Russian Aircraft Industry Suffering from Lack of State Funding

Russian Aircraft Industry Suffering from Lack of State Funding

The total volume of goods, put out by the Russian aircraft industry in 2000,
amounted to R73.8bn, profits amounted to R17.1bn and the growth rate of
production was 41.4 per cent.

These data were told on Friday to reporters at the government information
directorate which told them about a Russian government meeting, examining the
question on restructuring and developing the aircraft industry.

Revenues to budgets at all levels and to social funds totalled R16.6bn as a
result of operation of the aircraft industry in 2000. This points to high budget
effectiveness of the industry: each rouble, invested from the federal budget,
earns R2.9 in revenues. Out of products, manufactured by the country`s aircraft
industry in 2000, military aviation and armaments received 69.5 per cent, civil
aviation - 14 per cent, the civil products and consumer goods sector - 17 per
cent.

Besides, the aircraft industry enjoys a high export potential. This is true,
above all, of military manufactures, the export volume of which hit 1.33bn
dollars in 2000, topping the level of 1999 by over 60 per cent. This figure is
also expected to rise in the mid-term perspective. The export share of civil
aviation is also quite high: the volume of its production in terms of value
added up to R10.3bn. Out of the total, deliveries to countries other than former
Soviet republics were responsible for more than 50 per cent. Helicopters which
are in ready demand, make up the bulk of the export: more than 40 aircraft are
exported every year.

However, the process of privatization and liberalization of economic relations
in the industry, which was carried out in the 1990s, has not yielded expected
results, claimed the Russian Aerospace Agency Rosaviakosmos. Production
facilities are loaded only for 10-15 per cent with the state order for the main
types of aviation machinery and weapons. The financial and economic position of
most factories is maintained at a minimum acceptable level thanks to export and
orders from the fuel and energy complex as well as the car industry.

Serial production of aircraft for home consumption is made by just a few firms.
Delays with budget financing and lack at factories of their own working capital
have resulted in huge debts.

Rosaviakosmos claimed that a crisis situation has developed in the aircraft
industry, which was caused by the lack of a clear-cut policy in the development
of national aviation, drastic reduction in defence orders and their funding.
State funding for research and development as well as for purchase of aircraft
plummeted to less than eight per cent of previous levels.

ITAR-TASS

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