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Sukhoi's new regional airliner Superjet 100 to take on Embraer, Bombardiernews
Ashwin Tombat
26 September 2007
The new 98-seater regional passenger plane will be rolled out later this week, take its first flight by the end of this year, and start commercial operations by end-2008. By Ashwin Tombat

This week, Russian aircraft manufacturer Sukhoi rolls out its first modern commercial passenger airliner for the global market, the Superjet 100. Sukhoi is better known as the former Soviet Union's largest warplane maker. Its Su-27 fighter family, famous for its breathtaking 'Cobra' manoeuvre at air shows, could match Boeing's F-15 Eagle. A modernised version, the Su-30, has found customers in many countries, including the Indian Air Force (IAF).

The civilian Superjet is a 78- to 98-seat regional airliner developed in co-operation with with major American and European aviation corporations, including Boeing, Snecma, Thales, Messier Dowty, Liebherr Aerospace, and Honeywell. The new civil plane will be unveiled at a Sukhoi military factory at Komsomolsk-on-Amur in eastern Russia on 26 September. Its first flight was to be in September, but has been delayed for a month or two.

The foreign helping hand
Boeing's involvement in the development of the Superjet is seen by analysts as a largely symbolic one. Actually, the American company is keen to access titanium from Russia for its next generation of jetliners. But French and Italian firms have invested heavily in the project.

Regional jets are an $8 billion market, presently dominated by Brazil's Embraer and Canada's Bombardier. It is relatively small compared with the $60 billion spent annually on bigger jets made by Boeing and Airbus.

Sukhoi's new plane is also up against Chinese and Japanese firms that are developing regional jets. It is a market that affords entry without having to spend the colossal sums needed to challenge Airbus or Boeing.

Already in demand
The plane has already secured orders. Armenia has become the first republic in the Commonwealth of Independent States (CIS) to order Superjets. Sukhoi and the Armenian air company Armavia have signed a firm contract for purchase of two Superjet-95LRs with an improved flying range. Two more are registered as a purchase option, in a $55million to $60 million deal being financed by Vneshtorgbank, Russia's bank of foreign trade.

Russians make very good military aircraft, but lag badly behind in commercial aircraft. The country's aviation industry collapsed after the fall of the Soviet Union. Now, President Vladimir Putin wants to breathe new life into the sector to demonstrate Moscow's industrial clout abroad, and to project his government's success to voters in Russia.

Putin has forged a giant new state aircraft holding company, known as the United Aviation Corporation (UAC), to spearhead the revival. It is headed by first deputy prime minister Sergei Ivanov, tipped as the leading candidate to succeed Putin as president next year.

The European connection
The Superjet's success hinges on Italian aerospace firm Finmeccanica, whose Alenia Aeronautica unit has a 25 per cent stake in Sukhoi's civilian aircraft division. Alenia co-owns Franco-Italian turboprop maker ATR with Airbus parent EADS. It plans to provide after-sales service and support, both of which are crucial for winning contracts.

Sukhoi hopes to book orders for 100 planes by the end of the year (it has already secured over 60). Russian airlines Aeroflot (45 planes) and Air Union are the main buyers of the Superjet 100. ItAli, an airline based in the Italian town of Pescara, was the first Western firm to order the jet. Air France and Lufthansa are also on the target list for sales. Sukhoi's hopes rest on its relatively low list price, around $25 million, which is about 25 per cent less than its rivals charge.

Safran's Snecma unit is co-operating with Russia's NPO Saturn to produce the engines for the Superjet 100. French electronics firm Thales is integrating the avionics. Analysts say outside investment makes the vital difference between success and failure. Russia's previous efforts to build commercial jets with Western engines by Ilyushin and Tupolev have not inspired much confidence in the West.

Turbulence ahead?
But there are doubts about how much space the relatively narrow global market for regional jets has left. Embraer is firmly in the driving seat, followed by Bombardier. With China and Japan not far behind, they question whether there is room for more. As it is, within the booming global aviation market, the regional jet market is the slowest-growing.

Sukhoi will have to come up with an exceptional plane. Lower selling prices will really not work in a scenario where there is relentless pressure on seat-mile costs. Airlines will look hard at performance once the Superjet starts flying.

But Sukhoi is banking mainly on the Superjet to increase its output by 40 per cent to $2 billion by 2010. By 2010 to 2015, it plans to achieve a balanced development between military and civilian components, says CEO Mikhail Pogosyan.

Sukhoi plans to produce at least 700 SuperJet-100s, and intends to sell 35 per cent of them to North America, 25 per cent to Europe, 10 per cent to Latin America, and 7 per cent to Russia and China. It estimates the overall market for the SuperJet-100 at about 5,500 airliners, worth $100 billion, up to 2023. Sukhoi says it will build the first nine SuperJet-100s in 2008.

The company also plans to continue the modernisation and production of its Su-27 family of military aircraft, including the Su-27 and Su-30 flanker fighters, the Su-33 flanker-D naval fighter, the Su-34 fullback strike aircraft and the Su-35 flanker-E air superiority fighter.


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Sukhoi's new regional airliner Superjet 100 to take on Embraer, Bombardier