FULLY UPDATED JULY 22 – Russian lessor Avia Capital Services (ASC), fully owned by state-owned conglomerate Rostec, plans to establish a dedicated leasing branch in the Ulyanovsk area. While the new company will initially be focused on helicopters, it is expected that it will expand to the newest commercial aircraft. The new company was announced at the Moscow International Airshow MAKS2021. MAKS updates on Russia’s latest airliners.
While details are lacking, the announcement seems to converge some previous developments. Some 900 kilometers southeast of Moscow, Ulyanovsk is not only the city where the composite wing of the Irkut MC-21 is produced but also one of the regions that Aeroflot Group wants to develop until this decade is out. In the 2028 strategy that was announced a year ago, subsidiary Rossiya Airlines is instructed to develop its network out of Saint Petersburg to elsewhere in Russia to bypass Moscow while at the same time it must strengthen its position as a feeder airline for Aeroflot’s Moscow operations. For this, Rossiya will become a center of excellence for Russian-manufactured aircraft and take delivery of the latest types, including the Irkut MC-21 and Sukhoi Superjet 100.
Rossiya set to become launch operator of the MC-21
Rossiya Airlines is set to become the first operator of the MC-21 when it takes delivery of the first of six leased aircraft around mid-2022. At the airshow, Irkut and Rossiya have signed a Memorandum of Understanding to prepare the type’s entry of service. The airline itself hasn’t ordered the Irkut but will likely source them through parent company Aeroflot, which has fifty MC-21s on order through… Avia Capital Services.
Ten years ago at MAKS2011, ASC was one of the first to order the Irkut, 35 -300s and fifteen of the smaller and yet-to-build -200s. The lessor converted 35 options into firm orders in 2012. On its side, Aeroflot signed commitments for fifty MC-21 in 2010 and 2012, confirming these in February 2018. The aircraft will be leased from Avia Capital on 12-18 year contracts. Half of them will get Pratt & Whitney PW1400G-engines, the other half Russian Aviadvigatel PD-14s.
If Avia Capital will order additional aircraft for the Ulyanovsk plan is not confirmed but most likely, as Aeroflot’s 2028 strategy includes the ambition to grow the number of Russian-made airliners to at least 235. This includes the MC-21, but also the Ilyushin Il-114-300 turboprop, and the Superjet 100, for which Rossiya signed a leasing arrangement for fifteen on the first day of MAKS2021. This partly confirms the new options for Russia’s latest airliners.
By the way, Avia Capital has also 35 Boeing MAX 8s on order and hit the headlines after it filed a lawsuit in August 2019 against the American OEM. It accused Boeing of fraud and breach of contract when it sold the lessor an aircraft that was not safe for flight, as the two fatal MAX crashes showed. Avia Capital withdrew its claim for $115 million in October and deferred deliveries of 33 MAX to 2022-2024.
First leasing contracts for Il-114-300
More MAKS updates on Russia’s latest airliners. The Ilyushin Il-114-300 secured its first leasing contracts at MAKS2021. GTLK, which already had a provisional commitment for fifty aircraft, has leased three of them to regional airline Vologda Aviation Enterprise, it announced on July 21. Deliveries are planned for 2023. This seems to make Vologda the launch operator of the revamped aircraft, which has started flight testing last December.
On July 22, UAC confirmed that GTLK has also signed an LoI with Aurora Airlines for 19 turboprops for delivery from 2023. The announcement was reported on the first day of MAKS by FlightGlobal but was confirmed on day 4. Aurora has a fleet of aging Bombardier Dash 8s. The Ilyushins will be used for fleet renewal and to further develop the regional network in the far East of Russia to often rugged local airports. Aurora signed a leasing contract for eight Superjets on Monday.
UAC first deputy general director Sergey Yarkovoy said that the leasing agreements improve the market outlook for the Il-114-300: “At the start of the program, we estimated the market in the amount of 100 aircraft, due to special versions, the potential need can be increased to 150.”
Market outlook revised downwards to 38.100 aircraft
During a ‘Markets of the Future’ conference, UAC presented its updated market outlook for the Russian commercial airline industry. The conglomerate expects that worldwide air passenger travel until 2040 will grow annually by nine percent. There will be a need for 38.100 aircraft over thirty seats. The narrow-body segment accounts for 27.100, of which 17.700 are in the 166-200 seat category in which the Irkut MC-21 sits nicely. This is 46 percent of the entire demand for airliners. Regional jets account for 3.600 of the market, wide bodies 5.600, and turboprops 1.800.
The forecast is down on that for 44.300 in the 2020 outlook, which was more specific. A year ago, UAC said the 166-200 seater market would grow to 20.476 aircraft, with another 3.443 aircraft in the 135-165 seater market. A combined 7.546 aircraft were forecasted for the 200-301 and 301+ segments. The 61-95 segment would cater for 1.998 aircraft, the regional jet segment with 91-110 seats for 1.376 aircraft. The turboprop market with 61+ seaters would accommodate 1.559 aircraft.
Panelists discussing the latest market outlook at MAKS2021. (MAKS)
New technical support facility at Sheremetyevo Airport
Also at MAKS was the signing of a preliminary agreement between Irkut Corporation-subsidiary RapartServices and Moscow’s Sheremetyevo Airport. The land sublease agreement that was signed on the second day of the show covers the construction of a technical complex near the airport’s third runway for the support of the MC-21 and SSJ100. “It is important for us to increase our opportunities for after-sales support in anticipation of the arrival of MC-21 aircraft to Russian airlines and the expansion of Superjet 100 fleets. The new complex will allow us to solve these problems”, said Yuri Slyusar, General Director of United Aircraft Corporation (UAC).
The lack of technical support, especially to foreign customers, has been one of the reasons that Sukhoi has failed to hit the ground with western airlines. For the MC-21 to stand a chance of being purchased by the West, Irkut will have to get its aftersales and technical support in order. Irkut has been cooperating with Europe’s EASA on the certification of the MC-21 in Europe and is optimistic about receiving this by mid-2022. So far, no European airlines have shown an interest in the type.
Irkut Corporation has also secured funding for large-scale manufacturing of structural parts of the MC-21. Novikombank has provided RUB 20 billion (some $270 million) to the airframer, which plans to ramp up the capacity of the new airliner to three per month and later to six per month. The first production aircraft with Russian-manufactured composite wings is under final assembly in Irkutsk. It is said to be for Rossiya Airlines, which as mentioned here will become the launch operator.
UEC to study hydrogen engine
In another MAKS update on Russia’s latest airliners, Novikombank also provided funding to UEC for large-scale production of the new PD-14 turbofans. The engine maker is busy designing and testing various engine programs like the PD-8 for the Superjet-NEW and the PD-35 for the CRAIC CR929 but the Russians are looking further into the future too.
On July 22, UEC said it has established a working group to develop powerplants for aviation and ground operations that will run on hydrogen. The work is still very much in the early stages and UEC is collaborating with scientific institutes and industry partners. “We are considering two main technologies: direct combustion of hydrogen fuel in modified gas turbines and electrochemical conversion of fuel into electrical energy using fuel cells”, said UEC General Designer Yuri Shmotin.