Air Transportation: January 11, 2003


Russia and India are hammering out a deal to jointly develop, build and sell a new transport based on the Russian Il-214. The new aircraft, which should be ready for production in five years, will carry 20 tons of cargo in it's military version, and a hundred passengers in its civil transport version. While existing aircraft in this category cost $60-70 million, the new Indo-Russian aircraft will sell for about half that. Russia will provide most (53 percent) of the money for the new venture, with India providing all the rest. Russia's airliner manufacturers have been dying since the Soviet Union collapsed and Russian airlines were no longer forced to buy less efficient (and safe) locally built aircraft. Russian aircraft builders have tried to compete by using more efficient Western engines (three Western firms dominate the worldwide market for aircraft engines), and by offering much cheaper aircraft to poor nations. There has been some success with this, but joint ventures, like this one with India, are seen as another way to increase sales. 


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