Regional Support.

Russian President Vladimir Putin attended MAKS 2005, held at the Zhukovsky flight test research center near Moscow Aug. 16-21, and viewed aircraft that, for the most part, his air force cannot afford. Also notable at the show was the larger presence of Western business jet manufacturers, whose Russian clients continue to register aircraft outside of the country. The ongoing preoccupation with industry restructuring was in evidence, as well.

The Russian government plans to allocate $300 million over the next three years to help finance development of Sukhoi's regional jet program.

Time ran out on Sukhoi's ambitions to ink a deal with Aeroflot for the Russian Regional Jet at the show, but the government used the occasion to announce its financial support for the project.

For the moment, there remain three regional jet contenders in Russia: the RRJ, the Tupolev Tu-334 and the Russian-Ukrainian Antonov An-148. The financial package underscores the government's support for the RRJ.

The Russian Finance Leasing Corp., one of two state-backed leasing companies, has also become a launch customer with a firm order for 10 RRJs. The planned order for 50 RRJs from Russian flag carrier Aeroflot, however, remains in discussion, says Victor Subbotin, Sukhoi's civil aircraft chief.

Sukhoi has already clinched a deal with a group of Russian banks totalling $100 million in loans backed by the state guaranties, and is in talks with the European Bank for Reconstruction and Development for more loans. Development of the aircraft is estimated to cost $670 million, not including the price of new SaM146 engine development, a joint effort of French Safran (Snecma) and Russian NPO Saturn, Subbotin says. Sukhoi already has invested some $70-80 million of its own funds in the program.

Italy's Alenia Aeronautica and India's Hindustan Aeronautics Ltd. (HAL) are discussing participation in RRJ development as minority risk-sharing partners.

Alenia and parent company Finmeccanica are in detailed negotiations over taking at least a 25% stake in the RRJ. While the two sides were looking to close a deal at the show, Giorgio Zappa, Finmeccanica's COO, says agreement will be reached no later than the end of September. This would represent a $200million investment in the program. The Italian company would provide composite materials expertise, and lead the aircraft's certification in the West.

By law, a foreign company cannot hold more than 25% of a Russian national program. There are also concerns over the lack of protection for investments. Both issues could be addressed as part of a government-to-government deal.

The project passed a critical design review stage this July, and some 90% of the design work is now complete. Sukhoi is planning to sign contracts with all systems suppliers by the end of September. First flight is planned for early 2007, and first delivery about a year later.

While Sukhoi has yet to announce the full go-ahead for the RRJ, its main competitor, the Antonov An-148 regional jet, was demonstrated for the first time at the show. Certification is underway, and launch customer KrasAir Airlines could receive the first aircraft in 2006. The airline has placed firm orders for 10 An-148-100s, plus options for five more, through the Iluyshin Finance Co., another Russian state-controlled leasing company.

Two flying prototypes have already been built in Kiev, while full production of the RRJ is to occur in Voronezh, at the VASO plant which builds the Ilyushin 11-96 widebodies. One recently completed 11-96-300 ordered by Cubana Airlines was also flown at the show.

Which of the regional jet projects will be the core civil element of the proposed unified aircraft company (OAK) has yet to be formally determined, as has the extent of government support for one or more of the projects, says Valery Bezverkhny, president of the organizational board of the OAK (known as Non-Commercial Partnership OAK) (see p. 36).

Bezverkhny, also first vice president of Irkut, says the board will support the RRJ, and by the end of next month, the future of the An-148 and the 100-seat Tu-334 should also be known. "We will not stop the production of any of them, but we should decide if and how we are going to compete with them," he says.

Another newcomer in the Russian regional aircraft market is the Antonov An-140 turboprop, which is license manufactured by the Aviacor plant in Samara. The 52-seat An-140 is also in serial production at the Kharkov state aircraft manufacturing association and in Iran. Production of the An-140 in Russia will enhance sales to local airlines, manufacturers from both countries believe. Thus far, 14 aircraft have been manufactured, none of them operated by Russian carriers.

The Russian-made An-140 had its first flight on Aug. 2, and the aircraft will soon be delivered to the first customer, Yakutia Airlines, based in the Russian Far East. The airline is also expecting to receive two more turboprops, while another customer, Dalavia, has ordered six An-140s. The manufacturer has started production of five aircraft, and plans to turn out 10 aircraft annually by 2007-08.

One more turboprop exhibited at the show was the Ilyushin I1-114-100, being manufactured at the Tashkent plant (TAPO) in Uzbekistan. The manufacturer is also offering a version of the 11-114, powered by Pratt & Whitney PW-127H engines and equipped with Rockwell Collins avionics instead of Russian Klimov TV7-117SM engines and domestically produced avionics.

TAPO and Rockwell Collins signed an agreement at the show on the avionics package delivery. Work on the prototype is scheduled to begin in November, and the aircraft will be delivered to the launch customer, Uzbekistan Airlines, next year.

PHOTO (COLOR): The Antonov An-148 was on display at MAKS, unlike its yet-to-be-built archrival, the Sukhoi Russian Regional Jet. Which design will eventually prosper has yet to be decided.

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By Alexey Komarov, ZHUKOVSKY; Douglas Barrie, ZHUKOVSKY and Andy Nativi, ZHUKOVSKY