Aviation industry: rather alive
In recent years aviation Russian industry, it seems, cannot complain about the lack of attention from the state, which initiated the consolidation of the industry by forming the United Aviation Corporation. At the most acute moment of the crisis in 2009, the aviation industry received the necessary financial support. Large contracts for the purchase of military aircraft were placed by the standards of Russia's economic and financial capabilities, and the production of commercial aircraft, with the exception of the Superjet, is generally supported almost exclusively through procurement in the interests of government departments.The state sincerely believes that it has done everything possible and necessary for the national aviation industry. And since the success of the industry is still modest, there is a growing conviction that the industry could not meet the paternal care shown about it. This view is skillfully fueled by information work, which competitors, including, it would seem, “their own” Antonov, are leading against the Russian aircraft industry with highly undervalued efficiency in Russia. Black PR fits perfectly into the corrosive society atmosphere of universal pessimism, discontent and disbelief in their own strength.
Meanwhile, both of these promises — both about the incredible scale of state support and the lack of progress in aircraft construction — are incorrect. The volume of budgetary financial assistance to the industry amounted to a minimum that ensured its survival, but it is absolutely insufficient for development. Or, more precisely, which gave an impulse exactly to such growth rates as we observe today. At the same time, the state made a strategic, perhaps even fatal mistake for the prospects of the national commercial aircraft industry, opening the domestic market for civilian aircraft for foreign aircraft. In these unfavorable conditions, aviation production is slowly, but growing, and the financial indicators of the industry are improving. There is really no breakthrough, but to talk about the complete absence of positive dynamics is incorrect.
Volumes, structure and results of assistance
Over the period from 2007, the total amount of state and quasi-state financial investments in the aviation industry is estimated at 250 – 260 billion rubles. Moreover, this figure includes not only direct cash money (subsidies and contributions to the authorized capital) and indirect (government contracts) support, but also virtual government guarantees, as well as lending through bond loans and state banks refinancing the debts accumulated by the aviation industry enterprises to commercial banks. For comparison: the Olympics in Sochi will cost the country 1,5 trillion (!) Rubles. To prepare for the World Cup in 2018, the regions requested 540 billion rubles, while the costs for the Universiade-2013 in Kazan reached 110 – 120 billion rubles. Another landmark image project of recent years - the APEC summit - cost 680 billion rubles.
One can talk about how important it is for a country to get off the oil needle and develop high-tech sectors of the economy, but money spent is a true indicator of government priorities. It is obvious that the aviation industry is perceived by the government as something less important for the country than football and skiing in the subtropics.
Structurally, the entire flow of public funds can be divided into three parts: payment for the past, maintenance of current competitiveness and investment in the future. So, about 160 billion rubles, or about two-thirds of the total state support, was aimed at closing past liabilities, and only 60 – 70 billion rubles (about a quarter of all funds) can be considered investments in programs to create promising products.
Why was the price of payment for the past so abnormally high? Because the state was not interested in affairs in the aviation industry for a decade and a half, the industry was left to itself. Only Sukhoi and Irkut, which had military export contracts, could boast a more or less stable financial position and the availability of promising products in both the military and civilian market segments. Only two of these companies have invested in the modernization of production. All other assets were in a difficult financial situation, were burdened with excessive debt, backward technological base. In essence, from the point of view of pure commercial logic and momentary pragmatism, consolidating or even preserving such toxic assets does not make any sense at all. Voronezh and Ulyanovsk plants, Kazan and Nizhny Novgorod Sokol - in 2007, these were all bottomless holes, generating billions of rubles in losses with production of two or three aircraft a year.
But the essence of the creation of the KLA and other large consolidated united companies lay in the fact that the state pursued not short-term commercial interests, but created prerequisites for physical recovery, financial reorganization and further development of strategically important, but depressed at that time high-tech industries - aviation, engine-building, shipbuilding and helicopter. Earlier, at the very beginning of the zero years, similar processes took place in the industry of air defense facilities and the production of aviation weapons. By the way, these measures of the state had, in addition to industrial, military, technological, also of tremendous social importance, since they ensured the preservation of high-quality jobs, wage growth, and through local tax deductions contributed to regional development. In addition, it should be remembered that the main efforts to save the industry came at the most critical moment of the financial and economic crisis, when a commercial loan became unavailable.
In general, from 160 billion rubles aimed at saving the aviation industry from the debt hole, 54 billion rubles fell to a bond loan, and 32 billion accounted for refinancing debts to commercial banks. That is, more than half of the funds are actually loans and are refundable. Only slightly more than 70 billion rubles went through as contributions from the state to the authorized capital of enterprises and companies, that is, they amounted to pure assistance. The main corporate recipients of state support were at this point RAC "MiG", which had just experienced a crisis due to the rupture of the contract for the supply of MiG-29 to Algeria. The company was provided 30 billion rubles to cover accumulated losses. This prevented the collapse of the corporation, and already in 2009 – 2010, MiG signed two export contracts for 410 million euros and 1,5 billion dollars, which to a certain extent compensated for and justified these costs and confirmed the correctness of the decision to save the company.
Ulyanovsk Aviastar-SP and the Voronezh Plant, which for two received about 30 billion rubles for the implementation of Tu-204 and An-148 projects, were the other largest beneficiaries of government measures to rescue the industry.
State financial investments, which are aimed at creating promising products and technical modernization of the industry, that is, are investments in the future, are estimated at 60 – 70 billion rubles. These are government contracts for conducting R & D and financing the technological re-equipment of the industry within the framework of targeted development programs for the military-industrial complex and civil aviation. Half of these funds went to the implementation of the program for the development and preparation of the production of the medium-haul aircraft MS-21, the development of the MTA medium transport aircraft and the civil aircraft Tu-204CM were also financed.
The main result of the measures taken by the state was the physical preservation of the industry. Now it is possible (and probably, in some cases it is necessary) to criticize the effectiveness of these investments, but at least there is something to be discussed. We repeat once again: it is the cost of rescue, and not the development of the aviation industry that constituted the most capital-intensive part of the support effort.
However, although state investments in the development of the aviation industry are very modest in reality, the dynamics of the industry’s development does not look so sluggish. Consolidated revenue of enterprises in the KLA increased from 80 billion rubles in 2007 year to 180 billion in 2012 year. At the same time, if in the 2008 – 2010 years, the operating loss ratio of the industry ranged from 9 to 15 billion rubles, in the last two years the industry has entered the green zone. The physical volume of aircraft production is also increasing. In 2008, a little more than 50 machines were produced in Russia, last year this figure exceeded one hundred. In the future, we can confidently predict a dynamic increase in deliveries in the interests of the Russian Defense Ministry of combat and especially military transport aircraft. Military exports are almost impossible to predict. Stable demand is now provided only by India, but with the entry into the Su-35 market, one can hope to return to the ranks of the large buyers of our fighters and China. The main zone of uncertainty and the main challenge for the industry and the whole country is the commercial aviation sector. Actually, when critics talk about the absence of a breakthrough, it is the production of civil aircraft that is meant. In fact, there is a positive dynamic here, and it is simply indecent to ignore it. Last year, for example, 18 civilian aircraft were transferred to customers compared to 7 units a year earlier. But it is clear that two dozen cars are a vanishingly small value for the world market, especially in comparison with the market for military aviation, where Russia lags only behind the United States. But it was in this key segment for the future of the aviation industry that the state dealt a backstab to the industrialists. In 2010, Russia almost completely opened its domestic market for foreign aircraft.
Alien invasion
Until June 2010, there was an 20-percent duty on import of foreign-made aircraft in Russia. In combination with 18% VAT, in principle, this protected the Russian market quite well. However, at the very moment when the domestic industry was ready to offer airlines competitive new generation - the regional An148 and SSJ-100 and the main Tu204CM, the state under pressure from air carriers removed barriers for almost all aircraft. Formally, the duties were preserved in the segments of machines on 51 – 110 and 171 – 219 places, that is, just in those niches in which domestic cars were ready to come. But in reality, even formally, foreign aircraft that do not fall under the action of the remaining barriers select a significant part of the market. The “superjet” with its 100 seating capacity came under the pressure of the European A-319 that rushed into Russia, designed as standard for 124 passengers. An-148 was hit by Canadian CRJ-100 / 200. But Tu204CM, not having had time to enter the market, turned out to be ousted from it by А-321 and no longer produced by Boeing 757 and 767. At the same time, “patriotic” Russian airlines order planes in exotic super-dense or, on the contrary, sparse layouts, in order to escape from the niches that fall under protection. The situation has become all the more critical since Western ships, especially from the secondary market, are cheaper than those produced in single copies of Russian aircraft. As a result, in recent years, a flood of foreign ships has rushed into Russia, and mostly, to put it mildly, not new. Since the cancellation of duties and until the end of last year, the airlines imported more than 270 ships, with only a little more than 50 of them - these are wide-body aircraft, the analogs of which are not produced in Russia. One hundred and fifty long-haul and sixty regional foreign aircraft are actually lost production of the An-148, Superjet and Tu-204CM. By the way, it can be assumed that part of the domestic market has already lost and promising MC-21. The cost of these cars is probably comparable to the total state support of the aviation industry. Budget losses alone from under-received duties and VAT are estimated at 2 billion dollars. At the same taxpayers cost the entire project Superjet-100.In general, the work of the state and industry can be assessed positively when it comes to the military segment and special aviation. The situation with commercial aircraft is still far from ideal. Without harboring illusions that the industry has done everything in this area, the main complaints are addressed to the government, which, instead of pursuing a consistent policy regarding the aviation industry and other high-tech industries, sometimes behaves like an elephant in a china shop.
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