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Modern economic POTENTIAL OF UKRAINE |
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Aircraft and aerospace industryUkraine is one of the few countries of the world to possess a full cycle of aerospace hardware engineering and production. Ukrainian-made aircraft boast a large number of world records in aircraft transportation, and Antonov is famous within the industry. Regrettably, the accomplishments of the Ukrainian aerospace industry are mostly the result of its Soviet heritage. The beginning of the new century in the aircraft industry not only brought new and high standards of quality for world market entrance, but also gave absolutely new opportunities to Ukrainian aviators. Ukrainian aircraft building is represented by such giants as Aviant Kiev Plant; Kharkov Aircraft Manufacturing Plant; a number of design offices, the most notable of which is the Antonov ANTK bureau; aircraft repair plants such as Kiev’s Aircraft Repair plant No.410, Aviakon Aircraft Repair Plant of Konotop, and others. A high level of customer demand worldwide helped overcome an arduous period of development and preserve the available engineering and production potential along with human resources. Today the market for large planes is split between leading transnational corporations. After the notable contraction in the passenger aircraft market in 2001-2003, however, demand for these planes is trending upward again as well. The largest corporations, which earlier were forced to introduce the most of the newest technologies into passenger planes while lowering the price, are now showing a much greater number of orders and aircraft manufactured. With these tendencies, Ukrainian aircraft producers also get enormous opportunities to grow and strengthen their positions in the world markets. With such giants, the potential investor might miss a huge and very lucrative segment of Ukraine’s aircraft industry: companies producing ultra light aircraft (ultra light planes, hang-gliders, moto hang-gliders, and paragliders), which are traditionally left in the shadows of the large plants. At this time, Ukraine still has no domestic market for such aircraft, but foreign markets are open for them. Thus, LLC AEROS in 1998 became the leader by sales volume of mastless hang-gliders in the USA. In 2005-2006, the world leading hang-gliders used aircraft of Ukrainian origin. The largest producers of light and ultra light aircraft in Ukraine were formed under design officers, specialized schools, and sport clubs such as AEROPRACT company (Kiev), AEROS (Kiev), LILIENTAL (Kharkov), and OstWestConsulting (Kherson). These companies are involved in official serial production of ultra light aircraft; yet, there are many small companies engineering non-serial and often non-commercial models. The total output of light and ultra light planes in Ukraine does not exceed 200 units per year. Total hang-glider and paraglider production is approximately 1,000 units per year. Most of the engineered aircrafts are shipped for export, and the buyers of Ukrainian superlight aircraft are the USA, Australia, New Zealand, the UK, and France. An active export policy by Ukrainian producers is aimed at establishing contacts with foreign mediators and creating companies to run direct sales. The popularity and competitiveness of Ukrainian products are backed by several factors brought together; high technologies and accumulated experience of aircraft design and engineering; use only of high quality, mostly imported, components, the availability of quality and safety certificates issued by specialized international organizations, as well as the fair asking price traditional for Ukrainian goods. In the light of the skyrocketing production of light aircraft, production by large plants shows rather moderate growth dynamics, which is explained by a long period of quality and structural changes. Developing and producing of new aircraft models accompanied with the essential tests and certification take several years. Ukraine’s aircraft building, therefore, is now in the determining stage of the transformation process, which targets to bring output of Ukrainian aircraft producers in accordance with world standards and requirements. The transition to new aircraft types, which correspond to stricter requirements regarding safety, economic efficiency, and environmental norms, will help open foreign markets to new Ukrainian planes. Simultaneously, the issue came up to merge discrete enterprises in the aircraft industry in order to simplify production cooperation and help consolidate the efforts of the largest market operator. Antonov Corporation Union, embracing Antonov ANTK design bureau, AVIANT KIAZ, KhGAPP (Kharkov State Aircraft Production Enterprise) and Kiev Aircraft Repair Plant No.410, has all rights for using the ANTONOV trademark. This will contribute to higher transparency in relations. The main specialization of the Ukrainian aircraft manufacturing industry includes transportation aircraft and passenger planes for regional and medium-haul routes. Kharkov State Aircraft Production Enterprise produces the AN-140 short-haul trunk line passenger aircraft in several versions, as well as the AN-74 aircraft, the world’s only light transportation aircraft with gas turbine jets. In 2000-2005, the enterprise constructed and sold 19 finished planes to clients. At the same time, the company intensified cooperation with the Iranian HESA aircraft building company. The partnership covers supplies of aircraft component sets by the Kharkov-based enterprise to Iran for further assembling. In November 2005, the parties agreed to increase volumes of aircraft assembly in Iran to 12 planes per annum. The rise in sales is first caused by higher world demand for aircraft in the AN-140 class, which in economic terms, is one of the class leaders. Another reason is the improvement in the piloting and navigational systems of AN-74 planes the newest version of AN-74T-200A, which helped confirm the full compliance of the Kharkov-made planes to modern and future requirements. Kharkov State Aircraft Production Enterprise already has orders for 5-7 years ahead. Over the course of the Dubai-2005 aircraft exhibition alone, the plant signed agreements for supplies of no less than 20 AN-74 and 25 AN-140, with a total value of approximately USD 592 mn. The promising markets for Ukrainian aircraft producers are countries in Asia and Africa which have rather low demand for American and European planes that are expensive but not always of higher quality. Foremost, such counties include Saudi Arabia, Libya, Egypt, the United Arab Emirates, and Pakistan. Iran imports aircraft component sets for assembly. The Russian Federation and the rest of CIS remain the second direction of Ukrainian aircraft export. It should be noted that the export of Ukrainian products to Russia features no finished planes, but rather technologies and separate parts for plane assembly at Russia’s OJSC “Aviakor – Aircraft plant” (Samara), with which the Kharkov enterprise has entered agreements on production cooperation. In this stage, up to 70% of the components for the AN-140 manufactured in Russia originate from Ukraine. The main suppliers of components for aircraft produced by the Kharkov-based enterprise are Ukrainian companies. However, some parts are imported: Russia supplies particular elements for piloting and navigational systems, radio equipment parts, and hydraulic units; Kazakhstan – fire prevention equipment; and Azerbaijan – elements for domestically assembled components. The enterprise buys electric equipment parts and cables from Germany and France, seats from Switzerland, and GPS and TCAS systems from the USA. Besides to the continued construction of the AN-32, which is undergoing an upgrade, AVIANT Kiev Aircraft Plant relates its future to launching serial production of the AN-148, AN-70, TU-334, and AN-3 planes. Besides, the company plans to finish converting the AN-124 plane for civil use in the AN-124-100 version. These aircraft are entries in transport and civil aviation: AN-70 is a very promising medium transportation aircraft, and has no rivals in the world in terms of the combination of airfield condition requirements, payload, flight performance, and operating economy. The AN-70 was to become a basis for creating a military transportation plane for NATO countries; AN-32 – despite the serious age of the base model, the early version earned an excellent reputation in tropical and damp equatorial climates; the enterprise keeps supplying the aircraft to India. The AN-32 is a dominant plane in numbers in Africa; AN-124 – heavy transportation plane – unique in cargo capacity and cost per operational hour; AN-148 – turbojet passenger plane of medium size designed for regional commutes and medium-haul trunk lines; TU-334 – long-range passenger airplane for regional and short trunk lines. Like the Kharkov plant, AVIANT actively cooperates with the Russian aircraft industry. Supplies of components are very similar to those in Kharkov. This is because all aircraft created under the Antonov brand are designed by the Antonov ANTK design bureau and are then forwarded for production to the Kharkov or Kiev aircraft plants. Kiev AVIANT aircraft plant’s production partners are VASO Voronezh Joint-Stock Aircraft-building Company, FGUP POLET Production Union, CJSC Aviastar-SP, and Kazan Aircraft Production Union. Antonov makes sure that there are contracts linked with buyers before serial production of a new aircraft begins. The average cost of a plane is USD 15-20 mn, and the gross portfolio of orders is estimated at some USD 0.5 bn. Analysts calculate that aircraft exports in 2005 came to USD 136.5 mn, which is 4.2% higher than the 2004 figure. Aircraft imports to Ukraine are lower than export shipments, which is explained by the use of domestic products. In 2005, Ukraine imported aircraft for a total value of USD 34.3 mn – a 21.4% fall compared to 2004. Dynamics of export and import of aircraft is illustrated by Diagram 1.
Dynamics of Ukraine’s foreign trade in aircraft devices over 2001-2005, financial value, USD Along with aircraft building and exporting components, the aircraft repair services industry is traditionally well developed and has good potential. The main specialization of Ukrainian aircraft repair plants is repair of civil aircraft from Antonov and Tupolev, military planes, and helicopters. A third of the more than 22 ths. Antonov planes that have been built throughout the brand history are still in use. This should provide a good order portfolio for Ukrainian aircraft repair plants, which are utilizing their unique experience and techniques. With its long history and traditions, the aircraft industry in Ukraine should be optimistic about its future and expect further cooperation with foreign clients and partners. Aerospace industryAnalysts say that space is the most lucrative industry of the new century. One of the main world tendencies is expanding the scale of space exploration and use. Today more than 120 countries are involved in space activities, of which 20 states are very active. According to preliminary data, turnover of space rocket segment in 2005 came to USD 400 mn. The average rate of return in aerospace production is 25%, which encourages continuous interest by large investors. In 2005, investments backed 40% of space projects. Ukraine is among five countries worldwide which has a complete circuit of space rocket production. Ukrainian enterprises own 17 out of 22 world technologies and participate in 50 international projects. The entire space rocket industry in Ukraine has been managed by the National Space Agency of Ukraine since 1992. The agency includes 30 enterprises, scientific research institutes, and design offices. Thanks to close integration with European and Russian companies as well as participation in international projects, Ukrainian output and companies are known all over the world. YuzhMash State Design Office and Yuzhnyi Machine-building Plant Production Union take part in the Sea Launch program, which is the most ambitious and successful international project to date. The Zenit carrier rocket was designed by these two Ukrainian companies and represents them in the project. Space rocket systems designed by these companies are run at three spaceports – Plesetsk, Baykonur, and Sea Launch. Long-term analysis of world tendencies in the development of means of spacecraft launch and the specificity of Ukraine’s condition highlight three promising directions to develop the industry:
Under the new conditions, the enterprise chose international space cooperation as key direction for the implementation and further development of its unique scientific, technical, technological, and production potential. The first steps in this way showed the willingness and capability of Yuzhnoye Design Office to carry out successful cooperation with leading enterprises in the USA, Russia, and Europe in fulfilling of the most complex space projects. Zenit, as an environmentally safe rocket system, became a world-renown accomplishment of Yuzhnoye Design Office. The system is one of the world best carriers with fully automated processes for take-off and superprecise space injection. The first stage of Zenit was used as side accelerators in the Energy - Buran universal space system. This is another proof that a whole family of possible space carriers can be based upon Zenit. The first carrier rocket Zenit-M (2-stage version Zenit-2M and 3-stage version Zenit-3M) should be launched in 2006 under the Ground Start program. Plans are to do 3-4 launches each year, with a payback period starting in 5-6 years. Sea Launch International was set up to implement the Sea Launch project. Its founders include the U.S. Boeing Commercial Space company (40% in the charter capital), Russian Energy Space Rocket Corporation named after S.P.Korolyov (25%), Kvaerner Maritime a.s. of Norway (20%), as well as aerospace enterprises of Ukraine – YuzhMashZavod Production Union and Yuzhnoye State Design Office named after M.K.Yangel (gross 15%). The project results expected by Ukraine are that the production volumes and capabilities of the Zenit carrier rocket will back 5-6 launches of the Zenit-2M each year. Despite the planned financial support of the aerospace industry by the state, which was declared by the Budget resolution for 2006 (article “On state financing of aerospace industry”), additional foreign investments will still be more than welcome. Besides, space exploration will continue in wide international cooperation, and Ukraine, with its enormous scientific and technical potential in many industries will preserve and expand its contribution in space exploration.
Development directions of space industry in Ukraine, 2000-2005, %
Sources of financing for projects of space technologies’ implementation, according to data of the National Space Agency of Ukraine, %. |
