The civil-aviation industries of Russia and the CIS complain that a lack of state funding, and difficulties in certificating their products in the West, lie at the root of their massive problems. They are wrong, in that those difficulties are only the symptoms of a far worse malaise. The harsh reality is that the region has too many manufacturers, employing too many people and with too few customers.
Few would disagree that the civil aviation industries of Russia and the CIS are in a critical condition. Less clear, are the solutions needed to put those industries back on course.
Speakers at the recent Flight International and Aviaexport conference in Moscow, confirmed that the problems of state funding and delayed Western certification are very real ones for these industries. Many were less clear that the greatest problem of all, however, lies in restructuring their industries to meet the needs of the post-USSR world.
In that, they are not alone. The US and European industries, have been going through the agonies of their own radical restructuring, over the past few years. They have resulted in the loss of hundreds of thousands of jobs, plant closures and a string of alliances, mergers and acquisitions. There will be more to come.
If the countries of the East are to compete on equal terms, they must follow suit in performing radical surgery on their own oversized industries. More pressing still, they must lead a fundamental overhaul of the way those industries are structured.
The separation of design bureaux and manufacturing plants, often by thousands of kilometres, is clearly inefficient. Worse still, the structure creates cultural and political divides between companies which desperately need to work together if the industry is to have any chance of recovery.
This division of responsibilities, an artificial throw back to Soviet days, will also remain a serious drag on the ability of companies in the CIS to get their products certificated and sold in the West.
Even with the integration of manufacturing and design functions, there will still be too many players competing for scant markets and resources. Simple economics dictate that not all will survive in a free market.
Certainly, the Russian industry is right to look to Government for support, but not through the blanket funding of aircraft and engine projects. Even if the money were available there would be little to gain from artificially propping up an industry, which is unsustainable in the long term.
The key role of the state should be to drive the consolidation of an industry, which it still largely owns. Where funding is to be given, it should be given selectively.
The state must also create the legal and political environment within which the industry can survive and prosper. Western investors, shy of pouring money into a vast and unfocused industry, may also then be persuaded to play a more active part in helping with the reconstruction.
Attention should also be steered away from ambitions of selling aircraft in foreign hard-currency markets, back to the more immediate opportunities closer to home. There are more than 900 Soviet-built airliners in the domestic fleet which need replacement. The domestic aerospace industry has the opportunity to fulfill this demand - but only if it refocuses and resizes itself for the task. Otherwise, it stands to lose out to imported Western aircraft. There is no shortage of cheap, used, models in the deserts of the USA.
No-one would suggest that this rapid and radical consolidation will be easy or painless - but a first step towards recovery is to admit as much. It will require a cultural sea change for a region, which demanded that enterprises take care of the worker from the cradle to the grave.
Some famous names of Russian aerospace may have to perish. Western aerospace industries have faced, and still face, similar cold commercial realities, including the loss of some of their own once-great names.
The industries of Russia and the CIS have the technical strength to re-emerge as world leaders in aerospace, but as the Western experience shows, that alone is not always enough.
Source: Flight International
