Alexander Markov, GD of the troubled plant, explains its position, specifically on production of the Tu-154, An-140 and Tu-354 (1,620 words)

Published: 11/19/2001

The Samara-based ZAO Aviakor-Aviation Plant has unveiled a development plan for what is described as its "foreseeable future". Aviakor has been experiencing severe financial problems for some time, despite reasonably brisk business - by Russian standards, at least - and is reported to have not only mothballed production plans for the An-140, but also slowed down work on completing the final ten Tu-154Ms at the plant. According to reported financial data, the plant did manage to increase sales in the first nine months of the years to Rb650m ($21.9m) compared with Rb250m for the whole of 2000 and Rb95m in 1999. However, short term financing, to the tune of Rb25m from the Samara regional government, which was expected in August to facilitate continued work on the An-140, has been recently postponed. The plants debts have increased this year and, at the beginning of October, stood at a round $2m, with its largest creditor its electricity supplier, Samarenergo, and debtor, the Ministry of Defence. Production Plans The slowdown in activity has come despite aggressive lobbying for the plant by the region's administration at both the Russian Aerospace Agency (RAKA) and to the federal authorities through the president's regional representative, Sergey Kiriyenko. The administration is also reported to have canvassed both Ilyushin and Tupolev for work on products currently under development. It would appear that this has met with some success, as the region's Governor Konstantin Titov has announced that Aviakor intends to take part in the production of the Tu-354, Be-200 and Il-100. The plant's participation was confirmed by Alexander Markov, Aviakor's General Designer and Deputy GD in a report in a Samara newspaper, Reportyor. But he added that the plant's primary business is still the upgrade of Tu-154s in service with hush kits for engines in conjunction with the engine producers. The plant produced and sold four Tu-154Ms in 2001, one aircraft in 2000 and none in 1999; in 2001, it has overhauled 16 aircraft, following 13 aircraft in 2000 and nine in 1999. The upgrade of the D-30KU-154 (2nd series) used on both the Tu-154 and Il-76, is being undertaken by AO Rybinsk Motors with AO Perm Aviadvigatel under the supervision of RAKA and Tupolev in three stages. · The 1st stage, due to be started in 2002, requires $3.5m of investment and involves the improvment of the noise and emission level of the D-30KU-154 (3rd series), with a price to operators for an engine to be upgraded of $250,000. · The 2nd stage is scheduled for 2003 and will cost $15m plus $0.6m to upgrade each engine (D-30KU-90). · The 3rd stage scheduled for 2003 has yet to be detailed, but the indications are that it will be the creation of a "practically" new engine with a "bigger diameter" that fully meets Western standards. The required investment of this stage of $20m suggests that the engine will be a further upgrade. According to Markov, Rybinsk Motors (now incorporated in NPO Saturn with Lyulka Saturn and UMPO) has already announced its readiness to finance 50% of the engine's modernisation. The remaining 50% is expected to be attracted from other vested interests, such the producers of aircraft using the engine and aviation repair plants keen to extend the lives of the 180 Tu-154s reported to be in service. The most obvious immediate buyers for the Tu-154 are those carriers undertaking international flights using the Tu-154. Aviakor estimates the size of this market to be between 65 and 70 aircraft, taking into account the ability of carriers to pay for the upgrade. There is also an indeterminate number of Il-76s in terms of potential prospects, given the considerable interest in utilising these aircraft internationally, reflected in East Line's interest in a PS-90 powered Il-76 from KAPO. According to Aviakor, this interest will sustain at least the first two stages of engine upgrades and the commensurate work for the plant. This would allow it to generate revenues necessary to implement other projects, particularly the An-140. The An-140 There are currently six An-140s in various stages of completion sitting at Aviakor, with one almost complete, but well behind the planned first production An-140 for Q4 1999: a deadline that was shelved due to financial constraints. Markov, however, believes that the first aircraft will be completed earlier this year and cites the delay as being due not only to financial problems, but also to difficulties with the aircraft's co- producer in Ukraine. According to Markov, quoted in Nezavisimaya Gazeta on 20th October, "Ukrainian components (for the An-140) are very expensive to acquire, particularly the wing". He cites the price tag for the wing, at $1.2m, to be "exorbitant", claiming that Aviakor that produces the fuselage and tail could have made the wing for between $600,000 and $650,000 and sourced the landing gear from Aviaagregat based in Samara and Gidromash in Nizhni Novgorod. Markov say the disparity in pricing is down to the fact that Aviakor simply has lower production costs. But he claims that Antonov has refused the plant the opportunity to prove this by withholding the "tooling documentation". Markov says that Aviakor has applied to RAKA and the Ukrainian-Russian Intergovernmental Commission concerned with the programme, but to no avail. However, he acknowledges that the Ukrainians may fear that when Aviakor has the full documentation it may not continue the cooperation with KhGAPP, the producer in Ukraine. Markov also complained that the Ukrainians have proved unwilling to replace French and German components in the aircraft, even when Aviakor has demonstrated that Russian equivalents are cheaper and do not require pre-payment. He said that the plant had requested more than once that ANTK Antonov replace Ukrainian electronic and radio systems with Russian equipment as the Ukrainian system was being built on a one off basis at experimental plants in Kharkov and Odessa, with the commensurate impact on price. Russian enterprises in Kazan, St Petersburg, and Moscow have been making such equipment for Russian aircraft including Antonov designs and could have easily produced the parts for the An-140. However, the Ukrainians wanted to produce the systems from their own sources. Markov said that, in terms of the completion of the first An-140 at Aviakor, it is ready for the installation of equipment, engines, and landing gear, but some electrical components, with French and German wiring, still have to be purchased. In his view, Antonov is driving costs up even further by using a German toilet system in the An-140 design. According to Markov, Aviakor had recommended to Antonov that this, at least, could be done by themselves, but Antonov had rejected the idea. Markov suspects that this is because Antonov has agreed an assembly deal with the producers in Kiev. According to Markov, Antonov even refuses to let Aviakor make a toilet bowl. He also contends that with better, mostly local servicing, the price of the aircraft could have been closer to $6.5m than the projected $8.5m. Markov believes that Aviakor should let Ukraine get on with its own production and produce an aircraft, designated An-140R, with Russian components and with a number of engine options, both Western and Russian. He claims that this would allow the plant to produce the aircraft at the $6.5m price that operators could afford. To date, no sales in Russia have been made and Markov attributes this in part to the reluctance of Russian airlines to be dependent on an aircraft that is partially produced and supported by a plant in Ukraine and, as such, subject to duties. This is a view expressed off the record by a number of airline General Directors. They are also concerned that KhGAPP will not assume responsibility for the complete aircraft and its systems as has traditionally been the case in Russia. In order to facilitate the production of the An-140 at Aviakor, according to Markov, the Ukrainian side has to allow the wing and avionics to be produced in Russia or at least make concession on fees between the two countries. Wing Production In the past, Aviakor produced wings for the Tu-154, although this facility was closed when the decision was made to stop producing Tu-154s and the focus switched to possibility of producing the Be-200 wing. The management of the plant is reported to be continuing its negotiations to attract the production of the Be-200 wing with TNTK Beriev and discussions are reported to have continued at MAKS-2001, when the sides signed a protocol of intentions, under which Aviakor would make the Be-200 wing. According to Markov, the sides signed "a more concrete document" in mid-September, and Aviakor personnel visited the current production plant IAPO, to liaise with those involved. Markov says he expects that Aviakor will fund and make the first Be-200 wing by 2003. Tu-354 Aviakor is also preparing a licence agreement for the stretched Tu-334, the Tu-354, which will be produced in close cooperation with Aviastar-SP and KAPO, with the producers financing their share of work on the first prototype. Markov says that Sergey Kiriyenko, the Presidential Representative in the Volga Federal region, is likely to approve the programme. In September, he appointed Konstantin Titov as head of a working group to develop aviation in this region, with the Tu-354 destined to be the first product of the cooperation in the region. Recent reports have suggested the plant plans to certify the aircraft by 2005. Commenting on the Il-100, Markov said that the 10-12-seat aircraft exists only in plan, and there is no engine developed yet, although Yevgenny Gritsenko, General Director of SNTK Kuznetsov, which is believed to be developing an engine for the aircraft, recommended Aviakor to AK Ilyushin as the producer for the aircraft. He added that it was still too early to talk of serial production.

Article ID: 2913