Ukraine's aircraft construction industry takes nosedive

Author : Olena Holubeva

Source : 112 Ukraine

After the collapse of the Soviet Union and the rupture of the economic chains, Antonov's business began to deteriorate rapidly
09:20, 9 July 2018

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Antonov state enterprise

Ukraine has inherited "Antonov," a real giant of the aircraft construction, after the collapse of the Soviet Union. Ukrainian aircraft construction was represented by two aircraft construction sites in Kyiv and Kharkiv, a flying base in Gostomel and a design bureau, where cargo log giants Ruslan and Mriya were created during the Soviet era.

After the collapse of the Soviet Union and the rupture of economic chains, enterprise’s business began to deteriorate rapidly: orders were still being received, but most of them were dictated by political rather than commercial expediency. The key factor was the colossal dependence of the enterprise on Russia - more than half of the components for the aircraft assembled by the company came from the neighboring country. Even chassis for the AN were manufactured by a Russian company in Nizhny Novgorod. No systemic steps have been taken to somehow change this situation.

Related: Antonov State Enterprise sees 85% increase in net profit in 2017

In 2014, when the war erupted and all economic ties with Russia were severed, it became clear that further cooperation in such a strategically important industry as aircraft construction was also impossible. It had a dreadful impact on "Antonov," and mass production of aircraft stopped due to the lack of component parts. A year later, the authorities decided to transfer "Antonov" to the "Ukroboronprom" concern, so they transferred only the Kyiv aircraft construction site, Kharkiv construction site was actually destroyed.

The transfer of assets did not change the situation: the domestic defense industry has no money for ordering aircraft. For three years, "Antonov" concern has not produced out any serial aircraft, while four heads of the company have changed during this time. And while the problem of import substitution of Russian components is not solved, the problem with the dead center will not be resolved.

In general, Ukraine runs the risk of losing the aircraft industry as such. "Antonov" employees massively move to foreign companies, and experts believe, no one is interested in the company itself. Now its unique equipment might be sold at the price of scrap metal, and a huge area might be sold at the price of a residential development.

Antonov state enterprise

In early June, Ukroboronprom appointed Olexandr Donets as the president of "Antonov". He replaced acting president Olexandr Kryvokon. Donets became the fourth head of the company for the last three years: since June 2015, it was headed by Mykhailo Gvozdev, and since June 2016 – by Olexandr Kotsyuba. The predecessor of Donets, Olexandr Kryvokon, has left the enterprise with a loud scandal. "The reason was the numerous official appeals of the scientific and technical council of the enterprise, trade unions, in which the collective expressed distrust to the ex-president. This was not even an appeal, but a real cry of the staff’s soul. We understood that it could end in a collapse for the enterprise," Donets tells. According to the new president, his predecessor "could not get along with the “Antonov” team." Kryvokon was dismissed "by the agreement of the parties".

Related: Antonov enterprise cyber attack claims, publishing fake letter on website

Despite all the promises and assurances of “Antonov’s” ex-heads of and state officials, no serial aircraft has been produced in the enterprise since 2015. Kotsyuba promised to launch the An-132 and An-178 planes into the series. "In parallel with the construction of the AN-132 demonstrator and the test flights of the AN-178, we are preparing a serial production," he said. A year earlier, his predecessor Gvozdev and ex-head of Ukroboronprom Roman Romanov talked about contracts for the production of 43 aircraft (An-178, An-158, An-74), concluded with at least three countries. Gvozdev announced the release of at least 25 aircraft a year.

In 2015, “Antonov” press service announced the signing of an agreement for the supply of 10 aircraft for the Azerbaijani company Silkway airlines, as well as the signing of a protocol of intent with the Chinese company Beijing A-Star airspace and technology Co., expressing readiness to buy two An-178 aircraft.

"The An-158 is a short-range aircraft designed to carry up to 99 passengers, an extended version of the An-148. In total, six An-158 aircraft were produced serially,  they were operated by Cubana de Aviacion (Cuba), which supplied them under a leasing agreement with Ilyushin Finance Co. (Russia's largest specialized company in the field of aviation leasing). Thanks to this company these planes were launched and delivered to Cuba, half of which do not fly now.

Related: State enterprise Antonov commented on its possible cooperation with Russia

"Antonov" is not able to ensure their smooth operation. They have been standing for a year, and according to the latest information, the work of three of them have resumed," said expert in the field of transport Olexandr Kava. According to the expert, analogue of AN-158, E-Jet of Brazilian company Embraer, is now the second generation of these E-Jet E190 aircraft (capable of carrying 100 passengers in a two-class cabin or 124 for one class in the cabin), and its competitors Bombardier CRJ-900 and CRJ-1000 (90-104 passenger seats, depending on the modification of the air vessel) and CS100 (passenger capacity from 108 to 133 people). The An-158 competitor is Russian Sukhoi Superjet-100 (a short-range passenger aircraft intended for the carriage of 98-108 passengers for a range of up to 3,000 or 4,600 km.) According to the new president of “Antonov,” now the main task for the state enterprise is to find an alternative to the Russian components. The replacement program for Russian components requires very large investments from the state, and Ukraine cannot afford it now. Competitors of "Antonov" produce aircraft serially, they have long been on the market, so they have got a stable customer base.

Antonov state enterprise

Another problem is that if the equipment is replaced (for imported equipment), the aircraft will have to be re-certified. The production of the An-158, like the An-148, was once certified by the Aviation Register of the Interstate Aviation Committee (AR IAC, headquarters in Moscow). Re-certification of the aircraft is a very expensive procedure, it takes millions of dollars.

In addition to the empty AN-158 fuselage, Antonov has a completely workable AN-178 ready-made vehicle. It is the one-of-a-kind piece.

In 2016, the AN-178 was taken to an exhibition in Farnborough. Then Kotsyuba stated that "the British side has announced the AN-178 flights participation and demonstration, and we are witnessing interest in our aircraft." He said that "the world is already familiar with the An-178" and expected that specific documents would be signed in Farnborough. However, no contracts to supply the car to conclude so far failed.

In 2017, Antonov announced the project for the construction of AN-132 serial aircraft in Saudi Arabia. At the same time, it was reported that a plant would be built in order to assemble them in the country. The director of the An-132 aircraft program, Olexandr Khokhlov, stated that "while the plant is being built in Saudi Arabia, we must produce 20 aircraft in Kyiv and sell them." According to him, in three or four years the production should reach a minimum rate of 12 aircraft per year on each line. Ambassador Extraordinary and Plenipotentiary of Canada to Ukraine Roman Vashchuk during the second international trade and industry conference "Free Trade Zone: Opportunities and Challenges for Ukraine and Partners" in 2016 said that within the framework of the project with the participation of "Antonov" it was planned to create up to 90 aircraft. There were plans to create a training center "Antonov-Academy" for the training of technicians, engineers, and workers who will work at a serial plant in Saudi Arabia. Note that it was initially assumed that the aircraft produced within the program will be equipped with engines Pratt & Whitney Canada.

Related: Ukraine plans to export Antonov planes to Kazakhstan

As part of this project, at the end of 2016, a prototype car was solemnly rolled out of the hangars, and on March 31, 2017, the An-132D performed its first flight. Now, according to Donets, the project is at the stage when the Saudi party ordered a full feasibility study.

Donets says that now "Antonov" is negotiating for the supply of special versions of AN-148 from the Ministry of Defense. He does not deny that these negotiations have lasted for almost two years. He noted that this order is important, "including, for further promotion of this type of aircraft to the market."  The main problem of the Ministry of Defense is the lack of funds for the purchase of aircraft. The military industry is also financed from the budget, but there is no money, Kava concludes.

The lack of capacity utilization at “Antonov” was once tried to solve by setting up the production of trolleybuses. Some of them are still used. Trolleybuses had been produced since 2000. As of 2007, about 50 trolleybuses were created. After that, their production was curtailed.

Antonov state enterprise

Another serious problem of “Antonov” is the lack of service centers. In this regard, in order to replace one broken piece, you have to wait for months until it is delivered from Ukraine. The competitors of the Ukrainian enterprise do not have such problems - they have a branched, well-established network in many countries.

The leadership of “Antonov” does not even try to deny that the state enterprise survives thanks to the cross-subsidization of the aviation projects. It is about profitable units; "Antonov Airlines" is carrying out freight traffic around the world, units that extend the life of aircraft, in fact, subsidize unprofitable aircraft.

"Antonov Airlines" is operated by planes built during the Soviet era - "Mriya" and "Ruslan".

"Our politicians like to pose against the background of the An-225 Mriya and forget that this year this plane turns 30 and it is time to place it in the museum. In addition, we must admit that this aircraft is a great achievement not of the Ukrainian engineering thought but rather of the Soviet engineering thought, as it was built by the whole Soviet Union," Kava said. An-124 Ruslan first flew into the air 36 years ago.

Antonov state enterprise

"Antonov" is now unable to repeat the famous cargo of "Ruslan". "The creation of such a complex aircraft, like Ruslan, involved hundreds of institutes and industrial enterprises of the Soviet Union," Donets said. According to him, the state enterprise has design documentation for Ruslan, but "the machine, if we talk about the resumption of its production, will have a different look." It will be necessary to redesign the entire aircraft, control systems, the board will be digital." The assembly of the second "Mriya," according to the calculations of 2012, could cost $ 500 million.

Related: Cabinet disbands Antonov aircraft engineering consortium

Russian plant in Ulyanovsk could resume production of Ruslan, this plant was built in Soviet times specifically for the release of Ruslan. Equipment at the enterprise is still in a working condition. And while Ukraine is hesitating, the competition in the world field of aircraft construction is exacerbated. Now Japan, South Korea (countries that produce military aircraft), Iran, and India are trying to establish civil aircraft production. Director of the consulting company Friendly Avia Support said that only 12 countries in the world, except Ukraine, produce airplanes. Civil aircraft are produced only in Russia, China, Canada, the United States, and Brazil. In the European Union Airbus has production in Germany, France, Great Britain (main production). The company also has facilities in Italy and Spain. Als,o the EU is producing the light-engine aircraft, in particular, the Czech Republic and Austria. It is likely that soon Ukraine will no longer be on this list.

Related: Antonov Company can renew cooperation with Russia

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