Sokol and Myashishchev in discussions (880 words)

Published: 7/19/2000

It seems that some of the early interest in the Myasishchev M-101 Gzhel may have dissipated. According to Yevgeny Charsky, General Designer of the aircraft, there was some strong interest in acquiring the aircraft once the certification was complete, but this appears to have petered out leaving only unspecified 'interest' over the last few months. For Myasishchev financing has been a major problem even with the support of defence and aerospace finance group Kaskol for the certification programmes for the M-101 and the M-201 agreed earlier in the year. The bureau still requires a further 6-8 months to complete certification of the single turboprop, although this timeline has stretched considerably over the last two years and potentially could do so again. Myasishchev however, is confident of achieving the certification at some point, but remains concerned that Sokol lacks the working capital to complete the airframes to meet any customer demand that might emerge. This seems a curious stance on the part of the bureau, as Sokol is reported to have built five of the aircraft and has recently bought a consignment of the Czech Walter M-601 turboprops to power further aircraft to be produced at Sokol in Nizhny Novgorod. The engines have however, not yet been delivered and are reported to be the subject of financing discussions. In an interview with Prime-Tass, Vasily Pankov, General Director of Sokol, re-emphasised the challenge of financing for both sides by stating that the certification of the Gzhel required a further $6.4 m, of which, according to Pankov, $3 m will be financed from the state budget. Sokol, who has the primary responsibility for the aircraft's marketing, has tried to sell the aircraft in Africa ahead of certification, with trips to Egypt and an aircraft reportedly being on loan to Central African Airlines. This airline seems to be the main driver of African interest. Although it is unclear exactly what sales the African connection will bring, the purchase of the additional Walter engines may refect the possibility of more substantive orders. Sources within the Sokol report that an aircraft will be shipped in the next month to Africa, but the customer remains unknown. Pankov himself states that they have 'interest' in 100 aircraft from customers at home and abroad. The only contract that appears to be confirmed is that with Chukotsky Autonomous for three aircraft, involving an elaborate barter trade deal. Other potential Russian users have expressed the view that while an able aircraft, the Gzhel with a lease cost of $250 per hour is too expensive. Russian carrier Fenix Air operated the aircraft on short-haul freight services out of Moscow until quite recently, but according Sokol, no longer have a contract with them. For both Sokol and Myasishchev, the last couple of years have been particularly tough for their two active civilian programmes, the M-101 and the M-201 Sokol. The financing for much of the work was coming from Inkombank , which went into bankruptcy as a result of the 1998 financial crisis. The M-201 has fared somewhat better than the M-101, being financed externally by the Czech Republic, although the next tranche of the lending, supposed to be used on the M-201, is reported to look much less likely. Discussions are taking place in Nizhni Novgorod in the next two to three weeks according to reports, but are linked to undisclosed Inkombank lending. Charsky sees the M-201, twin turboprop multirole light transport, as having good prospects, despite not having a flying prototype. He believes that an investor can be attracted for the programme, which he reports to be making steady if slow progress, recently completing most of its design work and a successful series of wind tunnel tests at TsAGI. Sokol's military activities, given the recent recovery in military expenditure, are looking more favourable. They have completed the upgrade of 'several' MiG-31Bs, the second production and service variant of the interceptor, to MiG-31BS for delivery to the air force this year. The company is optimistic about the prospects for the MiG-31 upgrade business given that the air force has 280 in service and a replacement is not in sight. Sokol, with exception of the aircraft repair facility at Rzhev, is the only MiG-31 upgrade facility and is therefore set to benefit from the Russian Air Force's strong desire to improve their capability at lower cost by upgrading existing types. According to some sources, the adoption of new weaponry in the form of RBB-AE missile and avionics, particularly radar, offers considerable performance improvements and there are plans to upgrade over half of the MiG-31s in service. The Ministry of Defence is also reported to be considering further improvements including the installation of the new H-37 air to ground missile. In addition to the domestic market, Sokol is actively promoting the export version of the MiG-31, the MiG-31E, in conjunction with Rosvooruzheniye and RSK MiG, with one aircraft having completed flights tests. The aircraft has been offered to a number of countries including India and China. The MiG-21 upgrade programme which Sokol is undertaking for Rosvooruzheniye, will see the first two aircraft delivered in the near future according to Sokol. The plant has already started to ship parts and components to Hindustan Aeronautics for the rest of the 125 aircraft.

Article ID: 1950