Russia is scrambling, without much success, to retain its Cold War era air transport manufacturing capability. For example, a year ago, the old Soviet aircraft builder, Antonov, introduced a competitor (the An-148) for the American Boeing 737. Although Antonov has orders for over 200 of the new aircraft, the first operators report that the An-148 is more expensive to operate than a comparable 737 (in service since the 1960s with over 6,000 built). Sensing that competing with the 737 (which costs more than 50 percent more) on price alone, might not work, Antonov has announced a military version of the An-148; the An-178. This would be a cargo aircraft, with a max payload of 15 tons. But that segment of the market is already being served by aircraft like the AN-295 and C-27J. The basic problem here is that once mighty Soviet civil aviation industry has been shriveling away since 1991, and has few viable opportunities to make a comeback.
The disintegration of the Soviet Union not only destroyed centuries of Russian empire building, but tore apart the Russian civil aviation industry. After 1991, the Soviet Union was replaced by a much reduced Russia, and 14 new nations that had been part of the old empire. The dissolution deal had whatever Soviet assets were in the new nation, belonging to it.
Most of the civil aircraft manufacturing facilities were outside of Russia (in Ukraine and Uzbekistan). Of the three major aircraft manufacturing firms, Antonov was headquartered in Ukraine, Ilyushin in Uzbekistan and only Tupolev in Russia. Russia has managed to persuade (via cash and help with sales) Ilyushin to move a lot of manufacturing back to Russia. Tupolev is being merged with several military aircraft manufacturers, as part of the United Aircraft Corporation. Antonov may be forced to reconnect with Mother Russia as well, given their inability to design and manufacture aircraft that can compete with AirBus and Boeing (not to mention many smaller Western firms).
It's not that the former Soviet aviation firms have not tried. Two years ago, after two years of stalling, Russia agreed to put up the needed $300 million to revive the An-70 transport aircraft development program. Venezuela also tried to help Antonov with this four years ago, by offering to buy a dozen of their new An-70 transports. But Russia, which was having political problems with Ukraine at the time, refused to go along. Since the late 1980s, when the An-70 was in development, it has been pitched as a low cost alternative for nations needing C-130 or A400M type medium military transports.
Antonov, a Ukrainian company, kept An-70 development going through mid-2006, and maintained good relations with the Russian government. But Russia said it wanted to concentrate on further developing its own Il-76 jet transport. But there is still a demand for propeller driven transports. The new program plans to have the An-70 ready for production sometime soon.
Meanwhile, Russia is moving Il-76 production from Uzbekistan to Russia. This process got rolling four years ago, when China placed a $1.5 billion order for 38 Il-76 transport planes and Il-78s (tanker versions of the Il-76). Similar to the older American C-141, the Il-76 is only manufactured in Uzbekistan. That's because one of the Russian aircraft plants moved east during the German invasion of 1941, ended up in Central Asia, a part of the Soviet Union that became independent Uzbekistan in 1991.
Over 900 Il-76s were manufactured there over the last thirty years, most by what is now the Chkalov Tashkent Aircraft Production Company in Uzbekistan. Nearly a hundred Il-76s were exported, so far, mainly to Cuba, Iraq, China, India, Libya and Syria. However, until this Chinese order came along, Chkalov was surviving by manufacturing wings and other components for the An-124, An-70 and An-225 transports. In addition, it made replacement parts for the Il-76 and Il-114 aircraft.
Russian commercial aircraft survived during the Cold War partly because they had a captive market (the former Soviet Union, the East European nations the Soviets dominated), and were attractive to a few other nations looking for cheap, often free, and rugged aircraft. While many old Soviet transports still serve on in secondary markets, these designs are not competitive with new aircraft. Western models, while more expensive, are cheaper and easier to operate. The old Soviet era aviation firms have tried hard to compete, but that competition will eventually kill off most of the Soviet era producers, leaving only a few who managed to catch up with the rest of the world, or found a specialized niche.