Yulia Mironova, Ulyanovsk
Vladimir Putin ready to help airline carriers at the expense of aircraft manufacturers
Import duties for foreign aircraft and component parts may be reduced if domestic aircraft manufacturers fail to meet their targets, said Prime Minister Vladimir Putin during his visit to Ulyanovsk yesterday. These coercive measures will not hinder the country's aircraft industry, but will encourage air transportation growth, the Prime Minister said during the meeting dedicated to civil aircraft production. Participants didn't seem too sure, however, that Russia's aircraft industry has a bright future ahead.
Vladimir Putin's visit to Ulyanovsk had been previously scheduled for mid-August but was postponed due to the war in South Ossetia. After the visit, the Prime Minister returned to Sochi. He now has a definite style of visiting regions. Before, Vladimir Putin's visits were supervisory, with local governors reporting on their work at government meetings, but now federal issues are addressed rather than regional ones.
Ulyanovsk was chosen as the venue for the discussion of civil aircraft building. The city has two airports and is home to a UAC (United Aircraft Corporation) member, the Aviastar-SP aircraft factory, which produces half of Russia's total output, with six planes manufactured last year.
The Prime Minister's plane landed at Vostochny Airport, which belongs to Aviastar, and all subsequent events were held on the latter's premises. Mr Putin, accompanied by Deputy Prime Minister Sergei Ivanov and regional Governor Sergei Morozov, visited the main assembly shop first, briefly examining the pieces displayed there.
The Prime Minister met with a worker delegation, asking them his traditional question, "How's the pay? Around 11,000 roubles, I presume?" It turned out that the wages had already been raised. "It is now at 12,334 roubles" ($452), the head of the local trade union reported.
Satisfied with the management's promptness, the Prime Minister examined the company's product, the aircraft. At a presentation held inside the cargo compartment of an An-124 Ruslan, Prime Minister was filled in on the planned creation of a special economic port Zone around Vostochny Airport.
Vladimir Putin also met with Cuban guests, who paid an unexpected visit to the plant, seeking to buy Russian planes. The Cubans expressed gratitude to the Prime Minister for assistance in disaster relief after Hurricane Gustav. Afterwards, Mr Putin had a very informal conversation with Ulyanovsk Higher Civil Aviation School cadets.
"A vast country like Russia cannot do without flight communication. It is unclear, though, whether we will rely on domestic or foreign manufacturers," said the Prime Minister at the beginning of his speech. "It's high time we stopped saying that we are ready to manufacture almost anything", Mr Putin added. He noticed that it had been decided to define the line of aircraft to be produced. "We should devote UAC efforts and state support to advanced aircraft development and production." Within three years, 130 billion roubles ($4.7 billion) will be allocated for this purpose. "I would like to know what we are going to spend this money on, whether on domestic production or support of foreign aircraft leasing."
Given that we are not going to manufacture just any kind of product, a constant zero duty could possibly be introduced for certain types of aircraft to improve the competitiveness of domestic airline carriers. Currently, temporary zero duties are effective for foreign-made aircraft with a capacity below 19 and over 300 seats.
After the meeting, Elvira Nabiullina, Economic Development Minister, told the journalists that her agency is preparing a draft Government decree to introduce zero import duties for aircraft with a capacity below 50 seats. "We have agreed on the zero import duties for aircraft with a capacity below 50 seats. In the near future, we will prepare a corresponding Government decree, which is expected to be effective January 1, 2009," Elvira Nabiullina said, adding that no zero duties will be introduced for foreign equivalents of Russian Tupolev Tu-134s and Tu-154s.
Mr Putin also dealt with aircraft engines shortage, which hinders UAC plans. Major engine manufacturers have already been transferred to Russian Technology, now it's up to the latter's managers. If no satisfactory results are eventually achieved, the Government is prepared to cancel import duties for component parts. Here Mr Putin sounded somewhat sceptical about the prospects for Russian Technology. The Prime Minister suggested considering integration of Ukrainian and Uzbek companies into the UAC. The possible integration should be "acceptable for our foreign partners and profitable for Russia," Vladimir Putin stressed.
"The ‘runway' for the Russian aircraft industry to ‘take off' is very short," the Prime Minister concluded.
