AT A MEETING IN THE FEDERATION COUNCIL, THE HEAD OF THE TSRT, ANTON KOREN, PROPOSED CHANGING THE APPROACH TO PLANNING THE PRODUCTION OF AIRCRAFT EQUIPMENT IN THE RUSSIAN FEDERATION AND MADE A NUMBER OF OTHER STRATEGIC PROPOSALS
« BackTheses of the report by the Head of the Transport Strategy Center (TSC) Anton Koren:
Fleet shortage and approaches to planning production programs
The current state of the air transportation market in terms of providing Russian airlines with an aircraft fleet is characterized by a significant fleet shortage, which leads to the impossibility of satisfying the demand for air transportation of the population and sectors of the economy.
The round table discussed examples of regions where, despite the demand, dozens of airlines do not open or are left with underserved demand due to the lack of an aircraft fleet. This situation has developed almost throughout the country. TSC experts estimate the current solvent demand to be several tens of percent higher than the achieved indicators (111.7 million passengers transported by Russian airlines in 2024).
Thus, when planning the Comprehensive Program for the Development of the Aviation Industry of the Russian Federation until 2030, when making changes to it, in the current conditions, the Transport Strategy Center (TSC) proposes to plan the need for the fleet of Russian airlines not from the existing low base (the achieved value of satisfied demand), but taking into account, among other things, the potential demand for air transportation, which could be satisfied if there was a fleet of aircraft.
Failure to take this aspect into account may lead to a deficit of the fleet of domestic aircraft among Russian airlines within the framework of the planned aircraft production programs, and this, in turn, may again lead to undesirable consequences of deliveries of foreign-made aircraft to fully satisfy demand (under the conditions of the predicted lifting of sanctions on aircraft deliveries after the stabilization of the geopolitical situation) due to an insufficient number of domestically produced aircraft.
Creating effective economic conditions for replacing the aircraft fleet with domestic ones
Also, for effective planning of aircraft fleet renewal with replacement with domestic aircraft, airlines need to understand in advance the terms of aircraft deliveries, measures and conditions of state support, which under normal planning conditions should be known 5 years in advance, and taking into account plans for the first aircraft deliveries - at least 2 years in advance. This information is necessary for effective strategic planning of airline fleet replacement taking into account significant changes in capital expenditures, aircraft ownership costs, and in terms of replacing regional aircraft with a new fleet - including taking into account a significant increase in operating costs.
It should be noted that when airlines belong to the regions, when upgrading the aircraft fleet, additional costs will be borne by regional budgets within the framework of subsidy programs for lost income, since most regional and local flights are subsidized.
Creating effective protectionist measures when replacing the fleet with domestic aircraft
In addition, experts note that when replacing a fleet of foreign-made aircraft with domestic aircraft, economically sound transition conditions for domestic airlines should be developed.
On the one hand, measures to support domestic aircraft should be developed in advance, stimulating the acquisition of Russian aircraft, on the other hand, it is necessary to ensure the financial stability of Russian airlines when replacing the fleet.
The measures that are recommended to be considered may be: a conditional possibility, agreed with the aviation industry, to import foreign-made aircraft for a short period with control over the imported number of aircraft in order to complete the aircraft fleet to fully meet demand (taking into account the impossibility of meeting demand using domestic aircraft at the current production rates).
It is also recommended to consider the conditions for the transition to a domestic fleet of aircraft without restrictions on operation periods, taking into account previously completed aircraft deliveries (until 2022), and also not violating the normal stable principles of interaction between airlines and lessors, for example, if a leasing contract is concluded for 6 years, then do not create regulatory conditions for the lessee - the airline, which will allow demanding the termination of the leasing contract with penalties for the airline and the replacement of the aircraft with domestic ones.
Experts note the advisability of developing and beginning discussions of draft legislative and regulatory acts that will ensure a protectionist policy for the domestic aviation industry, already this year, in advance, so that airlines and subjects of the Russian Federation (owning airlines and subsidizing flights) take into account in advance all economic aspects of aircraft fleet replacement, including within the framework of budget planning.
Creating incentives for replacing the fleet with domestic aircraft and ensuring the competitiveness of new domestic aircraft
When replacing the fleet of foreign-made aircraft with domestic aircraft, measures stimulating the acquisition of domestic aircraft should also be developed and known to airlines in advance.
In particular, previously, including when launching the domestic SSJ-100 aircraft on the market, the tools for reducing leasing rates by subsidizing part of the loan funds for the acquisition of domestic aircraft, a subsidized contribution to the authorized capital of a state leasing company for the acquisition of new aircraft have proven their effectiveness.
The experts of the Transport Strategy Center (TSC) note that it is additionally advisable to consider the instrument of trade-in of aircraft and helicopters, which will not only stimulate the acquisition of new domestic aircraft, but also ensure the withdrawal of foreign aircraft from the domestic market. This process can be considered for implementation using the resource of leasing companies with state participation. The process of replacing aircraft should be systematic and not lead to a significant one-time increase in costs and, accordingly, tariffs, the cost of air transportation (and, as a consequence, an increase in the volume of subsidies).
Currently, both foreign and domestic regional aircraft in airlines are often the only depreciated asset that is not economically profitable to replace with a more expensive new one that will provide the same volume of transportation. For such cases, it is necessary to provide incentive measures to compensate for additional costs that arise when replacing with new domestic aircraft. This is especially relevant for regional airlines. Additional conditions stimulating the acquisition of domestic aircraft and helicopters can be created through such support measures as subsidizing the acquisition of a pool of spare parts, subsidizing crew training and other measures previously applied to new domestic aircraft.
Also, for airlines with state participation, one of the measures may be the mandatory acquisition of domestically produced aircraft during the modernization and expansion of the fleet.
At the same time, the activities of the domestic aviation industry should also be aimed at the technological superiority of domestic aircraft technology in terms of the specific cost efficiency of the final transportation product, based on which airlines make a decision on the acquisition of aircraft. Economically justified conditions for the transition to a fleet of domestically produced aircraft for Russian airlines should also ensure the competitiveness of new domestic aircraft in terms of the cost price per seat kilometer and ton kilometer, in comparison with foreign analogues.
Recommendations of the Transport Strategy Center (TSC)
Develop effective protectionist measures when replacing the fleet with domestic aircraft. When replacing the fleet of foreign-made aircraft with domestic aircraft, economically justified conditions for the transition for domestic airlines should be developed. On the one hand, measures to support domestic aircraft should stimulate the acquisition of Russian aircraft, on the other hand, it is necessary to ensure the financial stability of Russian airlines when replacing the fleet.
Adopt a set of measures for the domestic aviation industry, including within the framework of certification, aimed at the technological superiority of domestic aircraft equipment in terms of the specific cost efficiency of the final transportation product, based on which airlines make a decision on the acquisition of aircraft. Economically justified conditions for the transition to a fleet of domestically produced aircraft for Russian airlines should ensure the competitiveness or superiority of new domestic aircraft in terms of the cost of a seat kilometer and ton kilometer, in comparison with foreign analogues.
Formulate, at least 2 years in advance, the conditions for the modernization of the aircraft fleet, the terms of deliveries, including technical conditions and financial terms of the lease of regional aircraft, to take into account additional planned costs of regional budgets within the framework of subsidizing programs for lost income.
Create incentives for replacing the fleet with domestic aircraft that increase the competitiveness of new domestic aircraft, including by considering the possibility of introducing tools to reduce ownership and operation costs due to:
- subsidizing part of the loan funds for the acquisition of domestic aircraft (possibly through a subsidized contribution to the authorized capital of a state leasing company for the acquisition of new aircraft);
- introducing a trade-in instrument for aircraft and helicopters;
- subsidizing additional costs that arise when replacing with new domestic aircraft;
- subsidizing the creation of a pool of spare parts;
- subsidizing the training of crews and engineering and technical personnel;
- establishing a rule for airlines with state participation on the mandatory acquisition of domestically produced aircraft during modernization and expansion of the fleet;
- other measures aimed at effectively promoting new domestic aircraft to the domestic market.
Representatives of the domestic aviation industry also took part in the round table: Director of the Department of Aviation Industry of the Ministry of Industry and Trade of the Russian Federation Anna Panina, First Deputy General Director of the United Aircraft Corporation Oleg Bocharov, representatives of other ministries and departments, heads of state institutes of the aviation industry and civil aviation, key banks, leasing companies.
The consortium, which includes the Transport Strategy Center (TSC) and the Center for Strategic Research in Civil Aviation (AVIACENTER), is included in the RAEX rating of the largest consulting groups in the field of strategic planning and organizational development. TSC is a leader in aviation consulting projects.
The consortium unites the first consulting centers in Russia, the EAEU and the CIS countries, whose product line includes more than 100 types of professional services in the field of industry strategic planning, management and investment consulting in the field of manned and unmanned aviation, as well as organizations for the design of aviation, transport and logistics infrastructure.
Under the leadership and with the participation of the Consortium, more than 400 strategic projects were implemented in the interests of airlines, airports, aviation industrial holdings and other enterprises in the industry, federal and regional authorities. Details on the website transport-strategy.org.
Follow the news and strategic decisions on transport in the new telegram channel TSC
https://t.me/ConsortiumTSC