nudelhirsch
Posts: 1371
Joined: Sun Oct 12, 2003 6:20 am

Russian Aviation: One Big Player

Wed Feb 22, 2006 5:02 pm

According to t-online news the Russian prime Putin just signed a paper which will bundle the Russian airplane manufacturers in one government-owned company to fight against Boeing and Airbus...
Putana da Seatbeltz!
 
YukonTrader
Posts: 204
Joined: Fri May 20, 2005 8:23 pm

RE: Russian Aviation: One Big Player

Wed Feb 22, 2006 8:44 pm

Hi folks

after looking up the still somewhat sketchy information on Putin's latest coup, I still wonder whether this "bundling" will apply to the design bureaus, to the manufacturing plants, or to both? Historically, design and production was completely separate in Sovjet aviation, and so it still is in the CIS. Design is done by Antonov, Ilyushin, Tupolev, Yakovlev, MiG, Mil, Sukhoi etc. while mass production of the various designs is assigned to one or more of the many assembly plants all over the CIS once development at the design bureau is complete: Aircraft Factory (APO) Number xxx - often acronymed now after the city they are in, examples KAPO, VASO, MAPO, KnAAPO etc. A factory often builds designs from different bureaus over time or even parallely on adjacent production lines (e.g. VASO Voronezh used to build Il-86, Tu-144 and An-12, among other military types).

As the German article speaks of "all military and civilian airplane builders, except the helicopter builders", this integration imposed by the government seems at first glance to include the design bureaus. That does not convince me, to be honest:

Concern 1) In the light of the duration of the design process of any aircraft model - and the CIS industry is not faster than the world average in this area, to say it mildly - it will take at least 5-10 years until a new joined design is ready for market introduction. This seems to be a long-term approach to change the state of the industry, and the long development and certification phase of new CIS-built airliners is one of the factors limiting their success.

Concern 2) A joint marketing organisation including financing schemes for a potential buyer, a joint effort to set up a reliable, common source for spare parts, and joint maintenance, training, documentation and certification centers for those (fairly) new designs currently offered on the market would make much more sense to me. These are issues that need to be addressed anyways, in order for the bundling to work, and their implementation could produce results faster than a new, joint design (or family of designs?).

Concern 3) Also, given the pride of any engineer for "his" bureau and "his" designs, I silently wonder how enthusiastically a forced merger of several existing corps of engineers will be welcomed. If too many teams walked out, the entire re-shaping of the industry could be delayed further, namely until enough new engineers were trained to fill the vacancies. I agree, that is pure speculation, but anywhere on this planet, well trained specialists are among the most mobile people in the workforce, as they know they will find a new job...

Concern 4) I don't need to speculate where this drive of the current Russian administration to mix (and mess up) foreign policy and industrial policy will lead the Russian nation to. Isn't economic history full of examples of government-owned, bureaucratically administred colosses that ran into the ground, full steam ahead, throttle wide open and with a wide grin on the faces of the "management"...

Concern 5) What next, after the plane makers? Would you still invest in a privately owned Russian airline today?

If anyone sees any additional info clarifying this interesting thread, please let us know and keep us updated. Any member with ties to Russia, please keep your eyes and ears wide open, thanks in advance!

Cheers, Lukas
 
nudelhirsch
Posts: 1371
Joined: Sun Oct 12, 2003 6:20 am

RE: Russian Aviation: One Big Player

Thu Feb 23, 2006 5:09 am

Good points, though I sort of like the idea of merging design bureaus and also having different flexible plants. Probably this is not the most economical thing, but other companies (different technology...) like Mercedes look into more flexible plants as well, so that they can produce cars according to demand without one plant running extra hours and the other one on idle... Good approach. I am not sure though how this can really work with airplanes... Especially with Iljushin and Antonov deep in the heavy cargo market they are producing small quantities only, not a mass output like 320 or 737... The flexibility could be a huge deal there.

What we must not forget, Putin started this not for economical reasons (not entirely), he has become known for monopolizing a bunch of companies and bringing back government-owned business like in former times... He is not a big friend of market rules and privatization... A huge deal of that is probably also image. His pride dictates him to be far up in the market... I could though imagine a joint venture of maybe TU and some Chinese companies for markets up to the mid-range widebodies. The demand is there, also in Russia and Asia. Also the often cited Chinese or Russian RJ comes back to the game with that...

Quite questionable move to cancel private ownership, yet interesting to see what will happen to the industry in Russia...

Anybody any news on that? It was featured big time in T-Online yesterday but I can't find anything else.
T-Online is not exactly a quality news source (not very good research and thouroughness...) but so far I can't remember them making anything up or posting something too wary... So I guess there must be something to it...
Putana da Seatbeltz!
 
irelayer
Posts: 997
Joined: Wed Jul 06, 2005 4:34 pm

RE: Russian Aviation: One Big Player

Thu Feb 23, 2006 7:44 am

This is what I have been saying for years! If all of Russia's technical experience and expertise in civil aviation can be effectively combined into a single entity that handles design, production, marketing, and long-term support of aircraft I think it could eventually form a worthy competitor to Boeing and Airbus...

-IR
 
nudelhirsch
Posts: 1371
Joined: Sun Oct 12, 2003 6:20 am

RE: Russian Aviation: One Big Player

Thu Feb 23, 2006 8:18 am

Quoting IRelayer (Reply 3):
This is what I have been saying for years! If all of Russia's technical experience and expertise in civil aviation can be effectively combined into a single entity that handles design, production, marketing, and long-term support of aircraft I think it could eventually form a worthy competitor to Boeing and Airbus...

They are excellent in cargo markets, for example with IL76, AN124 and AN225. But can they compete with the efforts towards efficiency that A and B are just running?
Putana da Seatbeltz!
 
YukonTrader
Posts: 204
Joined: Fri May 20, 2005 8:23 pm

RE: Russian Aviation: One Big Player

Thu Feb 23, 2006 9:04 am

Quoting Nudelhirsch (Reply 4):
They are excellent in cargo markets, for example with IL76, AN124 and AN225. But can they compete with the efforts towards efficiency that A and B are just running?

Yeah, these are niche markets with no real contenders. You can't (yet) avoid chartering an An-124 if you need to fly outsized cargo for a reasonable price. The Il-76 however already has a noise problem, many Western airports only allow disaster relieve and government flights with Il-76 nowadays.

However, many of these cargo planes - or dual-use rather military transport / civilian cargo aircraft - are coming of age, and there definitely is a market waiting eagerly for an updated or all new design comparable to the Il-76.

Quoting IRelayer (Reply 3):
This is what I have been saying for years! If all of Russia's technical experience and expertise in civil aviation can be effectively combined into a single entity that handles design, production, marketing, and long-term support of aircraft I think it could eventually form a worthy competitor to Boeing and Airbus...

Agreed! But it might be a long, long road, longer than some officials in Russia might expect. While Airbus and Boeing compete and challenge each other over use of composites, supercritical wing profiles, fly-by-wire and IFE opportunities dor PAX, the Il-96 and Tu-204 still showcase a type of "classic" aeronautical engineering that I do associated with the 1970s (heavy, sturdy designs, ample power to get the weight into the air).

We shall see! Even under a "worst case" scenario in which the amalgamated CIS competitor failed to penetrate first world markets, there certainly remains at least a substantial market for bargain-priced new aircraft in rapidly growing second and third world countries. A well managed CIS aerospace industry should be able to tap into these markets - unless there is a huge supply of low-timed, cheap Western aircraft waiting in the desert for buyers and leasees (just observe how a growing number of B737 classic, A310, B767-200/-300, B747-200, DC-9-51, B757-200 etc. migrated to the CIS over the past few years, in addition to a couple of factory fresh B737NG and A320)...

Cheers, Lukas
 
SFO2SVO
Posts: 305
Joined: Thu Jan 29, 2004 4:56 pm

RE: Russian Aviation: One Big Player

Thu Feb 23, 2006 10:38 am

Well, Antonov is really Ukrainian design bureau, even though it is tightly integrated with Russia I do not think they will be part of the merger.

On the topic: I think the idea is to create Russian Airbus: single bureau supported (and possibly assisted in the beginning) by government. Let's just hope it will not turn into another LADA manufacturer "supported" by high customs dues on foreign cars.
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