Dmitry Baranov: ‘The development of the aviation industry in Tatarstan will continue — it will provide thousands of people with jobs’

A leading expert of Finam Management MC about the creation of an aviation cluster in the republic and the state of affairs in the Russian aviation market

With the beginning of the special operation and imposition of Western sanctions, the Russian aviation industry and carries are going through tough times. After the EU’s ban on leasing and supplying planes and engines to our country, Russia permitted Turkey to hold two-thirds of the flights between the countries because of a shortage of planes. At the same time, large-scale production of Tu-124 planes is starting in the Kazan aircraft plant, it is planned to deliver 70 aircraft by 2030. Tatarstan’s aviation industry has big prospects in this area, thinks Dmitry Baranov, leading expert of Finam Management MC. In an op-ed column for Realnoe Vremya, he explains how the Russian aviation sector is coping with the crisis.

How to stay a member of the world’s aviation industry

The restrictions imposed on the aviation industry and transport haven’t led to a suspension in their operation: different types of aircraft are still made in the country, flights are operated, passengers and freight are transported. However, a logical question arises — what will happen to the sector further, will it develop? If so, how? We will try to find this out.

To start with, we will consider the aviation industry: several years ago it was united into one holding — the United Aviation Corporation — which allowed concentrating resources and efforts. There were singled out key projects that will allow the country to stay one of the leading members of the world’s aviation industry. Mid-range MS-21, short-range Sukhoi Superjet New, regional RVRS-44 plane, which was named Ladoga, lightweight multipurpose plane Baikal (LMS-901) for local flights, which is to replace the obsolete An-2, can be considered such projects. These planes will meet the needs for all types of air travel in the country, which will probably allow refusing foreign aviation equipment or reduce the amounts of its purchases.

It is necessary to note that these planes are mainly created using Russian components, and this lowers the dependence on foreign components. They can be used, for instance, if a client wishes this.

Russian carriers will be provided with planes

The Russian aviation industry implements not only these projects, the latest events and the imposed bans forced it to not only look for other ways of providing carriers with the necessary equipment. Several projects of this kind have been announced recently. So head of UAC Yury Slyusar said the company intended to ramp up the production of Il-96 and Il-76, it is also planned to expand the production of Tu-214.

Russian Minister of Industry and Trade Denis Manturov said in late March that the works on Il-69-400 passenger place in a longer version with modernised aircraft electronics will end in Voronezh in 2022. The certification of Russian components that will replace foreign one will be completed in 2023. Serial production of this model at Voronezh Aircraft Engineering Society PJSC will start in 2024.

This is just a part of the examples, so Russian carriers won’t stay without aircraft, they will have the equipment to transport passengers and freight.

It is necessary to stress that the implementation of different aircraft projects in the country continues and does quite actively: for instance, several MS-21 planes have already been built, they are undergoing numerous tests, which approaches their serial production. Russian spare parts and units that will replace foreign ones in Russian aircraft equipment are being tested and certified. For instance, range tests of jet engine PD-8 that will substitute foreign engines in SSJ-100 and Be-200 planes have recently ended.

The modernisation of enterprises of the aviation industry that has accelerated lately goes on, the state support for aircraft manufacturers stays and expands — it is different subsidies and preferences, state guarantees, other support measures. All this allow hoping that enterprises of the aviation industry can do the tasks that are set, start the serial production of new aircraft models, ramp up the production of those models that are already made.

Support measures for aviation sector

As for air travel, without doubt, they have suffered from the bans imposed on flights to some countries and restricted use of planes leased in other countries. All this has led to lower operational indicators of airlines, a worsening of the financial situation.

State regulatory measures have partly helped the airlines, which helped to continue using planes leased in other countries.

A fall in citizens’ incomes because of the difficult situation in the economy became a kind of “help” for aircraft, if such term can be used. The imposed bans also have played a role.

Many flights have been cancelled or their costs have been cut, as a result, fewer passengers have to be transported. This simplified the task for airlines, but it also brought a decrease in their incomes. Flights to new destinations in other countries can help the carriers but it takes time to launch them, also, the situation with the population’s incomes remains tough. There is no guarantee that there will solvent demand from people willing to fly on new routes.

A higher frequency of flights inside the country to both transport passengers and freight can become another option of supporting the airlines. It is known that many flights from one city to another are often performed via Moscow or Saint Petersburg, which isn’t always feasible. Perhaps, now it is time to launch direct flights between cities, though there will be few at first. Also, it isn’t ruled out that ring routes will be introduced when the takeoff and landing will take place at one airport.

For instance, a region or natural landmarks or something else can be observed from above. Perhaps, there is sense for carriers to join their efforts with tourist companies, which is logical to develop domestic tourism, flights combined with excursions in other regions lasting for several days aren’t excluded, that’s to say, there can be found a lot of ways of using the planes.

As for cargo transportation, of course, nobody is offering to transport logs in the cabin of a passenger plane or coal in bags, for instance, well packed different consumer goods can be carried in planes, moreover, passenger chairs can be removed temporarily. While air transport as safety margin, but it is not endless, it is necessary to take steps to continue its use so that the country with such distances doesn’t stay without aviation. It isn’t ruled out that it might need the state’s support, and this support should be provided, moreover, this isn’t necessarily expressed in direct money allocation from the budget, it can be different support measures. If the sector doesn’t receive support, the country runs the risk of losing one of transport means, the socio-economic situation will worsen because hundreds of thousands, if not millions, of people will lose jobs, and nobody will need those planes the aviation industry is producing.

Development of aviation industry and creation of aviation cluster in Tatarstan

The meaning of Tatarstan in both Russian aircraft engineering and air travel is great and we want to hope that this will be so. Enterprises of the aviation industry in the republic are an important part of UAC and actively participate in the corporation’s projects. Federal authorities are interested in their work, which speaks about the significance of local aircraft manufacturers — several high-ranking functionaries have been in the republic in the last few months.

In early February, Russian Minister of Industry and Trade Denis Manturov visited the Kazan Gorbunov Aviation Plant, a branch of Tupolev PJSC. Russian Vice Minister Yury Borisov was in the republic in late March and visited this enterprise together with Tatarstan President Rustam Minnikhanov where the increase of production of Tu-214 was considered among other issues. In Borisov’s opinion, the enterprise can make as few as 10 planes of this kind a year in the future.

The republic pays a lot of attention not only to the current operation of local aircraft producers but also their prospects. So in late April, at a meeting with Denis Manturov, Rustam Minnikhanov presented a project of an aviation cluster as part of import substitution plans. According to the republican president, it is planned to create a machining centre of UAC with a capacity of a million a year, the head of the Russian Ministry of Industry and Trade claimed support for this project.

The development of enterprises of the aviation industry in the republic will continue, they will still make their contribution to the region’s economy, provide thousands of people with jobs, local enterprises with orders. Flights to several destinations are operated from the region’s cities, and the number of destinations can increase as well as the frequency of flights.

The republic has considerable tourist potential, it attracts both Russians and citizens of other countries, it has repeatedly hosted big events so inbound traffic can go up. One shouldn’t forget the high investment attractiveness of Tatarstan, which can also help to raise the number of people coming to the republic, including by plane. As for the rise in the number of people leaving the region, first of all, it can be trips to other countries the republic has close relations with, other countries aren’t excluded either.

Dmitry Baranov

The author’s opinion does not necessarily coincide with the position of Realnoe Vremya’s editorial board.