Russia does not mind refusing from a billion dollars contract

It seems that Russia will not reverse the plans of establishing the manufacturing of the Il-76 military transport planes in Ulyanovsk in any conditions. According to the general director of the Ilyushin aviation complex Victor Livanov the first Ulyanovsk made Il-76 will come up in 2010. It will be the plane for a specific customer. Theoretically it is possible to assume that this customer is Chinese Air Force. For long Russia has been considering the removal of the manufacturing of Il-76 from Tashkent (Uzbekistan) to Ulyanovsk. But officially the plans were announced after signing a billion contracts with China on delivering 34 transport and 4 tanker planes of this model. However, now this contract has been suspended by Russia. It is true that Russia is looking for the way of continuing the project, but its implementation under the terms agreed on in 2005 is no more possible. It will lead to huge losses as since 2005 the cost of materials and works considerably grew. Recently the head of the Federal Agency on Industry of Russia Boris Alyoshin visited Uzbekistan to participate in the session of the Russian-Uzbek intergovernmental commission. As a matter of fact all heavy military-transport planes Il-76 were made during Soviet times exclusively by the Tashkent plant. Russian enterprises did not have the capacities for assembling Il-76 at all.

The most probable outcome is changing the conditions of the contract, raising it up to 1.5 billion USD. Experts believe that finally Russia will manage to persuade China to accept higher prices, although acknowledge that this will be used by the Chinese in the future contracts. Russia also intends to introduce technical changes as a result of the upgrade and removal from the Tashkent plant. This is supposed to justify the higher price and the delivery commencement in 2010, not in 2007, as it was originally planned.

Meanwhile irrespectively of the Chinese answer Russia is arranging manufacturing of Il-76 in Ulyanovsk. The upgraded aircraft, which will meet all possible technical requirements in the foreseeable future, is needed by the Russian Air Force. Ilyushin estimates the market of Il-76 and its modifications at 150 units before 2015. Half of that accounts for the Russian Air Force. However, Ilyushin admits that it will take longer, probably up to 2025 to satisfy this demand. By 2009 the government will allocate RUB 6.4 billion for establishing serial manufacturing in Ulyanovsk. Victor Livanov called these allocations “all necessary means”. As of today Ulyanovsk based Aviastar plans to make 10 Il-76 of different modifications from 2012.

This development goes parallel to the development of another manufacturer of Ilyushin aircraft. In particular, by 2015 Voronezh based VASO intends to hire over 7000 people due to the increase of the production. Totally the plant will employ 16000-20000 staff. Recently the United Aviation-building Company approved the production program for VASO. Before 2015 it includes production of the small military-transport Il-112, long-haul Il-96 (transport and passenger), Russian-Ukrainian medium An-148, blocks for Sukhoi Super Jet - 100 and parts for Airbus. In total it is planned to make 262 planes of different types. Finally, but very importantly, VASO is likely to participate in the construction of the new generation regional plane of MS-21 from 2012. This aircraft is deemed as the core of the Russian breakthrough in the civil aviation.

According to the head of VASO Mikhail Shushpanov before 2012 the plant will make 23 Il-96. Passenger models will be built for Rossiya Airline, cargo Il-96-400T for Aeroflot Cargo and Atlant-Soyuz. Production plan includes 236 sets of units for Sper Jet -100, 74 Il-112. VASO intends to spend RUB 8.5 billion on upgrading its technologies and staff training. Partially the costs will be subsidized by the government.