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UNITED NATIONAL AIRCRAFT MAKER POSSIBLE IN RUSSIA

RIA Novosti

MOSCOW, February 22 (RIA Novosti) - Russian Industry and Energy Minister Viktor Khristenko suggested a national united aircraft manufacturer be established to unite all Rusisan aircraft makers.

Speaking at a meeting of the presidium of the State Council, Mr. Khristenko said that the government must retain the controlling interest in the company and that the industry was ripe for consolidation that had already been conducted in other countries. Setting up one aircraft manufacturer is aimed at enabling Russia to retain its position on the global warplane market and penetrate the commercial plane market.

Mr. Khristenko also said that a united national aircraft company called for pooling the assets and operations, with the two processes, in his opinion, to run parallel.

The united aircraft maker will feature three tiers, the minister said. Tier I will be the parent company itself to select programs. Tier II will include combat, commercial and transport plane and unmanned aerial vehicle (UAV) production segments, with Tier III to include special plants.

Dwelling on the company's performance expected, Mr. Khristenko highlighted that the aggregate initial showing would total $2.5 billion with the airliner/warplane ratio standing at 30:70.

In his opinion, the company is to join the five world aircraft production majors, driving its aggregate earnings first to $6 billion and then $8 billion at the equal airliner/warplane ratio.

By 2018, the company's output will have totaled $14 billion, with the number of production facilities remaining the same and the workforce numbering 500,000 employees, Mr. Khristenko opined, adding that the annual governmental funding of the aircraft industry should be about $1.8 billion.

He emphasized that the governmental financing in 2005 grew fivefold over that in 2004. More money is now spent on funding and capitalization of leasing companies, a civil aviation federal program is to be adopted to cover, among other things, Il-96 aircraft export and after-sales support, loan guarantees for Sukhoi's RRJ program.

Viktor Khristenko stressed that boosting the Defense Ministry's financing of the aircraft industry should be discussed separately. He said that the subject was to be on the table at the Security Council in the context of the arms procurement program for 2006-2015.