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Yuri Slyusar: "We are facing a lot of work to do"

SLIUSARUAC's new president on near-term objectives and prospects of Russian aircraft industry

Yuri Slyusar, who had been deputy industry and trade minister in charge of aircraft and radio electronic industries, has become president of the United Aircraft Corporation (UAC) early this year. He will remain UAC president for the next five years. The decision was taken by the UAC board of directors based on the outcome of the voting on 16 January 2015. Yuri Slyusar thanked the board of directors for the trust vested in him and said: "The status of the domestic aircraft industry has improved over recent years - both in the development of advanced aircraft and in other segments; technical upgrade of plants and design bureaux is under way. We are thankful to Mikhail Pogosyan for the job he has done. Under his supervision, considerable progress has been made in the industry development, and we shall preserve the best of what has been created by UAC's unique team and all of the subsidiaries of the corporation. We are facing important tasks, including increasing our effectiveness and creating in-house sources of steady development of the corporation. There is plenty of work fir us to do".


In late January, Yuri Slyusar for the first time met journalists in his new capacity, offering them his view of UAC's near-term objectives and shedding light on some of the advanced aircraft development programmes being pursued by the corporation.

UAC's strategy and product portfolio
Recently, UAC has adopted its development strategy, worked out a long-term Russian aircraft industry development programme and decided on aircraft families to be produced. At the same time, the recent changes in the politico-economic situation may call for adjustment of the documents adopted.

"We are going to hold a conference on aircraft industry, hopefully chaired by the Russian President. At the conference, we are going to unveil an updated strategy of the development of UAC and the whole of Russian aircraft industry. The conference is to be held in August this year during MAKS 2015 airshow in Zhukovsky, where we are going to move our headquarters in mid-2015", said Yuri Slyusar.

Overall, the strategy has been widely discussed and is to be adhered to. However, the realities of today call for thorough analysis and, possibly, certain quick decisions on adjusting the development plans. Thus, an updated optimised version of the strategy is to be devised by the middle of the year. According to the head of UAC, the objectives remain unchanged. On the one hand, it is unconditional compliance with the growing governmental defence acquisition programme and development of advanced combat aircraft as well as new transport planes, and, on the other, closer attention to new commercial aircraft development programmes, increased commercial effectiveness of the SSJ100 programme, development and marketing of the MC-21, co-development of a future wide-body aircraft together with Chinese partners, and others.

Plans for the year
In 2014, the United Aircraft Corporation delivered 161 aircraft and increased its revenues by 30%. According to its official information, UAC delivered 124 warplanes under the governmental defence acquisition programme and for export (an increase of about 40% over 2013) and 37 commercial aircraft (an increase of about 30%). The holding company's earnings grew by 30%, while its operating income doubled. The labour efficiency of the corporation’s plants showed an improvement of 25%.

"2015 shall be very tough to us as far as our production programme is concerned", said Yuri Slyusar. "We are planning to produce and deliver 193 aircraft, and the corporation’s aim is to grow by 40%. These is a serious challenge change in terms of business growth. The implementation of a plan like that will necessitate hiring more workers. According to our estimates, to implement our innovative development programmes, we will have to hire about 8,000 workers in 2015. In all, we are planning to hire 16,000-17,000 workers in 2015-2017. This is no small bear to us".

Governmental support measures
To increase the commercial aircraft sales with Sukhoi Superjet 100 being the first one among them, the Russian government has approved a number of support measures that are to reduce customers’ financial risks. In particular, the government has plans to introduce the residual value guarantee for new aircraft, which will allow a competitive leasing rate and, hence, an increase in the global market share held by Russian aircraft. According to Yuri Slyusar, the residual value guarantee mechanism is a key measure of the government's support of Russian commercial aircraft industry. It may start being used as applied to the SSJ100 programme as soon as this year and to the MC-21 by 2018.

The residual value guarantee fund will be named UAC Capital, a subsidiary of UAC, which is being registered now. The new entity will be capitalised by governmental subsidies. A new governmental support mechanism is expected to be used until 2025.

The residual value guarantee implies paying compensation, if the market price of the aircraft turns out to be lower that the anticipated price (60% of the initial price) by the time the lease agreement ends. It is this residual value difference that UAC Capital will compensate upon the completion of the lease.

Sukhoi Superjet 100
The UAC head said 37 Sukhoi Superjet 100s were manufactured in 2014, of which 27 were sold. Yuri Slyusar attributed the cause behind the discrepancy between the output and sales to problems with funding the deals with Aeroflot and UTair. The financing issues pertinent to the Aeroflot contract had been settled only by year-end 2014, for which reason part of the deliveries slipped over to this year. In addition, due to the economic difficulties encountered by UTair, part of the completed aircraft was not sold, but a new customer for them has been found, according to the UAC head. In January, Aeroflot and Sukhoi Civil Aircraft Company signed a new agreement for 20 more SSJ100s. "This year, we are going to deliver 44 aircraft, including those being part of remarketing", reported Yuri Slyusar.

The UAC president said the talks with the Italian partners under the SSJ100 programme continued to seek for measures to enhance its commercial effectiveness. "We have agreed that we will hold a series of meetings in March to discuss the current status of the programme and swap ideas about the optimisation of the technical segment of the programme. I would like to stress, however, that everything remains unchanged at this stage - all of the corporate documents remain in effect, the cooperation goes on, the Italians work here and we work in Venice. However, there are things, due to which time will show the need for organisational and process optimisation to lose less and earn more. I hope we will be able to find a more successful programme implementation model in terms of business and costs optimisation, which would ensure the programme's transition to a more profitable phase".


Yuri Slyusar said that literally several days after getting the job, he visited the Irkutsk Aviation Plant of the Irkut corporation and familiarised himself with the status of the preparations for the construction of the future MC-21 short/medium-haul airliner. The mating of the fuselage of the first airliner prototype is to be completed by late summer this year, and "we shall display the mated MC-21 fuselage at the MAKS 2015 air show (by videoconference)", he promised. In accordance with the schedule, the MC-21 prototype assembly is to be complete late in 2015, and the aircraft is to be rolled out for its trials. It is to conduct its maiden flight in the first half of 2016. "This is a drastically advanced plane featuring numerous cutting-edge solutions. It is facing many tests on the ground prior to its maiden flight", Yuri Slyusar explained.

The UAC President emphasised that concurrently with the plane’s development and construction, the marketing divisions of Irkut and leasing companies were in talks with potential customers, including major foreign airlines. At the same time, the company is looking into aftersales support solutions that, too, can be implemented in cooperation with major international providers of such services.

The certification and deliveries of the MC-21 are slated for 2018. "The aircraft seems to be competitive", says Yuri Slyusar. "From the technological point of view, it will be good enough even compared to the re-engined Airbus A320neo and Boeing 737MAX. We hope carriers will be interested in buying it", the UAC head concluded.

Russian-Chinese wide-body airliner programme
Yuri Slyusar spoke of the status of the programme on a wide-body airliner development planned in cooperation with Chinese partners. The programme's business concept was approved in autumn 2014, and now the programme is in the preliminary design phase that is to be completed in July 2015, when the programme passes the so-called 'second gate'. Task forces have been set up for the programme’s technical segment, marketing, promotion, aftersales support, maintenance and subcontractor supply. "Our colleagues in COMAC are very keen on the programme and do their utmost to pursue it", reported the UAC president. A rough budget of the programme has been figured out. As of October 2014, it was estimated at $13 billion, with the partners working on a parity basis.

Dwelling on the division of labour of the parties under the programme, Mr. Slyusar said that the cooperation would be adjusted as the preliminary design is being devised, but key decisions have been taken. If all goes to plan, Russia is to develop the composite wing and empennage, high-lift devices, etc. and China is to develop the fuselage. As for the powerplant, talks will be held with General Electric and Pratt&Whitney initially, but it is planned to develop an in-house powerful turbofan engine as an option at the next stage of the programme.

Yuri Slyusar emphasised that China was a strong, reliable and resources-rich partner with its own competences, growing market and clear-cut objectives. With a partner like that, the large-scale endeavour can succeed.

The family of future wide-body planes is supposed to have three versions. The baseline version is designed to carry 250-280 passengers at a distance of about 12,000 km. In addition, the development of a shrunk and a stretched versions of the airliner are planned. According to Mr. Slyusar, the beginning of the tests is tentatively slated for mid-2021, certification for 2023–2024 and full-rate production and delivery for 2025.

Regional turboprop aircraft
At present, UAC lacks a regional turboprop to succeed the obsolete An-24 and put up stiff competition to the ATR and Bombardier turboprops popular all over the world. In recent years, discussions focused on the feasibility of Russia re-launching the production of the Ilyushin Il-114 that was previously made in Tashkent, Uzbekistan. However, according to Yuri Slyusar, market players agree that the Il-114 in its current configuration is inexpedient, because it will hardly be able to become competitive on the market, given its development time. For this reason, aircraft industry players are considering the development of an advanced aircraft that would bring the concept of the Il-114 - quite good a plane in its day - a step forward, providing large-scale commonality of its systems and units with those of the Ilyushin Il-112V advanced light airlifter that is being under development now. The regional turboprop like that, which could be dubbed Il-212, is supposed to have the wing panels, avionics and powerplant similar to those of the Il-112V. At the same time, using the fuselage of the ramp-equipped Il-112V in a commercial plane seems to be non-optimal; hence, the new airliner is most likely to inherit the fuselage from the Il-114, though an increase in its diameter for the sake of higher passenger comfort is being given a thought.

"The commonality with the Il-112V, which we shall make, will enable our subcontractors to increase production numbers, which will slash the costs and development time and will speed up the launch of production, since the planes will have 60–70% commonality", believes Yuri Slyusar. However, a final decision on the launch of the advanced Russian passenger turboprop has not been made yet. Necessary investments and the programme timeframe are being estimated and potential customers are being consulted. "If we feel a signal from customers, from the market, indicating the need for the plane (and we do have got a preliminary signal like that), we will go over to the next phase", the UAC President said.


Yuri Slyusar was born in Rostov-on-Don on 20 July 1974.

In 1996 he graduated the law department of Moscow State University, in 2003 – the Academy of People's Economy of the government of the Russian Federation, Ph.D. (economy). In 2003–2007 he worked as a commercial director, Rostvertol JSC. Since 2005 he became a member of the Helicopter Programmes Committee, Oboronprom JSC.

In 2009 Yuri Slyusar appointed assistant to the industry and trade minister, in 2010 - director, Aircraft Industry Department, Russian Industry and Trade Ministry. Since 2012 Yuri Slyusar was deputy Minister of Industry and Trade.

(Photo: UAC)

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