Prime Minister Vladimir Putin chaired a conference on expanding civilian aircraft production in Ulyanovsk
Vladimir Putin's introductory remarks at the conference:
Good afternoon,
Today's conference deals with expanded production of civilian aircraft. In effect, we are continuing our discussions of various Russian economic sectors.
The aircraft industry ranks among those hi-tech sectors where Russia's industry and science can effectively realise their competitive potential and ensure the country's worthy positions among leading global manufacturers of passenger and transport planes.
Today, we are going to focus on civilian aircraft because warplanes are a separate issue. We have been discussing warplane production on a regular basis and will continue to do so in the future. This time, however, we will examine the civilian aircraft sector. In this connection, I want to note that Russia, the world's largest country, cannot do without a ramified airline network. The recent AiRUnion crisis involving cancelled flights and stranded passengers proves that this is a critical and sensitive national issue.
The Russian aircraft industry must have its own production facilities, maintenance and repair centres for the sake of sustainable development.
We have just visited the company Aviastar. The workers of a local shop have noted that the aircraft industry is "raising its head." It is nice to hear such statements. Indeed, the situation is improving on 2002 when this company and other sectors were in the lurch. It is very good that the people are feeling this.
However, we realise that it is still too early to talk about successes, because there are more problems than achievements. The industry has just started overcoming a long-term all-out crisis.
In 2007, major Russian aircraft plants manufactured only six planes. It is intended to build 15 aircraft by late 2008. By the way, there were plans to assemble 12 planes in 2007. But those plans remained on paper. I am ready to explain this by mitigating circumstances linked with the establishment of the United Aircraft-Building Corporation (UABC) and other problems that we know of. Nevertheless, we are only starting out. Although a positive trend is manifesting itself, such unimpressive production volumes cannot saturate even the Russian market, let alone global markets.
Hard and painstaking work will be required in order to accomplish our long-term objective, namely, mass-producing competitive civil planes. Maximum concentration of resources and effective state support are also essential.
This is why we started establishing the UABC that consolidates private and state assets manufacturing, designing and selling military, civil, transport, and unmanned aircraft two years ago.
It took a lot of time and effort to set up the UABC. I hope that it will become a cost-effective performer. We will discuss this issue in greater detail today.
We must assess the implementation of production plans and a long-term UABC development programme.
I must say that the UABC plans to manufacture 434 planes in 2008-2012. If such plans are realized, the UABC will become an important element of the global aircraft industry, matching the parameters of our main international rivals. This task is quite feasible. Let's discuss this issue in greater detail once again today.
And now a few words about the most serious and crucial issues and problems.
First, we must stop saying that we are ready to manufacture virtually the entire product range. Such projects and attempts to lobby for obviously hopeless projects will only cause us to lose time and money.
I want to remind you that we have already decided on the entire range of planes to be manufactured by the national aircraft industry. This is based on expert assessments and our real potential. In effect, we have found competitive market niches where we can succeed.
We have met on many occasions, listening to experts. I remember when Alexei Fyodorov took the floor. We also met with general designers who spoke their mind on the issue. I repeat, the relevant decision has been made and now we must begin implementing it.
As far as general designers are concerned, unfortunately, we lack a permanent platform for dealing with people who generate all the main ideas. This concerns not only the aircraft industry but also other hi-tech sectors. I suppose that we should set up a council of general designers working in hi-tech sectors under the Prime Minister's auspices.
My colleagues and I will discuss this idea, subsequently moving to implement it.
We will hit the right track if we discuss efforts to upgrade such airliners as the Tupolev Tu-204, the advanced MS-21 plane, the Sukhoi SuperJet (SSJ) regional aircraft family and other planes that will make our aircraft industry competitive.
By the way, the SSJ-100 medium-haul airliner, which performed its maiden flight this May, is currently being tested. I hope that Mikhail Pogosyan will say a few words about this.
The UABC and state-support programmes must focus on advanced models. In 2009-2011, over 130 billion roubles ($5.08 billion, or €3.6 billion) will be spent on developing, upgrading, production, purchase and leasing of civilian aircraft. This is an impressive sum. I only want to know what share of these expenses will go to R&D and production, and what share will go to purchase and leasing. It would also be interesting to know the share of leasing expenses as regards Russian and foreign planes.
I believe this is an important issue, all the more so as we have already passed resolutions on some aircraft types. We have decided to abolish import duties for nine months on short-haul aircraft seating up to 19 passengers and long-haul planes seating over 300 people and to simplify their imports. If we have this in mind, then we must know the share of foreign-plane leasing allocations.
People, including myself, often hear proposals to reduce or even charge zero import duties on foreign aircraft. I realise that we are not mastering aircraft production quickly enough. I understand the demands of our carriers. This extremely responsible decision seems possible if our producers continue to act slowly. However, we must look before we leap. Consequently, this issue requires additional examination.
Furthermore, we must focus on aircraft-engine and component production. In the last few years, their prices have been growing above the rate of inflation. Production and supply deadlines are absolutely unacceptable. The lack of engines is already hindering the UABC's civilian-aircraft production programmes.
We have recently decided to merge numerous aircraft unit-and-component manufacturers with the Russian Technologies State Corporation (Rostekhnologii), whose managers must ensure that the national industry starts making inexpensive and up-to-date products.
If no tangible results are achieved within the set deadlines even in this case, then we will have to abolish import duties on all foreign components. Practical experience will show whether we will have to do it or not. However, we have scored positive results in some other sectors. Such practice compels domestic producers to roll up their sleeves and to start fighting for the national market.
I want to name another problem in order to wind up "the customs issue". Aircraft components must be delivered in 24-48 hours for subsequent servicing and repairs in line with international standards. We have once again talked to experts about this, while visiting corporate workshops and inspecting technology. Our export procedures sometimes require up to 70 days. It would be impossible to enter the global market on a large scale, unless the situation is rectified.
Third, we must streamline the UABC's organisational structure and set up a national aircraft-building centre in the town of Zhukovsky near Moscow. We must also discuss the integration of key Uzbek and Ukrainian aircraft-industry assets into the UABC in line with mutually acceptable terms. We need companies that will expand the UABC's potential and resources, rather than debt-ridden entities with an obsolete infrastructure.
And, finally, we must do our best to implement the UABC's retooling programmes, to introduce state-of-the-art production-control systems, to cut back on production costs, to attract young engineers and blue-collar workers. It turns out that the switchover to digital equipment yields an impressive economic effect and reduces production cost by as much as 30%.
The administrations of Russia's constituent entities could play an important role in accomplishing this objective. This implies higher vocational-training standards and the priority right of regional-plant workers to take part in regional housing and social programmes.
In conclusion, I want to stress that we will have to tackle the national aircraft industry's problems in conditions of tough competition against global producers. Time is the key factor here. Neither national, nor foreign flag carriers vying for domestic markets will wait for Russian planes forever. Figuratively speaking, the Russian aircraft industry has a very short runway.
Consequently, our plans must be absolutely realistic and well thought-out. The number of manufactured and sold airliners and production profitability, rather than the number of aircraft mock-ups, prototypes or tests, must serve as the main criterion of the UABC's cost-effective performance.
Let's start discussing the main subjects of our conference.
