Domestic Orders and State Backing Boost Russia's UAC Group

 - August 9, 2021, 11:00 AM
The Russian government has signaled its ongoing support for the UAC group's new MC-21 airliner. (Photo: Vladimir Karnozov)

While Russia’s United Aircraft Corporation (UAC) might well have hoped last month’s MAKS air show in Moscow would bring anxiously awaited new sales of its MC-21 airliner, the company went home with no fresh ink in its order book. So, the intervention less than a week after the event by Prime Minister Mikhail Mishustin must have been especially welcome with a pledge of fresh government support for the new narrowbody.

Having jetted in from Moscow to visit the UAC’s Siberian factory in Irkutsk, Mishustin reassured company officials that President Vladimir Putin’s administration remained firmly behind the MC-21, which is now more than 500 hours into its flight test program. Additional government aid to sustain Russia’s challenger to the hegemony of Airbus and Boeing was high on the agenda, he pledged.

Referring to a July 20 meeting chaired by President Vladimir Putin, he made it clear that the Kremlin views the 150- to 200-seat MC-21 family as a key asset in Russia’s national aviation strategy. “We spoke in length about what we shall do to help our companies [win] sufficient orders for the whole of their product line...and to come to an agreement with the vendors so as to provide all necessary items for the manufacturing plants that assemble the main aircraft types. We have worked out the next few steps that shall be made in order to gear up production," the prime minister told executives at UAC and its Irkut division.

During his visit to Irkutsk, Mishustin viewed a freshly assembled MC-21-300, the first example with wings made completely from Russian composite materials. The aircraft underwent assembly on the eve of the MAKS show as part of a wider effort to make the Russian aerospace sector less dependent on imported hardware.

While Mishustin insisted that the MC-21 can effectively compete with its Western rivals, he seemingly decided to inspect the production line himself after the type’s sales campaign had slowed in the wake of the Covid pandemic and U.S.-based economic sanctions. The latter sanctions have proved to be a burden for Irkut and its parent groups UAC and Rostec, as well as for several other Russian companies involved in the aircraft’s production.

The sanctions have forced a number of U.S. and European vendors to withdraw from the MC-21 project. To help UAC resolve the problem, the Russian government has been introducing various measures to help local companies develop substitute components and equipment for imported items. According to UAC chief executive Yuri Slyusar, the company aims to produce 36 aircraft in 2025, rising to 72 units by 2027.

By comparison, two other Russian airliner programs have been doing markedly better of late. For instance, Sukhoi’s SSJ100 won a total of 58 new orders and commitments during the MAKS event. Rossiya, an affiliate of flag carrier Aeroflot signed for 15 of the 90-seater, with deliveries to be made from the PBS Leasing group portfolio before the end of this year.

Other new commitments for the SSJ100 include a leasing deal signed by low-cost carrier Red Wings for 25 aircraft to be delivered through the end of 2022. Rostov-based Azimuth Airlines signed an agreement with the manufacturer to increase its fleet from 15 to 25 SSJ100s by 2026, and Aeroflot subsidiary Aurora, which operates domestic services in the far east of the country, is to add eight aircraft between 2022 and 2024.

Aurora also recently agreed to buy 19 of the UAC group’s Ilyushin Il-114-300 twin turboprop regional airliners. Another Russian operator, Volgodskyoye Air Enterprise, plans to take three of the 60-seaters during 2023. Both of these transactions have been arranged by the government-backed State Transport Leasing Company, as further evidence of the Kremlin’s commitment to sustain the Russian aerospace sector and its desire to stimulate the expansion of the air transport network across the east of the vast country.

The latest -300 version of the Il-114 is powered by Russian-made Klimov TV7-117SM turboprops, which have replaced Canadian-made Pratt & Whitney PW127 engines. The first example of the aircraft flew during the MAKS show and the second production aircraft now undergoes assembly at UAC’s RAC MiG factory in Lukhovitsy.