Publication: Monitor Volume: 2 Issue: 168

A recent decision by Russia’s largest airline, Aeroflot, to buy 10 U.S.-made Boeing-737 passenger planes has triggered an angry response in the capital city of Tatarstan, where the struggling Kazan aircraft production works manufactures Tupolev airliners. On September 9 the prime minister of Tatarstan, Farid Mukhametshin, sent a message to Aeroflot director Yevgeny Shaposhnikov expressing confusion and indignation over the decision. Mukhametshin complained that workers in domestic aircraft plants, like those working in Kazan, have not been paid for six months, and that the purchase by Aeroflot of foreign-made planes leaves "no hope for preserving tens of thousands of jobs in a number of Russian cities." (Itar-Tass, September 9)

Only a day earlier it was announced that the Kazan plant’s workforce would be laid off for two months without pay as a result of the company’s financial difficulties, the most serious of which was said to be the Defense Ministry’s failure to pay nearly 200 billion rubles owed to the plant. At the same time, the company claims that financial constraints have not only hindered its efforts to gain certification for a new passenger airliner, the Tu-214, but have stopped it even from completing work on ten airliners already in various stages of production. (Interfax, September 8)

Shaposhnikov’s justification of the deal with Boeing, which was signed at the Farnborough air show in Great Britain, was probably not much appreciated at hard-hit Russian aircraft plants. According to Shaposhnikov, the superior cost-effectiveness of Western aircraft compelled Aeroflot to turn to Boeing. He pointed especially to what he said was the poor reliability of Russian-made aircraft engines, and suggested that Aeroflot’s own financial well-being–and certainly its plans to expand in the future–would be threatened if it continued to invest in domestic aircraft producers. He added that the acquisition of Western-made airliners also fit in with Aeroflot’s long-term plans to modernize its fleet, especially insofar as Russian passengers, in his words, prefer planes made abroad. (Interfax, September 9)

The anger in Kazan over Aeroflot’s deal with Boeing reflects the dire circumstances faced by many (but not all) of Russia’s aircraft manufacturers. They have been squeezed on one side by a precipitous fall in defense contracts, and on the other by their inability to compete in the world market for civilian airliners. Yet they also lack the capital for modernization that might make them more competitive in that market. Shaposhnikov’s cavalier remarks also say volumes about some of the changes that have occurred in post-Soviet Russia. A retired Air Force marshal who served formerly as both the commander-in-chief of the Soviet Air Force and then as Defense Minister, Shaposhnikov has apparently left old loyalties and priorities far behind.

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