Aeroflot brings Russia's aviation drive down to earth

By bne IntelliNews February 6, 2013

bne -

Russia's attempt to create a new high tech aviation sector on the rubble of the Soviet industry is looking more of a flop as national airline Aeroflot reports that a full 40% of all reported equipment failures occur in the much trumpeted flagship of the drive, the Sukhoi SuperJet 100 (SSJ 100).

Aeroflot is clearly the biggest potential customer for the new mid-range passanger plane, which is produced by state plane building holding United Aviation Corporation (UAC). However, the flag carrier has been complaining the SSJ 100 is not up to scratch. Last year the airline took delivery of four, but quietly sent them back again saying (publically at least) that the "interior decor does not meet specifications."

Now the complaints have become more public and more cutting. According to an Aeroflot report cited by Kommersant, 40% of all reported equipment failures in the airline's entire fleet were found in the locally-produced equipment on board the SSJ 100.

Further than that, Russian-made planes only make up 8% of Aeroflot's fleet, but are the main source of all problems. Aeroflot reported a total of 95 accidents in 2012, up from 60 in 2011, of which nine were classed as "critical" against only four critical accidents a year earlier. Of those incidents, the SSJ-100 accounted for just over a quarter - hugely disproportional given the small number of the new jets in the Aeroflot fleet.

On top of that, those figures only relate to planes in service, and there have been even more problems with trial and test flights. Kommersant reports on a flight from Astrakhan to Moscow where the "door open" alarm erroneously went off mid-flight.

Aeroflot says that the conditioning and navigation systems cause the most problems, but the most dangerous failures involved six incidents were caused by a chassis system failures. An unnamed Aeroflot source says that the company will send all its SSJ-100 aircraft to a Perm affiliate, but will not stop operating the planes.

System failure

The failure of the SSJ-100 thus far bodes ill for Moscow's hopes of setting up high tech industry that can compete on the international markets.

Given the relatively high cost of labour in Russia, added to the effect on the ruble of petrodollar inflows, Russia has little choice in its bid to diversify the economy but to turn to high value added tech-related industries. But despite all the money being thrown at the problem - a new fund fro "advanced technologies" was set up by President Vladimir Putin only last week - unless something fundamentally changes in the way tech is promoted and pursued it looks like the entire effort is on a road to nowhere.

Private sector innovation is the obvious solution, but all the Kremlin's efforts are going into state backed entities like UAC - and these simply aren't working. Of all the Kremlin's plans to build a 21st century economy and create the 25m new high tech jobs that are central to the Ministry of Economic Development's long-term forecast for a bright economic future, setting up a modern aviation sector should have been the easiest.

Given that the only way of getting around a country as vast as Russia is to fly, it's little wonder that one of the few things country was good at during Soviet times was building planes. At its peak the domestic sector churned out 25,000 per year. Russia's warplanes remain some of the best in the world; the MiG fighter is the stuff of legend and the family of Sukhoi fighter planes is still in high demand by governments around the world. Russia is also the only country in the world to be producing a fifth-generation fighter, the T-50

Therefore, setting up a company to make cheap mid-range passenger planes that are in increasing demand around the world and compete with the likes of Boeing and Airbus should have been a walk in the park. Putin personally backed the establishment of UAC in early 2006.

The holding consolidates Russian private and state-owned aircraft construction companies and assets engaged in the manufacture, design and sale of military, civilian, transport, and unmanned aircraft. The SSJ 100 is its flagship project in civilian aircraft, but it has experienced nothing but headaches ever since the first planes began rolling off the production lines.

The first commercial sale was to Armenia's national carrier Armavia in 2011, but the company declined to buy a second SSJ 100 as planned. In the summer, it announced it is to buy new planes from Boeing and Airbus instead.

Real disaster struck in May when a SSJ-100 crashed at an airshow in Indonesia killing everyone on board, including the representatives of ministry of transport that were thinking of buying the plane. As it turned out the crash was caused by pilot error, Indonesia certified the plane in November and will go ahead the deal, but additional customers remain thin on the ground.

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