Potential large investment behind aircraft (491 words)

Published: 4/23/2001

Industrial holding company Kaskol and aircraft producers Sokol and EMZ (Myasishchev Experimental Mashine-building plant) have launched a venture called NoRS (Noviye Regionalniye Samolyoty, or New Regional Aircraft) to market unsurprisingly regional aircraft, primarily the multipupose turboporop M-101 Gzhel produced by Sokol.In an effort that Sergei Nedoroslev President of Kaskol describes as "the first attempt to implement the vertical integration concept in the Russian aircraft building industry" . Kaskol, that has shareholdings in one its partners Sokol (38.38%) and has been actively financing Myasishchev , believes that the product of the new marketing venture has had considerable investment made in it in the past by those concerned in its production and by Kaskol itself and that there is a need to make further investments to bring the programme to success after certification, that is expected in October. Kaskol will not comment whether, the reported long standing interest in the aircraft has translated into orders as yet, but say they believe that gas giant Gazprom is likely to purchase. Other Russian purchasers are reported to be interested including state owned general aviation company Avialine, who have included the Gzehl at the center of the rollout of the company's services. A deal for the aircraft was reported in July 2000 involving a barter trade with the Chukotsky Autonomous Region for three aircraft although little has been since that date. Kaskol says that foreign interest remains in the aircraft, which was demonstrated in Africa in early 2000 while on loan to Central African Airlines as part of a programme of flights in Rwanda. Libya and Algeria. The interest is however, considerably less than the 100 aircraft cited by Sokol General Director Vasily Pankov last year. Kaskol however, says that it does not plan to promote the aircraft as a direct competitor to the Pilatus PC-12 or the French Socata TBM-700 outside of Russia in the short term. The principle goal at present according to Kaskol is to sell the 8-12 airframes available at Sokol for a price of between $1.5-$1.7m, although the price may be set by the market after the appearance of the aircraft at MAKS in August. They do believe however, that the programme is worth the additional investment of potentially according to sources within Kaskol, the rather improbable figure of $50m-$70m, over the next 4-5 years. To be invested in establishing an after sales and distribution network. Given the recent struggles to find the $6.4m of funding to certify, even a proportion of this amount will considerably enhance the aircraft's prospects.According to Nedoroslev , the fundig for the programme will come from bank lending from Sberbank, Vneshekonombank, or the investment company NIKoil Kaskol sees the progamme as part of an integrated strategy within the aerospace industry and while having recently stated that they are uninterested in the development of large aircraft, have suggested that the successful outcome of the Gzehl programme could lead them to make investments in regional aircraft programmes up to 80 seats. Given that both Sokol and Myasishchev have projects in this area, they will have lots of candidates near at hand for the funding, some in collaboration with India's National Aerospace Laboratories.

Article ID: 2506