After more than a decade of work and losses, Russia’s Sukhoi Civil Aircraft Company (SCAC) has finally broken into the European market after it delivered at the end of May the first two of 15 Sukhoi Superjet 100s to the Irish carrier CityJet.
The deal, reported to be worth over $1bn, is a coup for the Russian civil aircraft maker, which has decided to compete with its international peers by building a more comfortable plane rather than a more profitable one. And it will also go a long way to erasing a black mark hanging over the plane since one crashed during a demonstration flight in Indonesia in 2013, killing all 45 passengers on board.
The Irish regional airline took delivery of the first two planes on May 24 at a ceremony at the SuperJet International site in Venice, Italy. Two more planes are on the way, with another 11 to be delivered next year. CityJet also has an option on 10 more, according to the statement from Sukhoi's parent company United Aircraft Corporation.
When the deal was first signed back in October 2015, CityJet Executive Chairman Pat Byrne told journalists: “We are very excited to be the very first airline in Europe to choose this game-changing aircraft that delivers a level of comfort, plush interior design and cabin capacity that is far superior to all of its competitors. This is a very versatile new generation jet which will fulfill our requirements with a capability to operate at smaller airports such as our hub at London City Airport and offer significant advantages in fuel efficiency, emissions ratings and noise reduction.”
Alexander Dolotovsky, the chief architect of the plane, tells bne IntelliNews in an exclusive interview that the company wanted to offer “something new, unusual”. “Anyone can build a plane if they have the technology available. The trick to make a plane that people will enjoy flying in,” says Dolotovsky.
Rising from the ashes
In Soviet times Russia was an aviation powerhouse, churning out thousands to planes for Aeroflot to ferry its citizens around the giant country. But the collapse of the USSR was rapidly followed by the collapse of the airline, which grounded the bulk of its planes, and demand for new Russian-made planes evaporated overnight. Aviation plants accords the former Soviet Union that built Aeroflot's planes went bust en masse.
It took over a decade before Russia was beginning to shakily stand on its feet again and the idea to make a modern Russian-built regional carrier and capitalize on one of the country’s few knowledge-based industries that could compete on the international market was launched in 2003. The Superjet (so-called as a play on the “Su” call sign for all Sukhoi’s planes) was designed from the outset to compete in the medium-range global passenger jet market, says Dolotovsky. SCAC was set up as the civilian arm of its more famous military producer and part of the larger state-owned holding United Aviation Company (UAC), which was set up to coordinate the government’s efforts to revive its stricken aviation industry. The new design made its maiden flight five years later in 2008.
The team spent the first two years studying the competition to see what the market was demanding before starting to design its own plane. This included cooperating with other leading producers of airplanes, including Boeing, which was a consultant on the project.
Russia didn't come to this project empty handed. It has a comparative advantage in aviation, as Russian war planes are amongst the most advanced in the world. Russia’s fifth generation SU35 fighter jet, built by SCAC’s sister company that makes military planes, is currently the most advanced fighter jet in the world. “We merged out best experience with the advice we got from outside contractors. We developed our own first-class avionics and put out to tender all the non-essential systems,” says Dolotovsky.
If the original idea was to build a 100% “made in Russia” plane, that idea was rapidly abandoned. While Russian aviation has a lot to contribute, the issues of price and quality meant it was cheaper and easier to bring in foreign partners to build some key items like the engines. “No one has a 100% domestically produced airplane these days – regardless of which country you come from,” says Dolotovsky, who adds that all of the structural work on the Superjet is Russian and put together at the Komsomolsk-on-Amur plant in Russia's Far East, formerly a closed city to foreigners.
Maybe the most interesting part of the Superjet, and one of its main selling points, is the engine that was specially developed together with French partner Snecma and has a brand new high-efficiency design. This is important, as the industry recently upgraded its environmental requirements and is planning to increase them again; the new Russian engine already meets the mooted new regulatory standards, whereas older planes from other makers coukd be forced to upgrade their engines to comply, says Dolotovsky. There will also be new rules concerning ice on the wings and perhaps not surprisingly the new Superjet 100 is also the first commercial jet that has met these new standards. The Superjet received its European Aviation Safety Agency certification in 2012. “Our jet is one of the safest planes in the global market, if you are just judging it from the standard of meeting regulatory requirements,” says Dolotovsky.
Russia’s advanced military aviation capabilities came in especially useful in the wing design. An unusually high aspect ratio (the thickness of the wing versus its width) was used, which Dolotovsky says is super-efficient and results in a 30% fuel-use saving. Coupled with the new engine, which also delivers both environmental and fuel-saving advantages, the Superjet 100 offers considerable running cost savings to its owner. “The SU95 [Superjet] consumers an average 7% less fuel than its competitors,” says Dolotovsky. “As the cross section of our fuselage is bigger than most of our competitors, the fuel consumption of the plane should be worse than their’s, not better.”
Safety and reliability are crucial for any would-be plane maker and an obligatory part of the design effort. But to sell the plane to airlines the Superjet designers decided to offer something more – a better flying experience for the passengers than any of its rivals.
The Superjet’s main competition is not Boeing and Airbus, which dominate the large passenger plane market, but Brazil’s Embraer and Canada's Bombardier. These two make the smaller mid-range planes, the work horses of European travel, and already supply most of Europe’s medium-range carriers.
Superjet can compete with its rivals in terms of cost, and the devaluation of the ruble in December 2014 has only improved SCAC’s offering in price terms, but rather that start a price war, the company has chosen to compete on comfort. The company won’t say exactly how much the Superjet costs, but industry experts estimate the price tag at about $30mn per plane. “You get a Rolls Royce for the cost of a Hyundai,” says Dolotovsky.
It’s all in the details. Medium-range jets tend to be long thin cigar-shaped affairs and not particularly comfortable. However, the cabin height in a Superjet is 2.12 metres, which makes it one of the highest ceilings of any jet on the market and translates into more overhead locker room per person. The corridor width is wider – 50.8cm vs 43.2cm on most other planes – which makes it possible to squeeze passed the duty free trolley on the way to the toilet. And at 46.7cm, the Superjets seats are the widest on the market, claims Dolotovsky. “All this gives the whole cabin a lighter and roomier feel – and that is really all the passengers care about,” says Dolotovsky.
All SCAC planes come with the standard two seats on the left, three seats on the right, which is one of the ways you can distinguish it if you are on a Superjet for the first time. Many of the other regional jets are much thinner and have only two seats right and left. Some of the other makers also make the middle seat of a set of three slightly narrower to squeeze them into the thinner fuselage.
The market research focus groups have already given the Superjet the thumbs up, says Dolotovsky, with the Superjet scoring significantly higher than its rivals in terms of pleasant passenger experience. And this is the plane’s unique selling point: passengers care about their comfort. A recent TripAdvisor survey found that a quarter of passengers were willing to pay up to $25 to upgrade to a more comfortable seat and 83% said their seat was uncomfortable.
“The focus of other plane markets is on the airline: they try to pack in the most seats into a thinner, lighter plane to maximize the profitability of the plane,” says Dolotovsky. “We took a different approach where we tried to maximize the comfort not the cash. For example, when designing the overhead lockers we thought about the biggest handheld bag anyone would be carrying and there is enough room in the locker to hold a guitar case, which is one of the most awkward carryon baggage items.”
Dolotovsky says the same thinking has been extended to the rest of the plane. The cargo hold doors were redesigned so that an airport worker can load and unload the bags in the hold while standing on the tarmac; in other planes the hold door is higher and requires the baggage handlers to climb inside or use a ladder.
The bottom line is that even with the wider body and more room inside, thanks to the more efficient wings and engine, plus the beneficial effects of devaluation, the Superjet should be cheaper to run than its rivals and cost the same or a bit less to buy.
The Irish deal is a feather in the SCAC cap and the company is hopeful now the floodgate has been breached that more orders will follow. The deal will also go some way to erasing the dark memory of the Mount Salak crash, when a demonstration flight during an Asian tour ended in tragedy. Potential buyers had been sniffing around the plane at the time, but all retreated after the disaster. “It was a combination of pilot and air traffic control (ATC) errors that culminated in tragedy,” says Dolotovsky. “There is nothing wrong with the plane or its reliability.”
SCAC was in Indonesia to show off its product, but the course was not on a regular commercial route. The crew was distracted by the passengers who were being shown the cabin in action as the plane flew amongst the islands off the coast. Amongst the mistakes, the proximity warning system was switched off by the crew as they were relying on the air traffic controllers, who themselves had mistaken the local topology and confused the Superjet with a fighter plane in the area. Everyone on board, mostly Russians and the deputy Indonesian transport minister, died when the plane flew into a mountain on an island.
As a commercial venture, SCAC has been struggling; so far Russia has only managed to sell the planes to domestic airlines and a few allies. Aeroflot has already bought 26 and YakutiyaAir has said it would like to buy 50, but that deal remains open. Mexico’s Interjet bought another 20 in the only large international deal and has ordered an additional 10 planes. SCAC's first customer was Armenia Air, which ordered two, cancelled the order for the second one when it ran out of money and more recently has had to return the first one too as it teeters on the edge of bankruptcy. That is why the Irish CityJet deal is so significant for the company. “The deal will open the gate to the European markets. Europe has been looking at us for a while, but the question was always: who is going to go first?”
France’s national carrier Air France has already expressed an interest and plans to lease the Superjet from Ireland’s Cityjet later this year.
Even so, SCAC is not out of the woods yet. In 2010, the Superjet had a strong order book of around 200 sales to companies in Russia and Southeast Asia, but the global slowdown means it has not been able to complete many of those deals. The company needs to sell some 300 planes a year to be profitable – not an impossible gap to close, but difficult in the current global environment.
The project was supposed to be breaking even last year with 50 sales a year, but production peaked with 37 aircraft in 2014. Information on how many Superjets are actually in service are a bit vague, but according to reports a total of 84 plane have been sold, of which 77 are in service.
In the meantime SCAC has racked up reported losses of $2.7bn since inception and needed bailing out by the cash-strapped government. However, it takes time to bring a new design into the market and “the Superjet is in the game for the long-haul”, says Dolotovsky with a sardonic smile on his face.