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. Last Updated: 07/27/2016

Space Agency Merger Irks Plane Firms

Heads of major aviation companies, including the makers of Ilyushin and Tupolev planes, have urged the Kremlin to reverse a decision to put the entire industry under the jurisdiction of the Russian Space Agency.

President Boris Yeltsin's spokesman announced earlier this spring that the Russian Space Agency, or RKA, which already supervises 70 space enterprises, would assume command of 350 aviation companies.

The Economics Ministry, which had supervised aviation manufacturers, has been "unable to adequately resolve problems of the industry," presidential spokesman Dmitry Yakushkin said at a news conference March 11.

The federal government issued its own edict earlier this month to kick start the transfer.

Aviation industry officials, however, have said the move is more a reflection of a power struggle within the government than of economic concerns for the industry. The industry will only be helped, they say, if the Russian government comes up with generous financing.

Managers of 38 civilian and military aviation enterprises signed a joint appeal to Yeltsin last month urging him to reverse the transfer. The appeal defended the Economics Ministry's performance, saying the aviation industry posted a growth in production last year.

One aviation official, who asked not to be identified, said the transfer was engineered by Yeltsin's aerospace adviser Yevgeny Shaposhnikov. Shaposhnikov could not be reached Wednesday.

Supervision of the aviation industry has always been "a tasty piece of pie" since it accounts for 40 percent of the defense industry's output and for 60 percent of its exports, the official said.

Shaposhnikov first came out with the idea of uniting space and aviation industries under a joint command in the summer of 1997.

His efforts were derailed, however, by then-Prime Minister Viktor Chernomyrdin and then-Economics Minister Yakov Urinson.

Both Chernomyrdin and Urinson were ousted last year, allowing Shaposhnikov to resume his drive for a joint aerospace industry administration.

The concept is strongly supported by First Deputy Prime Minister Yury Maslyukov, a defense industry guru.

The industry will not, however, experience any revival under RKA management unless the federal government finds the cash to place more orders for Russian planes, said Yury Zasypkin of the Yakovlev design bureau.

"You can keep throwing us from agency to another, but this won't help unless they find something [money] for us," he said.

Oleg Demchenko, the head of the Moscow-based Yakovlev bureau, was among the signatories of the appeal to Yeltsin to reverse the transfer.

Others were the heads of the Moscow-based Ilyushin Aviation Complex and ANTK Tupolev companies; the chief of the Yaroslavl region-based Rybinskye Motory and the Moscow-based ANTK Soyuz engine manufacturers.

Not all aviation flagships joined this appeal, though.

For instance, VPK MAPO will wait to see whether RKA's energetic general director, Yury Koptev, manages to win better federal financing of the aviation industry before shaping its position, said an official with this Moscow-based manufacturer of MiG fighters.

He said VPK MAPO will welcome RKA as its commander if it manages to win more MiG orders.

"Otherwise we will treat them the way we have treated all these bosses who only pretend that they run us, but bring no money," the official said.

The industry's output grew by 8.1 percent last year compared to a 5.2 percent decline registered throughout Russian industries, according to the Economics Ministry's web site.

The 1998 output remained a far cry from that of the early 1990s when the state still had enough cash to order new planes.

For instance, there were only 12 civilian aircraft manufactured in 1998 compared to 232 in 1992.