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Weapons of Mass Destruction (WMD)

CONSOLIDATED AIRCRAFT COMPANY: PROS AND CONS

RIA Novosti

MOSCOW, March 29 (RIA Novosti) - Russia's aircraft-industry enterprises will soon become part of a consolidated aircraft corporation. President Vladimir Putin approved the consolidation some time ago, with sector representatives actively supporting the idea. However, experts admit that the consolidated aircraft corporation could destroy the national aircraft industry, Profil reported.

But Alexei Poveshchenko, adviser to Sukhoi's general director, hopes that this merger will help elevate the aircraft industry. Another influential industry representative noted that creating a consolidated corporation meant playing into the hands of private-company managers. The rather successful Irkut and Sukhoi aircraft producers have not prevented weaker entities from joining the consolidated aircraft corporation and experts see this as something strange. Ruslan Pukhov, director of the Center for Analyzing Strategies and Technologies, notes this undesirable trend. According to Pukhov, neither Tupolev, nor Ilyushin should join the consolidated aircraft corporation because these companies have already depleted their innovation potential.

In addition, the Russian aircraft industry will have a hard time winning a top spot on the global market. Boeing and Airbus already control 50 percent of this market, which has an annual volume of $50 billion. Independent expert Sergei Sokut believes that Russia can still carve out its niche inside other market segments, such as that of fighter jets.

The global fighter-jet market's annual volume is estimated at $12-14 billion. The same is true of air-force trainers ($1.5 billion), military-transport aircraft and special-purpose planes (up to $5 billion). Russia could also establish positions on the regional-airliner market (about $9 billion per year) with the help of new programs, such as the Sukhoi RRJ (Russian Regional Jet), Sokut added. However, the consolidated aircraft corporation is doomed to failure without $1-billion minimal state orders.

All unsuccessful enterprises must be shut down. However, a social explosion could take place, if tens of thousands of workers are laid off. And according to another analyst who asked to remain anonymous, this would spell trouble on the threshold of the 2008 presidential elections.



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