For Sukhoi this is a historical moment. Until recently the renowned Russian airplane manufacturer had been limited to building military models. The brand has moved out of its niche for the first time by taking on the regional aircraft market. The choice is economically sound: experts agree that this market should grow by 5,500 points between 2006 and 2025.
"This sector is worth five times more than the military," says Mikhail Pogosyan, director of Sukho? in 2007. The military market currently generates 95 per cent of the Moscow-based company's 2.2 billion-dollar turnover. Mikhail Pogosyan fixed the goal of evening that to 50-50 with the civil market by 2015.
Make no mistake, Russian aeronautics is back on track. Last May 19 a Sukhoi Superjet 100 (SSJ) took off for the first time from Komsomolsk-sur-Amour (in far Eastern Russia). The two test pilots - Alexander Yablontsev (pilot) and Leonid Chikunov (co-pilot) - flew over the river Amour for over an hour, inaugurating the first civilian transport plane built by a Russian company since the fall of the Soviet Union. The Superjet 100 symbolizes rebirth for the Russian civil aviation industry.
For Sukhoi this is a historical moment. Until recently the renowned Russian airplane manufacturer had been limited to building military models. The brand has moved out of its niche for the first time by taking on the regional aircraft market. The choice is economically sound: experts agree that this market should grow by 5,500 points between 2006 and 2025.
The Russian manufacturer is making no secret of its ambitions for its new jet: "The SSJ-100's commercial potential is significant," says Julia Turygina, spokesperson for Sukhoi. "We hope to capture over 17 per cent of the world market in regional aircraft in the next 20 years, which amounts to selling around 1,040 SSJs. So far, orders are up to 98, and the first planes should be delivered by the end of 2009. By 2011 we plan to be building 60 to 70 SSJs a year." The surest demand for these planes remains in Russia, naturally. This is a juicy market. Of the 5,700 civil aircraft registered in the federation, only half can fly, at best. The others are too old - 17 years old on average for long-haul planes and 30 for the regional aircraft. The result is an enormous demand in this sector, not only to renew the civilian fleet, but also to shore up growth in airline traffic. Analysts think that over 100 new planes will be needed within the next decade. Up to now Russian companies like Aeroflot had little choice but to turn to western suppliers to buy aircraft. Planes made in Russia, such as the Tupolev Tu-204 and the Tu-214 are far behind contemporary western models.
This makes good ground for the SSJ to catch on and interest Russian companies. Aeroflot has already ordered 30 aircraft (another 15 optional) and Avialeasing wants 24 (plus16 optional). But to reach the goal of 1,000 units sold within 20 years, the domestic market will not suffice. "We're looking for international recognition for this airplane," says Julia Turygina. Sukhoi hopes to sell between 700 and 800 SSJs outside the Community of Independent States (CIS) by 2028. "It's a very ambitious objective," says Francois Julian, a journalist for Air and Cosmos magazine. "Sukhoi's competitors are more experienced in the field and intend to sell the same number of aircraft in that time. In other words, Sukhoi has to catch up to the world leaders in regional aeronautics rapidly with an airplane that has far from proven its worth." For the time being, the market is divided between the Brazilian company Embraer (Embraer 170-175 and 190-195, with 70 to 108 seats) and Canada's Bombardier (CRJ 700/900, 70 to 86 seats). To break this status quo, the Russian firm, which was set up in 1930 by engineer Pavel Sukhoi, has a few trump cards to play. First of all, price. The Superjet built in Komsomolsk-sur-Amour will only cost 29 million dollars. That is 20 to 25 per cent cheaper than the competition. Then there is experience: Sukhoi knows its business. It has sold over 1,000 Su-27/30 fighters worldwide, for example.
Now foreign buyers need to be convinced. "Will western firms want to buy Russian airplanes?" asks Francois Julian. "That's the question, for cultural reasons, too." Up to now only two European companies have been swayed: Itali Airlines has ordered 10 Superjets (10 more optional) and Switzerland's AMA Asset Management Advisors has bought five VIP versions. "These are very much secondary airlines, however," Julian points out. In order to attract big buyers Sukhoi has another lever to pull: international cooperation.
Starting out with no knowledge of western aviation standards, Sukhoi opted to leave its cold-war isolationist policies on the tarmac and initiate some much-needed partnerships abroad. The Superjet project bears the trademark of every major plane-builder.
What's more, the Italian Alenia (Finmeccanica Group), which bought 25 per cent of Sukhoi' Civil Aircraft Company's (SCAC) capital in July 2007, will be a major player in the project. "Through its subsidiary, Super Jet International - a joint venture between Alenia and Sukhoi - Alenia will cover pilot training, marketing the airplane outside the CIS and, above all, the customer service on the SSJ for foreign buyers" Julian explains. This should reassure western aviation companies, who expect an airplane-maker to be able to intervene anywhere and under any circumstances. "Without a doubt these partnerships bring the SSJ the international credibility it needs," says Julian.
The upshot is that major aircraft-buyers are starting to make the right noises. "We're currently negotiating with Lufthansa and Air France-KLM, even if nothing firm has yet been agreed," a staff member of Super Jet International was quoted as saying in the Russian daily Kommersant.
Meeting upcoming deadlines will be key if Sukhoi wants to land these contracts. The Russian firm must get its plane certified by European authorities (AESA) as well as those of the US (FAA) before SSJs can fly western skies. Once done, Sukhoi should be well set for take-off in the civilian sector by making airplanes that seat over 100, which will open up a market four times bigger than the regional one. In Russia, ambitions often reflect the size of the territory.
