Sukhoi and Alliance Aircraft in jet programmes

Published: 6/13/2000

Sukhoi has signed an agreement with New Hampshire-based US startup Alliance Aircraft to participate in the $660m development of two new 70- and 90-seat regional jet programmes announced earlier this year and expected to be certified by 2003, designated the StarLiner SL-200 and SL-300. The programme also involves the future development of at least two other aircraft in the 30-50 seat segment. The agreement signed by Mikhail Pogosyan of Sukhoi and Earl Robinson, President of Alliance Aircraft and formerly President of Dornier, was unclear as to the exact nature of Sukhoi's involvement in the programme, but it is believed to involve the design of parts for the new aircraft and potentially their manufacture. The deal is due to be finalised over the next two to three months, according to Sukhoi. The signing of the deal comes a few weeks after Sukhoi, traditionally a military designer, registered a company specifically for the purpose of designing civil aircraft, Sukhoi Civil Aircraft, 100% owned by the Sukhoi Design Bureau. Currently the bureau has involvement in a number of civilian programmes, but according to the bureau, in order to attract foreign investment, it was necessary to split the military activities from the civilian, although they have not disclosed who the investors might be. Sukhoi's current civilian programmes will however, not migrate to the new company. According to Sukhoi, the sports and training aircraft will remain under Sukhoi Advanced Technologies, a subsidiary of the bureau, and the S-80 twin turboprop transport currently being prepared for flight testing will remain the responsibility of the joint Sukhoi and KnAPPO, the aircraft's manufacturer, development team. It seems likely therefore that the first manifestation of the new company in cooperation with Alliance Aircraft, will be along the lines of the agreement recently expanded, between Boeing and Ilyushin, involving the design and redesign work on a number of Boeing programmes including the 777 and the 767, by Ilyushin engineers and designers based in Boeing's Moscow office. Discussions on the new cooperation with Alliance, according to Andrei Ilyin, General Director of Sukhoi Civil Aircraft, began about a month a go, although other sources suggest that the discussions have been going on for a far longer period. Unveiled earlier this year, the SL-200 and SL-300 are designed to compete in the growing, but competitive regional jet market, priced in the range of $16.5-29m, as low-cost alternatives to the Bombardier, Fairchild Dornier and Embraer regional jet families. The new aircraft are likely to be powered by engines from the Rolls Royce Deutschland BR-700 series, the latter recently reaffirmed as the power plant for the Tu-334-120. The 100 seat Tu-334 and 50 seat Tu-234 currently constitute Russia's home-grown regional jet efforts form Tupolev and MiG. The lower cost of the aircraft is attributable to a compression of the development process according to Alliance, through use of a common wing and various systems to reduce the aircraft's complexity. These factors linked with industry overcapacity and commensurate attractively priced components and systems, and one assumes the potential low cost of Russian engineering, are seen by the company as a means of making the product competitive. The final funding of Alliance has yet to be agreed, with $250m still to be secured, although Robinson is reported to be confident of success and expects the commitments from investors imminently to join the $410m already committed to the programme. The finding of the final funding has however, taken some period of time, with Robinson reported to have expected at least half the outstanding funding in late January. To breakeven, the programme is reported to require 100 aircraft sales and Robinson claims to hold letters of intent from two airlines for 30 aircraft. This appears to be a highly risky programme given the timescale involved and the task of developing an aircraft and building it at the former Pease US Air Force Base. It seems therefore unlikely, given Pogosyan's traditional caution in contrast to that of General Designer Simonov, that Sukhoi has taken any risk sharing in the programme and that its involvement will mirror that of Ilyushin's at Boeing of design capacity for hire.

Article ID: 1856