The growing impact of Western sanctions on Russia may actually help IRKUT.  Take a look at this story.

The MC-21 is, in our view, an aircraft with a lot of promise.  The size and layout of the aircraft seems right to us.  But having seen the same mockup for years now at air shows and not hearing any news about progress is frustrating.   First flight is planned for next year or perhaps the year after that.

With 257 orders and 84 options, the aircraft is not without a following.  The customer base is Russian for now.  The aircraft will offer the GTF which should make it a compelling option in 180-220 seat market; right in the 757 sweet-spot.

But project progress seems agonizingly slow.  As the Moscow Times story states, Russian aerospace has been suffering from underinvestment.  This is a chicken and egg thing – Russia’s airlines can more easily acquire western aircraft, which crimps Russia’s civil aerospace industry.   Were IRKUT to be funded and able to accelerate its MC-21 project the order book might be larger.  After all, airlines may have placed orders for MC-21 but they keep taking deliveries from Airbus and Boeing.  Are the MC-21 orders face saving place holders? Mr Putin in the past has been vocal about Russian airlines buying western equipment.

With the Russian state now apparently stepping up to assist IRKUT and Oboronprom we might see Russian projects like the MC-21 progress faster.  Western sanctions may be the catalyst Russia’s aerospace industry needs.

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