It’s not been happy flying for Ukraine’s biggest state-owned aircraft manufacturing company Antonov in recent years.
The company produces up to three aircraft in a good year, and saw relations with many of its Russian suppliers severed after the launch of the Kremlin’s covert war on Ukraine in the Donbas two years ago.
“Our aircraft industry is in a very poor condition, because the production of large aircraft – Antonov aircraft – has fallen almost to zero,” said Ukrainian aviation expert Yuliy Kyseliov. “And parts suppliers stopped production, as there’s no demand.”
Getting off the ground
The international aircraft market is a competitive one, and world leaders Boeing and Airbus, which both offer modern, innovative aircraft with full services, dominate it. Ukraine’s Antonov, which is trying to win market share in the cargo and transport plane segment, is finding the going rough, experts say.
To make Antonov’s production profitable, it would have to build 12-15 aircraft per year, Kyseliov said. But in a typical year Antonov only makes three planes at most. In 2016, not a single aircraft has yet taken to the air from Antonov’s factory.
Antonov refused to comment for this story.
The industry’s woes are partly due to the fact that Antonov’s planes are assembled from parts made not just in Ukraine, but in Russia.
Antonov also produces passenger aircraft, and hoped in the past to win a share of the regional passenger aircraft segment of the market. But in Antonov’s enforced absence, Brazil’s Embraer and Canada’s Bombardier have captured this market, Kyseliov said.
And Antonov is being beaten in head-on confrontations for specific market niches by other companies as well.
Antonov’s 100-seat An-158 regional jet, an updated version of the An-148, has been outpaced by Japan’s Mitsubishi Regional Jet (MRJ) – a twin-engine regional jet aircraft seating 70–90 passengers, which has similar specifications to the An-158. U.S. low-cost airlines have already placed orders for 120 MRJ aircraft.
“Mitsubishi began to develop its airplane five years later (than Antonov), but entered this market with good conditions, support, and service offers,” Kyselov said.
The passenger aircraft segment is almost saturated just now, according to the head of the analytical department of Concorde Capital Oleksandr Parashchiy. But he sees prospects for Antonov’s cargo aircraft, in particular its An-178 transport plane.
However, even if the Ukrainian manufacturer gets an order for the production of these aircraft, the company’s factory might not be able to fulfill it.
“Generally, we produce so few aircraft that it is not even clear whether, if Ukraine did win a big order, it would be able to carry it out,” Parashchiy said.
Nevertheless, on June 7, Antonov signed a Hr 1.07 billion ($42.8 million) deal with Canadas’s CMC Electronics Inc. to supply equipment to produce ten of their An-178 cargo aircraft for an Azerbaijani company Silk Way Airlines.
But with so few orders in the past years, experts doubt that the company will be able to build up sales momentum even after the Azerbaijani order.
“When a buyer comes, the first thing he asks is: ‘Who else bought your aircraft?’” Parashchiy said.
Antonov’s first step for revival should be winning the internal market, Parashchiy said. However, the state has no demand for aircraft, and the few Ukrainian airlines prefer buying pre-used Boeing planes.
Motor Sich runs
While Antonov is struggling to make headway, another Ukrainian aircraft company, the Motor Sich helicopter engine manufacturer “is doing quite well, despite the break in relations with Russia,” Kyselov said.
In June, Motor Sich produced a batch of engines for the Austrian manufacturer Diamond Aircraft.
“In terms of characteristics and capabilities of these engines (produced by Motor Sich) are the best engines for helicopters in the world – and that’s a fact,” Kyselov added.
According to him, Motor Sich was also on the verge of winning a tender to supply helicopter engines to the U.S. military, but failed because of its dependence on a Russian supplier.
Meanwhile, the company has seen success in upgrading Soviet-era military helicopters, the Mi-2 and Mi-8. With its upgraded engine, one of the Ukrainian military’s Mi-8s in August 2013 broke world record for the highest horizontal flight – 9,150 meters. And next, Motor Sich plans to sell Kazakhstan a license to carry out modernization work on multi-purpose helicopters, the Interfax news agency has reported.
Thinking small
But Ukraine doesn’t just produce passenger aircraft costing millions of dollars – companies here have also developed some smaller, cheaper planes. Kyiv-based private company Aeroprakt now produces two-seat ultralight aircraft with weights up to 450 kilograms, for only $50,000 each.
“This is a completely different segment, where the technology is much cheaper, and there’s a demand from a lot of countries,” Parashchiy said.Aeroprakt’s design bureau of 70 people, which was founded by former Antonov engineers, produces 11 types of aircraft. Since its launch in 1991, Aeroprakt has manufactured hundreds of aircraft for customers all over the world.
Since its first aircraft was sold to Hungary in 1993, Aeroprakt has been producing up to 80 aircraft a year. Of those, only one or two planes stay in Ukraine every year – mainly for testing. The rest have been exported worldwide.
“From the very beginning, our target was the foreign market,” aircraft designer and Aeroprakt co-founder Yuriy Yakovlev said. “At the time (we started) there was no domestic market, people had no money… especially not for private aircraft.”
So Aeroprakt has sold hundreds of its aircraft abroad instead – from Poland, Spain, and other European and Post-Soviet countries, to Nepal, Cambodia, other Asian countries and Africa. In Australia, for example, several Aeroprakt planes are used to herd sheep. In Georgia, their planes spray crops, while in Poland the planes were used by the patrol police in Wroclaw.
“If you don’t sell across the planet, you won’t survive,” Yakovlev says. “If Boeing had sold only within the U.S., it would have gone bankrupt.”
People buy Aeroprakt aircraft mainly for pleasure, Yakovlev said. But their planes are also suitable for flying schools, as they are “simple, reliable, durable and affordable,” he said.
Yakovlev and his colleagues’ former experience as Antonov engineers had helped them gain a reputation in the industry. But he has little optimism for large-aircraft manufacturing in Ukraine.
Making and testing a prototype represents only a tenth of the work required to bring a new plane off the design board and into mass production, Yakovlev said. And to make a profit on any new plane, Antonov would have to sell at least 60 of them, he added.
“I see good machines, but don’t see profitable production,” Yakovlev said
