Wednesday, April 20, 2011

Sukhoi Superjet systems can make up for any pilot mistake – UAC chief

SOURCE RT With the first Russian Sukhoi Superjet 100 jet delivered, RT caught up with the man charged with leading the project, United Aircraft Corporation company chief Mikhail Pogosyan.

RT: Mr. Pogosyan, thank you very much for finding time for us today. When can we expect the commercial operation of the new Superjet to begin?

Mikhail Pogosyan: I think that commercial operation will begin in May.

RT: How much does an aircraft cost?

MP: The price differs depending on the package the customer chooses. In any case, I can say that the price of our aircraft, especially during the initial period, has a ten to15 per cent advantage over our competitors' offers on the market.

RT: So what is the initial price?

MP: Well, the price is fixed at the purchase negotiations between the customer and the supplier, that's why it can vary, it depends on a huge number of things, and therefore I just cannot give you one figure. And in general, it’s a commercial secret between the supplier and the customer. The price range we're talking about is $23-25 million.

RT: Who's on the customer list as of today?

MP: As of today, we have about 170 customer orders. The key customers are Aeroflot, the launch customer Armavia, and Yakutia Airlines. This January, we also signed a contract with our partners from Mexico, the Interjet company, to supply them with our aircraft. We also have customers among the growing Indonesian companies such as Kartika Airlines – they have placed orders to buy our jets. Step by step, we are expanding into the global market, and I think it is an important achievement at this stage.

RT: European aircraft manufacturer Airbus recently claimed that the American government put pressure on the military to make them recall a billion dollars' worth of orders placed with the company, and re-order with Boeing, the US domestic manufacturer. My question to you is: is there really a stand-alone aircraft manufacturing industry? And why are governments always so involved in aircraft deals?

MP: I think that the development of the aircraft manufacturing industry is not merely the development of an industry, it's more than that, to a large extent this is the industry that defines the level of development of innovative technologies in a country. The aircraft industry's requirements for all systems are the toughest of all, and on the whole the level of development of the aircraft industry defines the level of development of other industries. That’s why it’s one of the primary investment sources, and we’re also talking about a huge number of jobs here, thus it is a huge business, and so I think that's why those governments which try to control all these areas also take part, to a greater or lesser extent, in the decision-making on major deals.

RT: Could the Sukhoi Company go for an IPO at any point, to follow the lead of your American competitor Lockheed?

MP: I think it’s quite possible; we just need to enter this market. Sukhoi has already launched an IPO for its civil aircraft manufacturing branch, we now have a partner, Alenia Aeronautica, and this means that it's not impossible. So, to launch an IPO for military aircraft manufacture, well – it’s all possible in due time.

RT: Don't you think that innovation and financing should come from private sources?

MP: I think that financing of such science-driven hi-tech projects must come from diverse sources, including private investments, and that’s true in the first place for civil aircraft production. I don't see private investors in military projects so clearly. However, I think that if we consider the return on investment cycle, and the level of investments required to produce modern aircraft systems, it is clear that even civil aircraft production projects can't do without some level of state financial support, especially at the initial project stages, i.e. the stages of technical research. Both in the US and Europe, such research is financed by the state. Of course, we can also talk about the company's own funds, these funds must be used to finance the company's new projects, especially their initial phases, as well.

RT: What innovation can the market expect from the United Aircraft Corporation?

MP: All our current projects are running as part of the innovative solutions implementation project, and we cover a number of diverse areas. For example, if we consider the Sukhoi Superjet 100 project, its aircraft control system is capable of warning the pilots of every possible emergency and thus does not let the aircraft actually get into an emergency situation. It's essentially an active aviation safety system whose control system capacities can make up for practically any pilot mistake. I think that this is a solid innovative solution developed through the joint efforts of the Central Aerohydrodynamic Institute, Sukhoi, and our German partner Liebherr. Certifying this solution was also quite a challenging task, it was carried out by experts of the Aviation Register of the Interstate Aviation Committee, as well as other certification centers, and these experts also contributed to the final tuning of the system. Speaking of the innovations we are planning, I can mention the new all-composite wings we are developing for this model and for all future modifications of the Sukhoi Superjet 100. I believe that the fact that we're developing the wings based on infusion technologies as opposed to the technology used by Boeing and Airbus in their Boeing 787 and A350 means that we have our own approach which is innovative. We certainly keep working on the avionics system which will have an open design, which will allow us to develop an all-purpose platform that can be customized to the aircraft's tasks over its life-cycle, without affecting its key functions. I think this is also a step forward which complies with the most advanced requirements of the industry. I could talk more about the projects we're working on, but the main thing is that we make it our goal that all our projects comply with tomorrow's rather than today's level of market requirements.

RT: What impact will the arrival of the fifth generation of fighter jets have on the concept of military action in the air?

MP: I'm sure it will have a serious impact, since the fifth generation of jets will have a new level of stealth, and higher military capacities and range for air-to-air and air-to-surface missiles. These jets will be able to fight the enemy while staying out of the killing zone. I'm sure that the introduction of fifth-generation jets will also improve the performance of fourth-generation jets which will perform within the same group of jets. I think that the demand for new advanced jets will not only open the market for the fifth-generation jets, but will also extend the lifetime of the fourth-generation jets via new modifications, because mixed jet groups of these two kinds will have a very high performance level.

RT: So, fifth-generation jets – are they produced entirely in Russia, or are there still some parts or some technology that you import?

MP: Those jets that are now being tested are 100 per cent produced in Russia. But in view of the international nature of our program, we signed a contract with India in December, we'll co-operate on conceptual design with them, and this obviously will result in the fact that at some stages some non-domestic equipment will be involved. I think that this is quite in line with the spirit of the times, and I'm sure that we'll find ways of co-operation with our overseas suppliers which will allow us to guarantee that the tasks set by the customer are completed. There's nothing wrong with this. We're making our aircraft, both civil and military, not only for the domestic market, but for the international market, too. And this makes us look for the best solutions which would meet all the tough requirements set by customers.

RT: You mentioned a contract signed with India on a fifth-generation fighter jet project, while there are reports saying that China is planning to produce an exact copy of the Russian fighter jet – is that true, and if so, were you taking into account such a competitor?

MP: There have been some reports recently in the media saying that China has started testing its own fighter jet of the fifth generation. This probably means that the investment made and the goals set by the Chinese aircraft industry cover not only civil aircraft manufacturing, but fifth-generation jets as well. So I think it'll make our life more interesting. Competition always makes you develop further, be more active.

RT: Could you perhaps expand a bit more – how would the market react, should a Chinese fighter jet emerge?

MP: Making such complex products as fifth-generation fighter jets is a very complicated and time-consuming business. I think that the market will react to the products it's offered. I think that we are quite ready to compete with our overseas partners, and this applies to competing both with the most advanced American aircraft, and with the new projects by our Chinese colleagues. I do not think that we will lose our position on the market. Our goal is to convince the market of the advantages of the aircraft we're developing together with our Indian partners.

RT: Do you think the international production model will become the basis for the military production model of the future? Like the Eurofire which is successfully produced in a number of countries, for instance?

MP: I think that today, considering the project costs and the limitations on the overall number of jets delivered by military forces in different countries, the joint production model definitely has a future. As to whether it will prevail, I think it very well may, as there are sufficient grounds for this. With time we'll see whether any new joint projects of this kind appear, or whether one-country production projects still prevail. I think that the tendency is developing in favor of international joint projects.

RT: What in your opinion will define the future of the Russian military aircraft production industry? Co-operation or competition?

MP: I think both. On the one hand, we'll compete with our overseas partners, I'm sure we'll be able to compete with the best American aircraft, and China is now building a powerful aircraft industry, we'll certainly compete with them, too. But on the other hand, I think that while competing we'll build up co-operation with our strategic partners. I already mentioned our partnership with India. I think that co-operation and competition will go hand in hand and define to a large extent the future of the military aircraft production industry.

RT: Thank you very much.

MP: Thank you.

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