Lack of funding dogs troubled Aviakor-Aviation Plant (504 words)

Published: 6/7/2001

Aviakor-Aviation Plant's ongoing financing problems have prompted a decision to suspend work on the development of production of the An-140. The plant has found itself unable to raise the previously reported $10m needed to establish the line. This leaves the company with five airframes in various stages of completion. There has been significant interest from a number of airlines in the aircraft, the most recent coming from Tyumenaviatrans. To date, however, there have been no successfully completed orders, despite commitments from Sakha Airlines and Ukraine Air. Completion of the first serial An-140 was originally planned for 2001. Given the struggling plant's finances, it seems unlikely that it will revive without a firm commitment from the company's controlling shareholders, Siberian Aluminium. So far it has been reluctant to make any commitment, despite many months of discussions over the plant's future, particularly after its separation from its parent company, Aviakor, prior to the company being declared bankrupt last month by the Samara Arbitrage Court. Elsewhere, the An-140's development appears to have stalled with exception of the licence production of the An-140 in Ishfahan in Iran by IAMI, which rolled out the first locally assembled aircraft - the IRAN-140 - earlier this year and is due to rollout a further aircraft in September. Potential demand for the locally produced aircraft is reported to be between 15-20 aircraft and will be filled under the contract between the facility and the Kharkov Aviation Plant (KhGAPP), for 12 aircraft by 2004. Aviakor's co-producer of the aircraft, KhGAPP, outside of the IAMA deal, is not faring any better than Aviakor. Although one aircraft is in service with Ikar Airlines, the deal is not believed to be a commercial one, given the relationship between the plant and the carrier's owners, Kharkov Trading Company, which is regarded as being unlikely to be able to meet the $7m cost of purchase. According to its General Director Belogub, Aviakor still has 14 uncompleted Tu-154 airframes and plans to finish them. Belogub says that five of the 14 aircraft are already sold to undisclosed customers as Tu-154Ms, with further discussions taking place on four further aircraft, one of which will be in VIP configuration. He claims that, if the discussions prove to be unsuccessful, the plant will fund completion through its own resources or by borrowing to complete the aircraft and lease them. The company was reported to have had discussions with the Leader group, over leasing the unfinished aircraft, although it is unclear what involvement it has in the current sales. On a more positive note, Belogub says that, in July 2001, the plant will complete the first Tu-154-100, which has improved layout and equipment over its predecessors. The new variant, according to Belogub, has been funded in part by the plant's own resources and through borrowing, but suggests that the cost of the new aircraft will not exceed $8m. Local sources indicate that the plant may lease the aircraft, when it becomes available.

Article ID: 2575