Today Irkut rolled out their MC-21. It’s been something many of us have been waiting for. The roll-out was on par with anything seen at the big four western OEMs. (IRKUT supplied us with great images)
The company showed off its first MC-21-300. The program cost ~$4.5Bn, of which 30% has come from Irkut and 60% from government. Additional funding has also come from risk-sharing partner like suppliers. FlightGlobal has a good story on the roll out.
Yuri Slyusar, United Aircraft Corporation CEO (Irkut’s parent) noted that competing with Airbus and Boeing won’t be easy. “But we’re sure that the MC-21 is now the most competitive aircraft in its class and believe it will meet the demands of passengers and airlines. For budget airlines too, we hope to demonstrate the economic side of this project. We have our own low-cost airline Pobeda here in Russia, which could be a launch customer among low-fare companies”.
Airbus and Boeing have nothing to fear from the MC-21 from a market point of view. EIS is planned 2018, and initial production target is 72 aircraft a year by the end of the decade. Following the MC-21-300 will be the smaller MC-21-200. Airbus and Boeing might be producing close to that amount monthly.
But not to detract from the accomplishment. Only nine months ago, this was the state of the aircraft.
Irkut’s SVP marketing and sales Kirill Budaev noted “If you look at Airbus, their sales are best with the A320 and A321 and the MC-21-300 is targeted at this niche. We have a list price which is 15% less than the A320ceo. For the MC-21-300, the list price is $91m while for the A320 it’s more than $100m”.
This is where the rubber hits the road – Irkut will be squeezed on price to compete, but they do not have the production capacity to support sales if the the aircraft is a hit. It certainly has the numbers and could be a hit. But as we have seen the existing supply chain is struggling. Airbus and Boeing are already hampered delivering fast enough – and this is before a ramp up in production. Would any company in the shrinking global aerospace supply chain fear annoying Irkut? Probably not. Therefore it is crucial that Irkut develop a Russian-based supply chain it can discipline and manage. However, that will still mean much slower deliveries. There is no easy way forward here.
Technically the aircraft looks great: Pratt & Whitney’s GTF engines, composite wings and an integrated flight deck with full fly-by-wire flight controls. This is state of the art, particularly the wing . But the aircraft must delivered in volume, on time and with no supply chain hiccups. Since the MC-21 is a market entrant, the hurdle is higher than for the existing players. If you think the hurdle for Bombardier has been high, it is even higher for Irkut. And Irkut does not have the resources of Bombardier.
Mr. Budaev says they forecast a need for 21,060 new aircraft in the seat segment covered by the MC-21 family over the next 20 years. First flight is still planned for this year. In summary, kudos to Irkut for working through the tough economic and political times to show off a very impressive aircraft. It hits all the right technical buttons.
But even as they enjoy the well deserved party today, the next phase of the struggle starts tomorrow. First flight has be this year or the program’s credibility gets strained some more. And the industrialization of the program brings a host of challenges. As we have seen with Superjet, production in Russia is tough. Irkut has a lot of work to do yet.
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An unexpected shift in Russian politics, back towards better commercial and political relations with the West, could put the MC-21 in a much better place.
Such a shift seems unlikely now, but the world is full of surprises.
Though the MC-21 aircraft reflects the will and capacity of the Russian aerospace industry as well as the intent of their political leadership to maintain an independant capacity in this critical field of the technology it is of paramount importance to develop a good client support not only in Russia but in Asia and in the western world as well.
Considering that the market is under control ot the two large manufacturer -Boeing and Airbus- Irkut and their partners as well as their political leadership must concentrate their efforts in providing their customers excellent pricing policy as well as the assurance that their operations will be thoroughly supported across the world.
also, as the actual duopoly of this market and their influence on all forseeable customers as well their influence on the vital part originating from many western manufacturers, Irkut corporation must also ensure that a second source of reliable line of product is available to customers to secure that the availability of those vital parts of this aircraft is not hampered by competitors or not altered by political or geopolitical concerns.
As Both Airbus and Boeing already either financially control or closely monitor major parts of the operations of those vital part manufacturers there are stong evidences that all competitors, and particulary, Russians and Chineese as well, must take appropriate actions to protect their global industrial interest to counter the adverse effects of the bi-polariasation of this industry as to avoid that this market be used as as a politicall lever to counter world wide trade and commerce regulations based on political and social differences between these countries.
Its really a beautiful machine, loaded with cutting edge tech. But can they build it in volume. The modest goal of 72 a year even seems like a pipe dream given the manufacturing struggles with Superjet. Add all the composite tech and one really has to doubt if they can get to 6 per month. The Russian aerospace industry has an amazing history. I hope it can score a home run with MC-21