Civil Aviation
The lack of anti-sanction subsidies in the amount of 100 billion rubles will apparently become a much bigger problem for the industry in 2023. This year for carriers in comparison with the previous one will be more difficult. Now there is a feeling that it is not necessary to count on a subsidy of 100 billion. This factor is more painful for the industry than a partial revision of program No. 1242. If funding for flights to the Far East were cut, there would be outrage. By early 2022 Russia’s civil aviation industry was at risk of collapsing under the weight of Western sanctions over the invasion of Ukraine. Despite billions of dollars pumped into the sector with much fanfare, there’s been little to show for it -- and reliance on Western planes, technology, and spare parts remains sky high. “UAC became a highly effective tool for consuming state budget funds” and has turned “into almost a laundering firm,” Igor Semenchenko, a former top adviser to Russia’s upper parliament chamber, the Federation Council wrote in a November 2020 article.
Western-made planes, including Boeing and Airbus, accounted for about 80 percent of Russia’s fleet at the start of the year, according to Cirium, an aviation data and analytics firm. It is a larger proportion than when Putin first came to office. Many of those planes will be grounded in the coming months after Western nations banned the export of aviation technology, including spare parts, to Russia following its invasion of Ukraine on 24 February 2022.
Anton Gerashchenko reported Russian civil aviation is on the verge of collapse. He claimed the Defence Intelligence of Ukraine conducted a cyber operation against Rosaviation and obtained classified documents of the Russian Ministry of Transport. The intelligence managed to find out that:
- In January 2023, 185 air accidents were registered in Russian civil aviation. About a third of them were classified as incidents of varying levels of danger. The leader here was the Russian short-haul airplane "Dry superjet" - 34 incidents.
- In the first 9 months of 2023, 150 cases of aircraft malfunctions were documented in Russia. In the same period in 2022, 50 such incidents were recorded. Thus, the increase in the danger of flying in Russia has tripled.
- Engines and landing gear, as well as other important elements such as hydraulic systems, flaps, and software, remain the most vulnerable areas of Russian aviation.
- Russia has serious difficulties with the maintenance of high-flying aircraft. Due to the lack of capacity and specialists, Moscow is trying to reorient aircraft maintenance to Iran, where the relevant work is carried out "artisanally" - without appropriate certification.
- As of March 2022, Russia had about 820 foreign-made civilian aircraft. And if at that time only up to 10% of them had undergone uncertified repairs using off-brand spare parts, now almost 70% of the fleet has been put through such "service".
- The acute shortage of spare parts led to the so-called "aviation cannibalism" in Russia, when some aircraft are dismantled to repair others. According to the available data, by mid-2023, more than 35% of the aircraft in Russia were "cannibalized".
- Most Soviet An-2 aircraft are currently unable to get off the ground because their engines were manufactured in Poland, but their supply has been suspended due to sanctions.
- In January 2023 alone, 19 different malfunctions were recorded among the 220 Airbus aircraft in Russia. In particular, 17 cases of smoke were recorded in 9 aircraft used by Aeroflot.
- Out of 230 Boeing aircraft used in Russia, 33 technical failures of various aircraft systems were recorded.
- Every seventh Brazilian Embraer failed to withstand the conditions of Russian exploitation, and there are 21 of them in Russia.
After plowing more than $3 billion into the project, UAC had yet to deliver a single MS-21 to customers. It had promised to transfer four in 2022 to the state-controlled airline Rossiya, but that was in doubt due to the sanctions. Mass production at a profitable level is still at least five years away. As for the SSJ-100, two deadly crashes -- including one on a promotional trip to Asia -- and a persistent lack of spare parts have sapped domestic and international interest. As of mid-2021, there were only 155 SSJ-100s in operation, according to UAC CEO Yury Slyusar. The demand stemmed largely from government pressure on Russian airlines to buy them.
The maximum that can be obtained from the aircraft industry is 10 aircraft per year, and this is very small. Currently, there were about 500 aircraft on lease in the Russian Federation, more than 700 of them in total. And these leased vessels would soon stop, as they will be left without spare parts. "For 30 years, the aircraft industry had been practically destroyed. We have no capacities, no personnel, we should, in fact, talk about the reindustrialization of the country. It is necessary to revive absolutely everything,” one observer concluded.
The civilian segment, as Vice-Premier Sergei Ivanov has put it, was “in great trouble”. In 2005 only 8 civilian aircraft were built in Russia, the European Airbus producing 300 a year, the American Boeing – 290. During the Cold War 70% of the output of the ten major airframe design bureaux and the 20 major production factories was for military needs. However, the enormous slashing of military budgets saw this market fade into insignificance; the remaining 30% was civil, for Aeroflot and some foreign airlines, and represented approximately 100+ jet and turboprop airliners and airfreighters per year.
In the mid-1980s, the Soviet Union began to shift its traditional military focus to developing new civil aircraft. These new civil programs were intended to upgrade the domestic civil air transportation network, generate hard currency through products for export, and convert defense production facilities and employment to civil ventures. However, after the dissolution of the Soviet Union, the Russian civil aircraft industry nearly collapsed.
Before 1992, the military and civil aviation industries in the former Soviet Union were wholly state owned and strictly regulated. Design bureaus were separate entities from serial production facilities where aircraft were mass produced. The government decided which LCA designs would go forward, provided funding for the entire development and production process, and dictated how many aircraft would be produced annually. Moreover, major components, such as engines, were selected by design bureaus without competitive bidding by suppliers. This system allowed for overcapacity in the manufacturing industry, did not provide incentives for technological and production process improvement, and did not foster design improvements, leaving the industry ill prepared to function in a market-oriented manner.
The Russian large civil aircraft (LCA) industry devoted all available resources during the 1990s to develop a new generation of civil aircraft capable of competing on the global market with aircraft from The Boeing Co. (Boeing) and Airbus Industrie, G.I.E. (Airbus). Due to a number of factors, the most critical being a lack of capital and a corporate structure that is not market oriented, Russian producers are not expected to be in a position to secure global market share with their new generation aircraft in the next 10 years.
Following the collapse of the Soviet Union, air travel decreased sharply in the 1990s; in 2001 passenger kilometers were less than 40 percent of the 1990 total. Passenger numbers recovered gradually in the early 2000s, increasing by 4 percent between 2004 and 2005 to about 35 million. Since the early 1990's civil aircraft in Russia remained in deep crisis, primarily due to a significant reduction in the level of air travel and, accordingly, ordering airlines to reduce aircraft. According to the Ministry of Russian Federation, in Russia some 35 million people were flying each year, while in the Soviet Union aircraft were used about 100 million.
By 2006 most domestically produced airliners had been in service for more than 20 years, as the aviation industry's output remained very low and funds for replacement were lacking. Safety concerns about the aging fleet accelerated in 2005-6 as crashes increased significantly. Although plans call for streamlining the Russian airline industry under a single United Aircraft Building Corporation, foreign builders Airbus and Boeing are expected to provide most of Russia's new airliners in the ensuing decade, further damaging the domestic industry.
From 1992 to 2007, the number of Russian airports decreased from 1,302 to 351, primarily due to closure of small regional facilities. In 2006 Russia had 616 airports with paved runways, 51 of which had runways longer than 3,000 meters and 198, runways between 2,500 and 3,000 meters. Major international airports are located in Moscow, St. Petersburg, Rostov, Yekaterinburg, Novorossiysk, Krasnoyarsk, Irkutsk, Khabarovsk, and Magadan. In 2006 some 52 heliports also were in operation.
Despite an aging civil aviation fleet and use of outmoded avionics and engines, replenishment of the Russian fleet had not proceeded in the first fifteen years following the collapse of the Soviet Union. One of the few advantages of failing passenger traffic was that the service lives of aircraft in current service lasted longer. Thus, aircraft that could have been expected to run out of hours in the 1990s remained in service years longer. Even though the operating costs of a Russian airplane may be substantially more than those of a roughly similar capacity Western aircraft, the Russian aircraft came free of capital or leasing charges. Eventually, however, new planes were purchased, and these purchases were largely of Western aircraft.
Despite a tremendous need to renew the Russian civil aviation fleet, deliveries by Russian manufacturers plunged, due in large part to the absence of financing and leasing mechanisms for the purchase of Russian aircraft. Whereas formerly the Russian industry was guaranteed a certain level of revenue from sales to the government-controlled Aeroflot, Russian aircraft must now compete with Western aircraft. Western aircraft are offered with more flexible financing and leasing options, whereas Russian manufacturers require up-front payment in full for their aircraft. To support leasing of Russian-manufactured aircraft, the Russian Government in August 2001 concluded deals with Ilyushin Finance and Finance Leasing Company (FLC).
Under these deals the Russian Government took a controlling interest in each company's aircraft leasing operations in exchange for an $80 million infusion of government money in Ilyushin's IL-96 project and $25 million in FLC's TU-214 project. In December 2003, the Russian government increased its ownership stake in each of the companies in the amount of almost 30 million dollars for Ilyushin Finance and almost 13 million dollars for FLC. By 2007 company Ilyushin Finance Co. (IFC) was a virtually monopoly on the market leasing deliveries of Russian aircraft. According to preliminary estimates, this year's assets amounted to about $ 1.12 billion.
On 20 January 2017 Russian Defense Minister Sergei Shoigu directed a study of the possibility of replacing used in military passenger aircraft Tu-154, Tu-134 and Il-62M in the new Russian analogues. The Ministry of Defense and enterprises of the United Aircraft Corporation were to agree on a "road map": determine which aircraft will be the first out of service, and to build a production schedule for the uniform loading of plants. To replace the Tu-134 the short-haul SSJ 100 can be used, and instead of the Il-62 and Tu-154 a long-range Tu-214 could be used. At the same time, according to sources, the minister instructed the Defense Ministry to upgrade the fleet, though without additional funds. The exact timing of execution of the order was not specified in the mandate.
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