Murphy's Law: Ukraine Plays The Arab Card

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November 29, 2017: Antonov Aviation, the Ukrainian aircraft manufacturer that had survived the Cold War and the severing of economic relations with Russia after 2014, has decided to revive production of the An-70 four-engine turboprop transport, even though Russia was the main customer and the source of financing and several key components. Antonov has found new financial backers in (Saudi Arabia, UAE and Turkey) and supplier for the components supplied by Russia.

Thus crises peaked in late 2015 when Russia declared it was abandoning development of the An-70, and cancelling its 2012 order for 60 of these aircraft (to be delivered between 2014 and 2020). The An-70 was another of those projects that began development in the 1980s when Ukraine was part of the Soviet Union. Russia believed that cancelling its An-70 order would kill the An-70 project. Russia then announced that the canceled An-70s would be replaced by a smaller number of the new Russian Il-76MD-90 transports. Thirty of these had already been delivered and the Russians are satisfied with the latest version of the elderly Il-76 jet transport. Yet Russian Air Force officials still believed at least fifty more new Il-76s were needed to replace the cancelled An-70s and rapidly aging Cold War era Il-76s that were increasingly unsafe to operate.

In 2015 Russia thought the loss of the An-70 deal would put Antonov out of business and it almost did. Many aviation experts were surprised that Antonov survived the 1990s and the loss of so much business from state-controlled airlines in other communist countries and the Soviet Air Force. But Antonov persisted and in 2008, after two years of stalling, Russia agreed to put up the needed $300 million to revive the An-70 development program.

In the 1980s the An-70 has been pitched as a low cost alternative for nations needing American C-130s or the new Airbus A400M type four engine turboprop military transports. The An-70 design was innovative and impressive for a prop-driven aircraft. While the C-130H could haul 20 tons and the A400M 37 tons, the AN-70 could carry 47 tons (for up to 1,350 kilometers). Carrying 20 tons, the An-70 could travel 7,400 kilometers. The aircraft also exceled in one area the Russians were always good at: the ability to operate from unpaved, and short, runways. About half the components in the An-70 came from existing Russian companies that needed the business. So in 2008 the Russian-Ukrainian effort to revive the An-70 was expected survive by selling lots of aircraft to countries like India and China and others that want the most for their money in a rugged military transport.

Antonov had, after 1991, kept An-70 development going until 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 at the expense of the An-70. The Ukrainians pointed out that there was still a demand for turboprop transports. Eventually the Ukrainians made their case that the An-70 was needed. Russia placed an order in 2012 that enabled development and plans for mass production to move forward. That ended in late 2014 when Russian turned on Ukraine (for ousting a pro-Russian government) and seized Crimea and attempted to do the same in eastern Ukraine. That war continues, but so does Antonov. Even before 2014 Ukraine found it had a lot of Western firms ready to replace the An-70 components, including the unique turbo-prop engines that were supposed to come from Russia. Meanwhile Antonov had already demonstrated it could build an air transport, the An-132, with no parts or orders from Russia. All it took was some Arab partners.

In June 2017, after two years of development Antonov presented its new An-132 transport at a major international airshow. In many respects this is one very unique aircraft. The An-132 made its first flight only two months earlier and that was largely because Antonov had a new foreign partner; Saudi Arabia. Thus during 2016 Saudi Arabian technical, production and financial personnel were heavily involved in what was basically a joint venture between Antonov and Saudi Arabia. For Ukraine this made Saudi Arabia a major partner and investor in the Ukrainian aviation industry. An earlier partner (at least for engines) was (and apparently still is) China.

With the An-132 the Saudis accepted Ukrainian assurances that Antonov was a good investment and excellent way to diversify Saudi Arabia’s oil-based economy. The UAE was already doing this, including the establishment of manufacturing plants in Jordan and Algeria for its new NIMR truck company. The UAE worked with the Russian Gaz automotive company, which also needed some foreign partners.

Antonov had already decided to go ahead with the An-132 and in early 2016 announced the completion of the fuselage for the first prototype. That is what got negotiations with Saudi Arabia started. All the An-132 components were to come from Ukrainian or Western suppliers and some of the final assembly was to take place in Saudi Arabia. That arrangement evolved and now an An-132 assembly facility will be built in Saudi Arabia and share production with a similar facility in Ukraine. To make this work the Saudis have basically guaranteed customers (military and civilian) for the first 300 An-132s. If the aircraft performs as advertised there are plenty of potential customers in the Middle East, the biggest one being Saudi Arabia itself.

The An-132 is a much upgraded version of the 1960s era An-24, which currently exists mainly as a much evolved (from the An-24) An-32. The An-132 is a 29 ton twin turboprop aircraft that can carry up to 9.2 tons of cargo, 75 passengers or 27 stretchers (casualties). Cruising speed is 550 kilometers an hour and endurance is about seven hours. Max altitude is 9,000 meters (30,000 feet). The An-132 will be optimized for hot and dusty environments.

In early 2016 Saudi Arabia has already agreed to buy at least six An-132s (four for search-and-rescue operations and two for electronic warfare). This order will be expanded once the first production models arrive in 2018 and perform as expected. Ukraine and Saudi Arabia have a tremendous incentive to succeed with this joint venture. One could say that failure is not an option for either partner. Unfortunately, for a host of reasons, failure is still a possibility so this project is one to keep an eye on to see how well both countries can do trying to escape their troubled pasts.

 

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