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Where there is no law, but every man does what is right in his own eyes, there is the least of real liberty
Henry M. Robert

MAKS-2003 aerospace show: contracts, prospects, competition

2 September, 2003 - 00:00

The MAKS-2003 International Aerospace Show held the week before last in Zhukovsky outside Moscow was evidence that, against the backdrop of its growing role as a global arms exporter, Russia’s influence on Ukraine in the military-technical sphere has increased substantially. Despite its declared Western orientation, Ukraine upgrades all its major military systems hand in hand with Russia. This time Ukraine clearly attempted to display its state of the art and was perhaps the second most widely represented MAKS-2003 participant, even though the show featured eight NATO aircraft. It will be recalled that Russia was also well represented at last year’s AVIASVIT Aerospace Show in Ukraine.


The pragmatism in the relationship between the two counties has reached a point where problems are discussed openly and without prejudice. Aside from its international recognition, the MAKS-2003 air show offered a few revelations. First, Russia will not buy An-70s under any circumstances, at least as long as Gen. Vladimir Mikhailov remains general commander of the Russian Air Force. Second, despite this rebuff the Ukrainian-Russian cooperation in the military-industrial sector has been reinforced with new plans to implement several more major projects. And finally, the Ukrainian arms exporters have weathered the consequences of the Kolchuga affair and announced growing sales.

Among the MAKS-2003 events that commanded the public’s special attention was not only the arrival of American planes but also their detection and identification by the Ukrainian Kolchuga early warning system while they were still 800 kilometers from their landing site. As planned initially, the An-70 demonstration flight was to coincide with Pres. Putin’s visit. However, with the flight program shifted and the time allocated for the An-70 demonstration flight curtailed, the effect was lost, since Pres. Putin left the air show long before An-70 was airborne. Representatives of the Antonov Design Bureau made no secret of the fact that they “faced serious resistance from the organizers of the air show.” According to Oleh Bohdanov, deputy general designer of the Antonov Design Bureau, “the organizers attempted to bar the plane from the air show and then didn’t want to allow it to perform training flights.” According to him, Russian specialists have been prevented from testing the aircraft for a year. The Antonov Design Bureau representatives believe that “attempts to sideline” the An-70 are made to clear the way for Il-76MF, although it is unreasonable to compare planes of two different classes, the tactical An-70 and strategic Il-76MF, designed to carry out absolutely different missions.

In any case, the crux of the problem is the fact that the main buyer of An-70s is Russia’s Defense Ministry. Word has it that the An-70 is a good plane, but its birth was ill timed. It will be recalled that during talks with Westerners on the project to build the An-70 military transport aircraft Russian and Ukrainian representatives committed to buy 164 and 65 planes by 2018 respectively. However, when Europe withdrew from the project, the unrealistic nature of these figures became obvious. That is why the Russian military, who are also strapped for cash, are backtracking on the purchase of An-70.

“The An-70 military transport aircraft has moved from the middle to heavy class. That is why Russia’s Defense Ministry will not buy it even after all technical shortcomings have been eliminated,” said Russian Air Force General Commander Vladimir Mikhailov. This does not mean, however, that Russia will abandon the project. According to him, the Defense Ministry is interested in tuning up the aircraft to sell it to third countries.

Russian experts do not believe that Russia’s debt of $48.2 million under the An-70 program can be covered from the 2004 defense budget as promised by Russia’s Vice Premier Boris Alioshyn. This amount accounts for 30% of the Russian Air Force’s annual funding for research and design projects. In the best case, the debt will be written off using gas schemes. Russian analyst Sergei Sokut stressed that there are no disagreements in Russia over the An-70 project: “If you analyze the statements by Mikhail Kasyanov, Boris Alioshyn, and Aleksei Moskovsky [chief of armaments of the Russian Armed Forces] in recent months, you will see that none of them mentioned mass production of the new plane in Russia. Meanwhile, the Russian government’s favorable attitude toward An-70 is due to the fact that it doesn’t want to strain relations with Kyiv.”

The story could end here, except that there is more. Notably, it was not only the Il-76 project that received fanfare at the MAKS-2003 show, but also a prototype of the Tu-330 new medium transport plane that has been apparently designed as an analog to An-70. Put simply, attempts to jawbone the Russian aviation industry into joining the An-70 project may prove futile, since Russia does not want the An-70. Just like other countries with developed aircraft building industries, Russia does not want to raise a strong competitor with its own hands.


Meanwhile, Russia is willing to cooperate on projects it finds lucrative. Such projects grow in number and most of them may soon translate into transnational structures. This trend is especially pronounced in the aircraft building sector.

To the deafening roar of jet fighters, the Kharkiv Aviation Plant signed a quite lucrative contract with Aviakor, a Samara-based aircraft builder, to create a joint venture, International Aviation Project 140. Under the project, Ukrainian An-140s will be assembled in Samara and sold to Russian air carriers. Aviakor experts estimate the Russian aviation market demand for An-140s at over 100 aircraft. The Russian side plans to assemble five to six An-140s annually over the next two-three years. A contract to supply five An-140s to Libya signed this summer and protocols of intent to buy An-140s signed by Slovenia and Slovakia, as well as the Samara project are evidence of the success of the An- 140 project.

Prospects look good for the jet-propelled An-148. Russia’s Aeroflot Company is in talks to buy a fleet of An-148s, according to Aeroflot General Director Valery Okulov. Experts believe the Ukrainian An-148 will face strong competition from two Russian projects, that is, regional plane Tu-334 — both the Russian-Ukrainian plane and the one that is presently assembled in Kyiv alone — and the RRJ 75 project. Last year, Aeroflot announced its intent to lease 25 An-148s via Iliushyn Finance Co. leasing company. If this happens, the new aircraft will face a bright future.

Aside from the joint Ukrainian- Israeli project to modernize a combat training L-39 plane, a similar Russo-Ukrainian project may be launched in the nearest future. This project will be lead by the Russian Miasishchiev Design Bureau, with the Odesa and Chuhuyev Aircraft Overhaul Plants its Ukrainian partners. “Ukraine can participate in the project both with its planes and plants,” stressed one of the participants of the Russo-Ukrainian negotiations in Moscow.

The air show marked the beginning of an ambitious project announced during the Le Bourget Air Show: the Antonov Design Bureau and Volga-Dnipro group of companies signed a contract to resume production of the An-124 Ruslan aircraft. Although the project envisions renewed assembly of the An- 124-100M aircraft with a payload of 150 tons, work is underway to create a supersized An-124-300 designed for nonstop transcontinental flights. Designers of An-124 believe it should remain on the market for another thirty years.

The international financial and industrial umbrella group, Defense Systems, which unites post-Soviet producers of air defense systems, declared interest in overhauling and upgrading air defense systems jointly with Ukraine. As a first step, a joint maintenance center to repair S-300 air defense systems will be set up on Ukrainian territory. Moreover, to quote Defense Systems secretariat chairman Volodymyr Marhelov, Ukrainian expertise in the sphere of diagnostics, in particular that of Spetstekhservys and UBK-Spektr companies, could be integrated into mobile maintenance stations for 3RS Z-300 air defense systems. Another project in this sphere involves the upgrading of the Pechora antiaircraft missile complex used in air defense systems in thirty-five countries. According to the project participants, this issue became especially urgent after an intergovernmental agreement on cooperation on third country markets was signed this summer.

Finally, the Airborne Launch might become the most ambitious joint project. The ambition of the Soviet times could be realized in a few years, with the first launch as part of this project slated for 2006. The Airborne Launch envisions using An-124-100-VS modified especially for the project as a launch pad for rocket carriers that will place satellites weighing up to four tons into orbit. The plane will house a launch container with a 100-ton launch vehicle carrying a spacecraft. Polit [flight], a light launch vehicle designed by the Russian Makeyev Design Bureau, will be used in the Airborne Launch. The plane will release the rocket at an altitude of thirty to thirty-five thousand feet, after which its engines will be engaged. The rocket booster will place the satellite into a geostationary orbit. The major project participants, the Airborne Launch Aerospace Rocket Complex, Antonov Design Bureau, and Makeyev Design Bureau, have estimated the average cost of one launch at $20-23 million, which is much cheaper than launching rockets from ground launch pads.


Speaking at a press conference, Ukrspetseksport General Director Valery Shmarov agreed with the estimates of the Stockholm International Peace Research Institute that listed Ukraine as the sixth biggest arms exporter. Mr. Shmarov also said that Ukrainian arms exporters have weathered the consequences of the Kolchuga affair, and arms sales are increasing again.

Speaking with this author before the air show, Ukrspetseksport General Director Valery Shmarov said, “It is no revelation to say that Ukraine’s future on the arms market is in technological solutions, in developing new aircraft and aviation equipment, new air defense and radar systems, electronic reconnaissance equipment, precision weapons and equipment to neutralize them. Even today Ukraine can offer new passenger and military transport planes, new solutions for building and upgrading launch vehicles and spacecraft, new radar systems, radio reconnaissance and jamming systems, as well as laser-guided weapons. There is no denying the fact that the long-term outlook for Ukraine on the arms market looks bright. This depends to a great extent on investments in combat new generation systems that should both reflect the military doctrine of the state and have wide perspectives for export. In other words, we are betting on high technologies, this being a necessary precondition of preserving our positions on the market. As for the sales of military hardware in the coming years, there is a demand for Ukrainian-made aircraft and its subsystems, air defense systems, radar equipment, radio-electronic devices, ammunition, and warships. In the first half of 2003, the company’s export volumes increased 1.5 times against the same period last year, with the contracts signed by Ukrspetseksport over this period reaching an all-time high.” According to experts of the Center for the Studies of the Army, Conversion, and Disarmament, Ukrainian arms export volume could grow substantially this year and exceed half a billion dollars, provided the growth trend continues in the second half of 2003. This is to be achieved primarily thanks to a number of major contracts signed last year and early this year, in particular, contracts to supply engines and transmission assemblies for the Pakistani Al-Khalid tanks, to sell four An-32 transport planes to Libya, to upgrade Turkmenistan’s air defense system, etc. Ukrainian military hardware and arms exports to China, India, Egypt, and Algeria have increased substantially. Meanwhile, the mentioned Russo-Ukrainian agreement to cooperate on markets of third countries has provided additional stimulus.

Aside from Ukrspetseksport, which traditionally accounts for over two-thirds of arms export, major contracts have been signed by independent arms exporters such as Artem company that will supply air-to-air missiles for modern Su-30 jet fighters.

Thus, Ukraine seems determined to defend its traditional 1% of the global arms market.

By Valentyn BADRAK, Center for the Studies of the Army, Conversion, and Disarmament, Moscow-Kyiv