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.