Leasing may be key to survival of Russian aircraft industry

Leasing is one of the main economic mechanisms that will allow the Russian aircraft industry to remain an effective branch of the economy, according to Stanislav Rynkevich, the deputy chairman of state-owned aerospace agency Rosaviakosmos. Rynkevich said that the aircraft industry is a research-oriented sector with a long production cycle that 'requires long-term investment.' He believes that leasing could become the main way of attracting financial resources into the sector, as this would enable to industry to manufacture its products.

Rynkevich noted that the Russian aircraft market has collapsed over the last few years. During the 1990s the domestic industry managed to sell between 100 and 300 planes a year, but in 2002 the figure fell to 4. Rynkevich believes that leasing will give credit and financial organisations the opportunity to 'make real investments in developing aircraft production.' He added that 'with the necessary legislative support, leasing mechanisms could work effectively in the aircraft industry.' Rynkevich recalled that in 1999 over 600 leasing companies, operating in various industrial sectors, opened in Russia after the law was amended to support sales on a leasing basis.

According to Rynkevich, another important factor in the development of the Russian aircraft industry is 'orienting sales not just at the domestic market, but towards foreign orders as well.' He stressed that Russia has a bright future in this regard as it has managed to preserve its scientific potential, and some Russian technologies outlast their foreign competitors by 10-15 years.