Russia to overhaul aerospace sector - govt official
By Maria Golovnina
MOSCOW, Feb 10 (Reuters) - Russia plans to bring together its largest aircraft makers under a single company in the next two years to put an end to damaging squabbles within the ailing sector, a senior government official said on Tuesday.
Speaking at a news conference, Deputy Prime Minister Boris Alyoshin said the move was aimed at making Russia's aircraft manufacturers more competitive against global rivals such as Airbus and Boeing Co. .
"We knew that sooner or later we had to either give up aircraft-making altogether, or conquer international markets," said Alyoshin, who created the ambitious project.
"We have to compete against global giants... We have lost a lot in the past decade and now we have to recoup the losses."
Alyoshin said the holding company will unite Sukhoi, Mig, Ilyushin and Tupolev -- Russia's cash-strapped industry giants that have struggled to keep pace with world leaders.
Once the backbone of Soviet civil aeronautics and defence aviation, the four were largely devastated in the post-Soviet economic meltdown after the government radically cut the military budget in the early 1990s.
Under the new plan the parent company, which will remain in government hands, will map out a single market strategy to avoid legal disputes within the sector that have prevented the industry from recovering.
The parent company will also include privately-owned Irkut Corp., which has a licence to assemble Sukhoi jets.
"The creation of the holding will put an end to endless wars among our companies. You know how much they wrangle over everything... This is not healthy," Alyoshin said.
Ilyushin had a four-year dispute with flag carrier Aeroflot over the lease of long-haul airplanes which settled earlier this year.
The holding company, due to be set up gradually over the next two years and likely to become fully operational by 2007, will concentrate on making commercial aircraft, as well as on defence aviation and maintenance, Alyoshin said.
"It doesn't necessarily mean this new company will be like Boeing. But our methods and structure will be similar," Alyoshin said.
He said the industry, currently fully controlled by the government, will eventually open up to foreign cash.
"The government currently has a lot of assets in the aerospace sector. They are not for sale yet. We need a proper system first. And only then the door will open for foreign investors -- so that they know what they buying."