives aimed at the achievement of this goal.

We see that our integrated corporations need to gradually shed non-core and non-critical functions, they need to introduce structural changes and make serious investments in the development of their personnel potential. Russian aircraft manufacturers should build high-quality, internationally competitive products, they should demonstrate operating efficiency and a high level of manufacturing culture, and also generate the profits required for investing in the creation of new products.

— How is the government prepared to support the industry in the current complex economic and political situation?

— In the current situation, with cheap borrowings unavailable, it is our task to help not just the manufacturers but also the carriers, because these two markets are in fact the two sides of a single coin.

The government provides various forms of support at initial stages or if a manufacturer is experiencing financial difficulties. The most topical aspect of this work is currently the effort to top up the capital of United Aircraft Corporation and United Engine Corporation. Additional capitalization of State Transport Leasing Company should facilitate the development of regional air transport services using Russian-made aircraft.

A resolution was signed in July on subsidizing flight crew training programs for Russia’s newest aircraft types; we will shortly introduce a scheme for providing residual value guarantee obligations to lessors, thus launching the process of creating an aftermarket for aircraft, which Russia does not yet have.

— How will the planning cuts to budget spending affect the financing of programs to develop new aircraft?

— Despite the difficult economic situation and the reduction of funding, the aircraft industry has received the promised government support. The government program to develop the aircraft industry in 2013-2025 has undergone minimum revisions, and the financing targets for our key programs, those to create the Irkut MC-21 ailriner, the Aviadvigatel PD-14 engine, the Mil Mi-38 and Kamov Ka-62 helicopters have been fully preserved.

— Has Russia’s soured political relationship with the West affected Russian manufacturers’ cooperation with foreign partners?

— It has. Russia is actively seeking replacements to products previously sourced from abroad. Here at MAKS we are planning to demonstrate that in many instances we can supply advanced Russian-made aviation equipment and competitive components, both to our own manufacturers and to the West.

However, it would be totally wrong to say that all supplies to Russia have ceased. Cooperation at the level of major manufacturers and also in science continues as normal.

— How can the Russian aircraft industry benefit from greater cooperation with Chinese counterparts?

— For Russia, China is one of the key partners. China has a broad range of capabilities which are of particular value to the aircraft industry, including the ability to commit significant resources to long-term programs, a large domestic market, and a rich experience of rational manufacturing processes We, in turn, have a good aerospace design school, an experience in global cooperation, and a hefty portfolio of technological competences and solutions acquired in the past several years. I am convinced that if our corporations agree on the concepts of the future joint fixed- and rotary-wing aircraft projects, work out a marketing model for them, agree on the terms and conditions of cooperation and on the division of labor, the sharing of risks and projected profits, then we will be able to create competitive and popular products together.

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