Russia: A Major Player or Not

1
Russia A Major Player or Not?

• Pravco
• September 2002

2
In 1970, Airbus Did Not Exist, Today They Have
Over 50 Market Share

• Who will be the next Airbus?
• The manufacturers from Russia, China and India?

3
Is there a market for RussianDesigned and
ManufacturedCommercial Aircraft?
4
Why would the World Airlines purchase a Russian
Aircraft?

• Pricing is a third to half of the western
  aircraft.
• Russian aircraft use western engine and avionic
  packages.
• Newly Emerging Markets and western freight
  carriers will be the first purchasers.
• Russian aircraft are in the process of receiving
  FAA and JAA certifications.

5
Russian Commercial Aircraft Programs and
Production

• New Programs
• RRJ Sukhoi/Boeing
• Be-200 Beriev
• Tu-334 Tupolev
• An-148 Antonov
• MTR- Ilyushin/HAL
• Existing Programs
• AN-74 Antonov
• Il-96 Ilyushin
• Tu-204 Tupolev
• Tu-214 Tupolev

• Production Facilities
• Aviastar -Tu-204
• Irkutsk - BE-200
• Kazan -Tu-214
• Kharkov An-74
• Kharkov -An-148
• Mig/Aviant -Tu-334
• Novosibirsk -RRJ
• Voronezh -Il-96

6
RRJ Sukhoi 55-95 Passenger
7
Russian Regional JetSukhoi/Boeing/Ilyushin

• Three models- RRJ55, RRJ75 and RRJ95
• Sukhoi is the design project leader
• Ilyushin will provide Russian civil certification
  
• Boeing will provide marketing, leasing, and
  assistance in design and FAA certification
• Novosibirsk is the probable production site
• Pricing is targeted to be 20 lower than western
  manufacturers

8
Beriev BE-200 Waterbomber
9
Be-200/Irkutsk

• Two versions
• Waterbomber (first deliveries in Russia)
• Passenger (65 seater).
• First serial production units in assembly
• Currently being manually assembled.
• Scheduled to receive JAA certification by the end
  of 2003

10
Tupolev TU-334 100 Passenger
11
TU-334/MIG

• Rosaviakosmos will fund the certification
  testing.
• 100 passenger jet.
• Prototype in Russian certification testing.
• Co-production lines
• Mig (Moscow)
• Aviant (Ukraine)
• Selling price is 18 million with Russian engines.

12
Antonov An-148 80 Passenger
13
An-148/Kharkov

• Antonov Design Bureau in Kiev Ukraine
• Final assembly at Kharkov Aviation Plant
  (Ukraine)
• Final assembly at Ulan-Ude Production (Russia)
• Three prototypes are currently being built
• Selling price is between 15-20 million

14
MTR Multi Role TransportIlyushin Design Bureau
and Hindustan Aeronautics Ltd.
15
Multi Role Transport/HAL

• Two versions
• 100 passenger jet
• Military cargo
• Design and Production
• Ilyushin Design Bureau (Moscow) is designing the
  aircraft.
• India will invest 300 million into the program
  and sent up a production line at Hindustan
  Aeronautics Ltd.

16
Antonov An-74 50 Passenger
17
An-74 /Kharkov

• Kharkov plant in the Ukraine will be the final
  assembly site.
• Three versions-passenger, cargo, combi.
• Aeroflot recently purchased 25 aircraft through
  the Ilyushin Finance Group.
• Risk sharing joint venture between Antonov, Motor
  Sich, Ulan-Ude and Kharkov.

18
Ilyushin Il-96 280 Passenger
19
Il-96/Voronezh

• Produced at the Voronezh facility.
• Received FAA certification for the cargo version.
  
• Western engines and avionics (17 US suppliers)
• Low production rate (less 10 aircraft/year)
• Selling Price is 70 million (43 million US
  content)

20
Tupolev TU-204 170 Passenger
21
Tu-204/Aviastar

• Currently undergoing JAA certification which will
  be completed in 2003.
• Installed modern western machine tools for
  fuselage and wing production.
• Sirocco has recently invested in 280 million.
• China purchased 10 Tu-204.
• TNT cargo (Belgium) took delivery of three
  Tu-204s
• Selling price is 25 million.

22
Tupolev TU-214 -200 Passenger
23
Tu-214/Kazan

• Kazan is the production facility
• Tu-214 production
• Possible Airbus fuselage production
• Low serial production plans in the next year.
• Installed modern western machine tools for
  fuselage and wing production.
• Selling price range 25 to 30 million.

24
Russian Aircraft Certification

• Russian Regional Jet
• BE-200 Waterbomber
• Tu-204 passenger
• IL-96
• An-74
• An-148
• Tu-334

• FAA
• JAA
• JAA
• FAA
• Russian
• Russian
• Russian

Russian AP-25 Type certification is similar to
FAR Part 25
25
Comparison of Aircraft Models
26
Russian Alliances

• Airbus has partnered with Kaskol to manage 2.1
  billion in future Airbus subcontracting packages.
• Boeing has 300 Russian engineers in their Moscow
  Technical Center.
• Russia and China have signed an agreement for
  co-production of commercial aircraft.
• Other western aircraft manufacturers are
  exploring joint ventures in Russia.

27
Conclusions

• Russian commercial aircraft will gain worldwide
  acceptance with western certifications.
• Access to global maintenance centers will assist
  in the selling of Russian Commercial Aircraft.
• First out of country customers will be old
  Soviet bloc trading partners and western freight
  carriers.
• Western manufacturers will continue to expand
  their presence in Russia on a sub assembly level.

28
www.pravco.com

• Download-Ph.D. dissertation titled Globalization
  of Commercial Aircraft Production Implications
  for US Based Manufacturing Activity
• Download-paper titled The International
  Decentralization of US Commercial Aircraft
  Production Implications for US Employment and
  Trade-Canada-United States Trade Center

29
Research and Service

• - Canada-United States Trade Center, University
  at Buffalo, Occasional Paper No. 26, 2002, The
  International Decentralization of US Commercial
  Aircraft Production Implications for US
  Employment and Trade.
• - Office of Aerospace - International Trade
  Administration- U.S. Department of Commerce,
  briefings on Russian Commercial Aircraft
  Manufacturing and European Commercial Aircraft
  Production Processes, 2002
•  
• - Presidential Commission on the Future of the
  US Aerospace Industry, submitted research on
  industrial offsets and new global emerging
  aircraft programs, 2001.
•  
• - International Journal of Aerospace
  Management, October 2001. Globalization of
  Commercial Aircraft Production Implications to
  US Based Manufacturing Activity.

30
Research and Service

•  
• - House of Representatives Subcommittee on
  Aviation, submitted research on Global Aircraft
  Production, 2001
• - Speednews Aviation Conference, March 2001,
  Globalization of Commercial Aircraft Production
  Russian and Chinese Capabilities
•  
• - Presidential Offsets Commission, submitted
  research on Russian and Chinese Aircraft
  Manufacturing sector, 2000.
•  

31
Contact Information

• David J Pritchard Ph.D.
• 210 Sagewood Terrace
• Williamsville, NY 14221 USA
• Telephone/Telefax 716-632-5657 (USA)
• E-mail davidjpritchard_at_adelphia.net
• Website www.pravco.com