New engine announced by Aviadvagatel but substantial funds required to complete programme

Published: 2/8/2000

After a visit in late January to Perm, by executives from United Technologies Corporation, it seems that engine design bureau, Aviadvigatel, is taking the commitment by United Technologies to continue to invest in Aviadvigatel, Perm Engine Company and Iskra-Energetika, through its daughter company Pratt& Whitney, as encouragement to announce the start of a new regional aircraft jet engine, designated the PS-9. According to Aviadvigatel, the new engine will be specifically designed for regional aircraft of up to 100 seats and those carrying 10 tonne payloads of cargo. It seems likely that the first programme to use the engine as its power plant could be the new Ilyushin Il-214, currently being designed by the Moscow bureau. At the time of the Il-214"s announcement, in April 1999, a number of power plants were being considered, including the PW 6000. According to sources, the programme is likely to cost $170m to complete and the company is looking for finance. It believes that the PS-90 has given it considerable experience in designing this type of engine and is clearly suggesting that there is a high degree of commonality between the two programmes. The major design challenge for the new engine is reported as being a new ‘gas generator". The producer of the new engine seems likely to be Perm Engine Company, in which P&W is a substantial shareholder, having 25% of the company. To date it has invested over $125m, with $30m being invested in the company during 1998-99, according to George David Chairman and CEO of United Technologies. He also undertook to make a significant commitment in 2000. There still remains the problem of finance and Aviadvigatel will certainly require substantive outside backing, as its position as a design bureau isolates it from the only cash flow of any significance in the Russian engine industry, maintenance and overhaul. Business in this area is currently sustaining Perm Engine Company and has led to the proposal to merge the two Perm-based entities into one integrated design and production company, although the recent negotiations have ground to a halt on the back of Federal Property Fund concerns about having its interests diluted by a merger of the two joint stock companies. In the last three years, with the help of P&W, Perm and Aviadvigatel have proved their ability to make a reliable engine conforming to western standards, but to develop an engine of this size, for a programme not yet underway, in the face of steep competition from foreign suppliers in this fast growing market segment, suggests that perhaps the talks with P&W have given the engine designer something of a boost. Associated articles: www.concise.org 7th April 1999; 28th January 2000

Article ID: 1401