Procurement: June 26, 2001


Russia's aircraft industry must export or die. According to government forecasts, the Russian military will only buy 7-10 percent of the industry's minimum production in the next 14 years, and Russian airlines will only buy 13-15 percent. The remaining 75-80 percent of sales must come from exports. This is a tall order, as Russian commercial aircraft is only competitive in producing airframes. It is unlikely that the Russian aircraft engine industry will ever become competitive with American and European competitors. Russia has more of a shot with military aircraft. To this end, Russia's two surviving military aircraft manufacturers, Sukhoi and MiG, are forming a joint venture to produce a new generation warplane. But money to fund the research is in short supply. Foreign partners are being sought, but China and India, the two most likely nations, may not be able, or willing, to put up the required amount of money.


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