Coming to grips with Russian aviation

With Russia´s Aeroflot ordering 8 passenger jets from Boeing and Sukhoi's new Superjet seeing orders from Indonesia and Italy at Le Bourget airshow, Business RT talked to Grigory Birg, analyst at Investcafe, about Russian aviation and its prospects.

­RT:   Let's start with Russian aircraft manufacturing. Is Sukhoi the only bright spot?

GB: “Well, one could say that, because despite a lot of talk from the government and a lot of support for the aircraft industry, not much success unfortunately has been made in that space.”

RT:  Prime Minister Putin recently said he wanted Russian firms to be able to compete with the global giants like Boeing and Airbus. Is that a reasonable ambition?

GB: “Well, I do think that is a reasonable ambition long term, but as I’ve said Russian passenger aircraft manufacturers have not been successful in competing with international majors, such as Airbus and Boeing.”

RT:  And what do you think they need to do in order to be able to compete?

GB:  “Well better quality and established contacts, and I think Russia’s reputation as a reputable manufacturer of military aircraft will stand to our credit.”

RT:  What of the Sukhoi Superjet, is it seeing the kind of demand that was expected?

GB:  “Well, indeed we have seen over 600 aircraft ordered from Sukhoi Superjet, and this apparent success is largely due to the reputation of the Mr Pogosyan, at the time the head of Sukhoi Corporation, and also, but out of those over 600 aircraft only 2 have been supplied.  So maybe in time with further modifications, it can withstand competition from international majors such as Canada’s Bombardier, and Brazil’s Embraer, who manufacture aircraft similar specification.”

RT:  Turning to Aeroflot now, which has been shopping in Paris. It's chosen to do another deal with Boeing. Is it turning its back on Airbus, which has always provided most of its fleet?

GB:“Well I am inclined to think it is an attempt to diversify its suppliers and I don’t think it is a radical change of aircraft supplier for Aeroflot.  It is an international practice for most large leading airlines and I think this is what we are seeing.”

RT:  So you don’t think they are turning their back on Airbus?

GB: “It is a necessity for large airlines to diversify its fleet, so that they can adapt to the number of routes and geography of routes and the volume of passengers, so they can optimize their cost structure and in the end it will benefit the passenger.”