Rybinsk positive about its restructuring and bullish about full year activity

Published: 9/3/1999

According to Rybinsk Motors, its restructuring programme is beginning to yield positive results. The company claims that, in 1999, it expects to produce 50 new engines, compared to 33 in 1998.Given that earlier reports have reported General Director Yury Lastochkin as saying that the plant produced 10 engines in the first half, there is going to be a substantial pickup in the second half (www.concise.org 20th July 1999). Last year, the company employing a total of 20,000 people repaired 250 engines. In 1999, it reports it has already repaired 127 engines and received orders to repair 343, in an increasingly important part of the company's business. The warranty and service network has been enlarged to include, in addition to Russia and the CIS, China, India, Bulgaria, Germany, Syria and the Czech Republic. The company has reported that volumes of production output in the first half of 1999 increased by 17.1%, to Rb 903,691, comparing to the same period in 1998. Sales doubled over the same period to Rb 1,333m. Pre-tax profit was Rb 250m in the first half of 1999: an increase of 300% over the same period in 1998, impacted by the financial crisis devaluation at the end of 1998. The company attributes improvements in efficiency to a number of actions. The cost of repair and servicing of engines has been cut by an average of 35 - 50% through streamlining the overhaul system. With the increase of output the company has also changed its payment terms allowing its hard-pressed customers to pay in instalments, lease engines and 'payment by the hour', leasing engines based on use,. The company has also embarked on a modernisation programme of the Soloviev D-30KU-154 installed on the Tu-154M, in order to meet the new standards imposed by the US and western European countries on noise and emission levels. This will give the engines 3% lower fuel consumption and an 800-hour increase in operational life. RM claims that, of the 4500 D-30KU engines currently in use, 70% of them are overhauled engines. The warranty teams of RM work in 129 airports with technical maintenance performed in the main Moscow airports: Sheremetievo, Vnukovo, Domodedovo, and at airlines in St. Petersburg, Irkutsk, Novosibirsk, Krasnoyarsk and Khabarovsk. RM has also signed an agreement with the French-American company, CFM International (CFMI), on the production of separate details, nodes and modules for CFM56 engine in Rybinsk. The agreement will allow the commencement of tests and license production of some modifications of engine CFM56 by RM, if these engines are installed on Russian planes. In 1999,the number of western-made engines used in Russia, CIS and Baltic States increased to 69, or 30%, compared to 1998. 34 aircraft are currently equipped with western engines, including 11 A310s with CF6-80C2s, operated by Aeroflot. The engines have logged 300,000 hours in more than 20,000 landings and take-offs. Since 1995, Aeroflot has also used cargo DC10-30Fs equipped with CF6-50 engines. Gazpromavia use two Falcons equipped with CF700-2s. In the CIS, seven aircraft of the B737 type fly with CFM56 engines: two by Ukraine International Airlines, two by Estonian Airlines and three by Turkmenistan Airlines. Aeroflot operates B737-400s, equipped with CFM56-3 engines. Transaero's B737-700s are equipped with CFM56-7s. RM already participates in serial production programmes of engines CI7 and CFM56, within the framework of industrial and research co-operation with western engine producers, including General Electric and Snecma. It claims to have two orders worth a total of $4m for 2000, to supply separate details of engines. The other partners are also investigating the possibility of increasing the volumes of orders to produce and extend a range of details.

Article ID: 823