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20 Aug, 2009 06:30

Sukhoi leads the way on MAKS 2009 deals

Deals have been thin on the ground at the MAKS air show near Moscow, with Military planes stealing the show, while civil aircraft production needs state support and foreign technology.

Sukhoi is the star of the show this year. It signed a $2.5 billion contract with Russia's Defense ministry for 64 fighter jets. It got a hundred million dollar loan from state development bank VEB – and is getting the same amount, to boost its capital, from the federal budget.

Russia’s Prime minister said the state will be only supporting truly competitive companies that are capable of making money on the market. It suggests the priority is not future projects but products which are made and sold now. And this is mainly Russia’s traditionally strong military aircraft sector.

Sukhoi’s multi-billion dollar contract to supply Russia’s military, could generate orders for other aircraft and the components industry according to Aleksandr Mikheev, Deputy Managing Director at Rosoboronexport.

”This contract will give an impetus not only to Sukhoi and its suppliers, but to the whole range of military-transport aviation. For MIG producers, it could boost development of many companies related to combat aviation.”

Arms exporters say military sales remain the "tried-and-trusted money-maker" while sales of commercial aircraft struggle to get airborne.  The United Aircraft Corporation, created to revive civil aircraft manufacturing, has instead been selling Soviet era planes at a loss, to get them off the books. It now owes nearly $4 billion to creditors.

Reuben Johnson, analyst at Aviation Week says the only way Russian civilian plane makers can catch up with global leaders is to borrow technology from abroad.

”They should really consider licensed building aircraft from other countries. Like theres this plan to build this MS 21 civil aircraft, which would be larger than the superjet. And by the time they develop this aircraft and they test it and they certify it, and its ready, it’ll be too late. The window will be closed. So they need to talk to somebody like Embraer, in Brazil about building other people’s aircraft in this part of the world.”

The first and the only Russian civil aircraft built since the collapse of the Soviet Union, the Sukhoi Superjet 100, looks set for success. The joint venture of Russian, Italian, French and Germany engineers expects 150 firm orders by the end of the year.