Tag Archives: Irkut

World-Class Competitors

Defense News has posted its annual list of the world’s top 100 defense companies for 2012.

The same seven Russian firms appear on the list.  But against the backdrop of a declining international defense market, the performance of Russian companies last year is interesting.

They did fairly well, except for airplane makers.

Almaz-Antey’s reported defense revenue rebounded strongly in 2012 – by 62 percent — to make it 14 overall.  It moved up from 21 last year.

Helicopters of Russia’s revenue jumped 32 percent to put it at 24.  It was 44 last year.

Sukhoy’s revenue was down 8 percent.  But down less than others.  With the market declining,  it came in 43rd, up from 52nd last year.

United Engine-building’s revenue increased nearly 50 percent to make it number 49, up from 55.

Irkut’s revenue and position declined, more than 18 percent to make it 62 versus 53 a year ago.

RTI Sistemy reported a 12 percent gain to be 80th instead of 100th last year.

RSK MiG was down 17 percent and came in at 93rd.

Here are the posts on 2011 and 2010.

Air Forces Prospects

With MAKS-2011 underway, this is something of a moving target.  Before getting to the main topic, a little news from Zhukovskiy . . . some of today’s headlines. 

OAK President Mikhail Pogosyan told the press two more T-50 prototypes will join the development and testing program this year.  He expects more than 100 military transport aircraft to be bought under GPV 2011-2020.  Il-112, Il-476, and Il-76MD will come first, then ten An-124 in 2014-2015, and later a larger number of An-70s.  Pogosyan said, starting from 2011, OAK will deliver more than 20 combat aircraft each year.

VVS CINC, General-Colonel Zelin told the media he foresees five squadrons of Su-34 (possibly as many as 120 aircraft).  The VVS will have six by the end of 2011 and will get 12 next year under the current contract for 32 aircraft.

For Air Forces Day, RIA Novosti had military commentator Konstantin Bogdanov describe how he sees things developing for this armed service.  How he puts the Air Forces’ future picture together is worth a look.

Bogdanov says he sees, for the first time since the Soviet collapse, movement, a turnaround in procurement financing, and real deliveries of aircraft in 2011. 

Interestingly, he begins with the Su-35S.  Forty-eight of these “transitional” 4++ generation fighters will be procured, but there could be more if there is any delay in the 5th generation T-50.  Bogdanov suggests, even without a  delay, the pragmatic Defense Ministry leadership could decide to blend 4th and 5th generation technology and equipment in one aircraft.

Bogdanov maintains one Su-34 flew missions in the 5-day war with Georgia [has anyone seen this elsewhere?], then got its serial production go-ahead, and contract for 32 aircraft in fall 2008.  Modernizing the aged Su-24 is a backup plan for the Su-34.  Bogdanov claims VVS CINC Zelin has hinted that ALCM-armed Su-34s could go to LRA.

Some old Su-27s have been updated to Su-27SM, and even a few new Su-27SM3 — unsold to China — have been obtained.

RSK MiG’s future, according to Bogdanov, looks less certain.  Russia had to buy the defective Algerian MiG-29SMTs.  It’s unclear if the Defense Ministry will have any requirement for the MiG-35.  And this leaves MiG with the possibility of providing MiG-29Ks to replace the Navy’s Su-33 fighters on the Kuznetsov’s deck.

Bogdanov then mentions how Irkut has parleyed its export success into more domestic sales.  He says the firm has redeveloped its Indian Su-30MKI into the Su-30SM, and it may sell as many as 40 to the Defense Ministry.  Twelve might go to replace Naval Aviation’s Su-24s at Gvardeyskoye in the Black Sea Fleet [apparently these aircraft weren’t swept up by the VVS earlier this year].  Similarly, says Bogdanov, KnAAPO last fall sold the VVS four Su-30M2s, domestic versions of its Su-30MK2 export.

Turning to rotary-wing aircraft, Bogdanov sees stable order books for Russian helicopter makers.  The order books are balanced in terms of military and civilian, and internal and external buyers, and all sales sectors are growing.

He says by 2010 the military’s contract for Mi-28N helicopters reached 100 units and serial production of its main competitor, the Ka-52, continued.  Mi-8s have been bought by the dozens.  And the hangars and flight decks of Mistral helicopter carriers will have to be filled in the future.

Bogdanov concludes more than 100 helicopters of all types may be procured before the end of 2011.  He repeats the familiar goal of 1,000 new helicopters by 2020, and says the near-term future for this sector looks good.

Bogdanov sees more clouds in military transport development and production.  Il-476 production at Ulyanovsk still needs to stand up, and Zelin’s already announced that a new A-100 AWACS will be based on it.  Restarting An-124 production and buying the An-70 from Ukraine are possibilities with details to be worked out.

Focused on platforms, Bogdanov gives short shrift to organizational and human aspects of VVS development.  He notes the Air Forces are completing the change from mission-oriented air armies and divisions to territorial composite or mixed formations (air bases), and he briefly mentions scandals over the handling of “order 400” premium pay.  But he concludes:

“In coming years we’ll see more than a few painful symptoms in the VVS, both strictly aviation-related and internal, and those connected to the general background of difficult transformations of the country’s armed forces.  Let there be pains, but let them be growing pains.”

Some World-Class Competitors

Despite problems with its state defense order and defense-industrial complex, Russia clearly has world-class defense producers.  This is apparent not just from their arms exports, but it’s also evident in their defense-related revenue.

Eight Russian companies just made the Defense News list of the Top 100 defense corporations worldwide.  They are Almaz-Antey, Helicopters of Russia, Sukhoy, Irkut, United Engine-building, Tactical Missiles, KB Instrument-building, and RTI Sistemy.

With 2010 defense revenue of nearly $4 billion, Almaz-Antey has appeared in the list since 2005 (Antey appeared alone prior to that).  Yet its revenue’s only about half that of Thales, a fourth of EADS, perhaps reflecting that those companies are more diversified in their defense and non-defense business. 

Helicopters of Russia vaulted into the middle of the Top 100 list with 2010 defense revenue of nearly $2 billion (a gain of 134.1% over 2009).  Consolidation of its helo design and manufacturing capabilities seems to have put Russia on the map (or at least on the Top 100).  Still, Helicopters of Russia has about half the defense revenue of Textron, and half as much diversification in its business.  The difference is more pronounced when comparing to United Technologies.

Sukhoy and Irkut need no introduction, but it’s a little surprising that their defense revenue was lower than Helicopters of Russia.

United Engine-building (ODK) is an interesting case.  Not huge defense revenue, but more diversified than other Russian corporations in the Top 100.

A number of Russian companies have fallen out of the Top 100 over the years.  They include submarine and shipbuilders Sevmash, Admiralty Wharves, and Northern Wharf (the United Shipbuilding Corporation — OSK — hasn’t appeared in their place), RSK MiG, Uralvagonzavod, and Aerospace Equipment.  It’s hard to say why they’ve fallen off; it could be their financial reporting — still sketchy at times — has made it hard to evaluate their revenue claims. 

Still, eight Russian companies in the Top 100 is a long way from 1999 when only Rosvooruzheniye (remember it?) made the list.

The Russian firms in the Top 100 are strong weapons and military equipment exporters, but the lesson for them from abroad seems to be that greater diversification and more civilian business makes a defense company more profitable.

Irkut Offers Up Su-30MK

Su-30MK (photo: http://www.sukhoi.org)

On Monday, Irkut company officials announced the aircraft producer is in negotiations to sell the Defense Ministry up to 40 Su-30MK fighters.  They believe they’ll finalize the contract in 2012.

The officials say the base contract will be for 28 aircraft, with an option for 12.

Vedomosti says a source close to Rosoboroneksport says the fighters go for $50 million a piece, or $2 billion for 40.

Neither the Air Forces nor government holding company OAK reacted to Irkut’s announcement, according to Izvestiya.

Irkut President Aleksey Fedorov told Interfaks the manufacturer sees declining demand for the Su-30MK family, and wants to cease production over the next ten years.  At that time, it will be producing only the Yak-130 trainer for the military.  Irkut intends to concentrate its efforts and investment on building the MS-21 regional passenger jet.

Fedorov told Izvestiya the Su-30MK export model will be “Russified” for 1.5 billion rubles – the onboard computers and displays will change from English to Russian, and some French and Israeli components will be swapped out for Russian ones.  The Russian variant may be called the Su-30SM.

There’s been talk about a small procurement of Su-30MK, or Su-30M2, since MAKS-2009, and two Su-30 fighters arrived at a unit in the Far East last month, according to ITAR-TASS.  The Far East Air Forces and Air Defense Army’s Chief of Aviation, Colonel Aleksandr Maksimtsev said Su-30 deliveries will continue.

A number of commentators have argued for buying the Su-30 for the Air Forces instead of waiting for the Su-35.  CAST’s Konstantin Makiyenko told Izvestiya:

“The Su-35 still isn’t completely finished, and it’s unclear when it’ll be accepted into the inventory.  Therefore, a fully developed export product which has completed all RDT&E will be taken and accepted into the inventory.  This is, indisputably, a smart decision.”

ITAR-TASS wrote that the Russian Air Forces didn’t acquire the Su-30 for financial reasons.  But Izvestiya noted more than 270, in various configurations, have been sold since 1997, with buyers including India, Algeria, Venezuela, Vietnam, China, Malaysia, and Uganda.