Russia needs to coordinate aircraft production with airlines’ plans and capabilities – Rostec CEO
MOSCOW. Nov 12 (Interfax) – The comprehensive program for the development of Russia’s aircraft industry (KPGA), the current version of which calls for building 994 civilian aircraft by 2030, must be revised in line with the plans and capabilities of airlines, the head of Russian state corporation Rostec, Sergei Chemezov told Interfax.
“Today, if we’re talking about reviewing the KPGA, relevant agencies must analyze the outlook for changes in passenger traffic and determine airlines’ actual needs – how many planes they’ll be prepared to buy in what year. In other words, the program must be harmonized with the plans and capabilities of carriers,” Chemezov said.
He said the program was drawn up “at a difficult time,” when there was no clear understanding of how the situation in the airline industry would develop going forward amid sanctions, and what would happen with foreign aircraft, their servicing and components. “Urgent actions were needed, so the maximum objectives on tight schedules were set for aircraft manufacturers,” Chemezov said.
However, in future Russian airlines will need “even more planes [than factored into the program], as the objective is to ensure complete sovereignty in civil aviation.”
“It’s another matter that demand is no longer as acute at the moment. We managed to work out servicing of the foreign fleet, planes continue to fly. Fears that everything will come to a standstill tomorrow have passed. This means that the process of replacing foreign planes with domestic ones should be smoother and more gradual, as service life is depleted,” Chemezov said.
Newspaper Kommersant reported earlier this year that plans for aircraft production targeted in the KPGA might be scaled back. Consultants from Sberbank and Gazprombank recommended balancing “economically justified demand” and aircraft production plans following an audit of the plants of United Aircraft Corporation (UAC) , which is part of Rostec. Then UAC CEO Yury Slyusar, who stepped down earlier in November, told Interfax that plans would be revised in light of changes in the model of the airline industry.
Aircraft industry profitability
Russia needs to work on increasing the profitability of aircraft manufacturers, Chemezov said, commenting on an Industry and Trade Ministry proposal to revise aircraft leasing rates so that aircraft makers are not left in the red.
“I would not talk about concrete measures and figures right now. These issues need to be discussed comprehensively, together with our colleagues from the Industry and Trade Ministry and Transport Ministry. But on one thing I absolutely agree with [Industry Minister] Anton Andreyevich [Alikhanov], it is necessary to increase the profitability of deliveries for aircraft manufacturers so that they can spend earned funds not only on operations, but also invest in further growth and research and development,” Chemezov said.
The Industry Ministry is in favor of revising the terms of subsidies for aircraft leasing, which currently do not allow a profit to be generated for the aircraft industry, Alikhanov said earlier.
“In my view, a review will be needed of the terms for subsidizing leasing rates […] Because we cannot establish profit centers exclusively at commercial banks, at airlines, at cooperating suppliers who supply materials, raw materials, components for the aircraft industry, while our aircraft industry is constantly somewhere in the red and we’re constantly running and looking for a source to cover the difference in price,” the minister said.