Short-term help from the region to produce the An-140 (454 words)

Published: 8/14/2001

Despite reports in June from Aviakor (based in Samara) of the suspension, due to lack of funding, of the production preparation programme for the An-140, Vladimir Doronin, Head of the Department of Industry of the Samara region, announced that the regional administration is in the process of putting together a Rb150m ($5m) funding package for the completion of the first of five An-140 air frames at the plant. Doronin, quoted in the local press, says that the funding will be in the form of a loan to Aviakor from the regional administration. The plant will then use its own capital to complete the first Aviakor An-140. The completed aircraft will be leased to Samara Airlines, which will repay the loan to the regional administration. The region will have first call on the aircraft. It is unclear exactly what Aviakor will get out of the deal, as it urgently needs cashflow. It is, however, more evidence that the regional government is desperate to keep the plant open: a desperation that recently led to the region's governor suggesting a merger of the plant with Aviastar and KAPO, as it has become obvious the majority shareholder, Siberian Aluminium, has no plans to commit further capital to the failing plant. Reports in July also suggested that the region and the plant's management, in the form of General Director, Vladimir Belogub, would make a direct appeal to President Putin at MAKS 2001 to secure the future of the plant. However, the appeal appears to have failed to persuade Yury Koptev, General Director of the Russian Aerospace Agency (RAKA), that the plant should be included in the government supported aerospace programmes, leaving potential work for the plant looking increasingly unlikely, given its inability to bring investment to programmes such as the Tu-334 and the An-70. According to Doronin, Aviakor will fund its proportion of the working capital for the An-140 construction from revenues earned for Tu-154 overhauls. The recent announcement of the Sibir-led leasing scheme, currently seeking funds, implies that this may be a more lucrative revenue stream. At present, according to reports, the plant is barely holding its own in its current business, with utility cuts threatening its existing work. Earlier reports also suggested that the full cost for setting up serial production would be $10m, and it is doubtful that the plant could raise funding of the scale required. If the concept outlined by Doronin is simply the completion of one aircraft, it is difficult to see what the purpose would be, except simply keeping the programme alive in the expectation of orders that have so far failed to materialize. Recent talk of leasing structures has inevitably aroused hopes of demand being forthcoming from Russian carriers.

Article ID: 2705