Farnborough Air Show

Russian helicopter sector to get big funding boost

 - July 7, 2008, 6:52 AM

Russia’s helicopter business received a boost with an announcement by the country’s vice premier, Sergey Ivanov, that production rates for both civil and military models should be increased. Next January, the government is due to issue draft plans that will call for almost $6.4 billion of fresh investment in the industry through 2015, with half of the sum to come from the private sector.

The government’s goal is for Russia to secure a 15-percent share of global helicopter sales. To achieve this ambitious target, the country’s manufacturers will have to deliver between 450 and 500 helicopters each year with a total value of up to
$17 billion. This is almost four times the volume of production in 2007, when the industry built just 120 helicopters.

The program to grow Russia’s rotorcraft sector is planned to be implemented in
two stages. In the first stage, which started this year and will run through 2010, the
industry is to increase the production of existing helicopter types, modernize in-service aircraft, develop new models and get them into production, while gathering the expertise and technology to create new-generation rotorcraft.

During the second stage of the plan (2011-2015), the intention is to establish series production of the new-generation models, to complete the restructuring of the industry and to start developing advanced helicopters for the period after 2015. The Russian government has stated that the helicopter industry will be expected to be completely financially self-supporting after 2015.

According to Andrey Reus, director general of the Oboronprom United Industry Corp., the development program is realistic now that the country’s helicopter industry has been consolidated. Last year, the helicopter manufacturers that were merged under the Oboronprom umbrella collectively achieved revenues of almost $1.3 billion. The highest earners were Rostvertol ($304 million), Kazan Helicopters ($281 million) and the Ulan-Ude Aviation Plant ($235 million).

The companies in the Oboronprom group, which operate under the name Russian Helicopters, have enjoyed growth in both orders and deliveries in recent years, achieving an 11-percent increase in output last year. Their backlogs of orders extend into 2010.

Partnerships with foreign manufacturers could be another important element in Russia’s plans to take the industry to another level. In May, Oboronprom signed
an agreement to become the Russian distributor for AgustaWestland’s AW109 and AW139 helicopters. Under the terms of the deal, Oboronprom is expected to sell almost $700 million worth of aircraft over the next five years, with the target for the rest of this year being 10 helicopters with a value of almost $100 million.

Under a second stage of the new partnership, AgustaWestland and Oboronprom will establish a number of Russian service centers for the Italian company. During an envisioned third stage, the partners expect to establish a new Russian joint venture to manufacture AgustaWestland products under license for both domestic and export markets.

Also in May, Oboronprom signed an agreement with Pratt & Whitney Canada
to codevelop the PW127T/S engine for the new Mi-38 helicopter. The Russian group’s Ufa Motor-Building Association will handle much of the work for this program, including the assembly and testing of the engine. Kazan Helicopters will undertake series production of the Mi-38.

Pratt & Whitney Rus, a local Pratt & Whitney subsidiary in St. Petersburg, will supervise assembly of the PW-127T/S engine modules in Russia. The Russian Helicopters firms will provide components and, subsequently, technical support for operators.

Certification of the PW-127T/S engine in Russia is scheduled for 2011, and the Mi-38 is due to enter service during
the first quarter of 2012.

Further near-term plans at Oboronprom call for the establishment of joint ventures for maintenance of Russian helicopters in the growing markets of India and China. “It is necessary to create a clearly understandable system for maintenance of helicopters,” said Reus. Russia is also holding talks with Iran about launching licensed production of its helicopters in that country.

Russia once claimed a 30-percent share of the world market for helicopters, but recently has seen this slip substantially. Of some 50,000 helicopters in service across the globe, roughly 5,200 Russian-made models are in service today in more than 80 countries.