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. Last Updated: 07/27/2016

Plan Being Drafted to Merge MiG And Sukhoi

The government is drawing up a plan to merge the military aviation powerhouses Sukhoi and MiG in a holding as part of a widescale program to streamline the bloated defense industry.

The proposal, which has been floated by the government several times but never before drafted, would unite AVPK Sukhoi and MiG Russian Aircraft Co. into the Combat Aircraft of Russia holding, Interfax reported Friday. The plan is being drafted by the Industry, Science and Technology Ministry.

Sukhoi is the flagship of the defense industry with annual sales of more than $1 billion. Sukhoi recently sold a Su-30MKI fight production license to India in a $3.5 billion deal mediated by trader Rosoboronexport. India and China have purchased dozens of Su-27 fighters and their modifications from Sukhoi over the past few years.

MiG, however, has flown into turbulent skies. The aircraft maker has kept its head above water by selling spare parts for exported fighters, and it hasn't paid its employees since November, according to a MiG source who asked not to be identified.

The source said MiG is pinning its hopes on selling up to 60 MiG-29K fighters and the Admiral Gorshkov aircraft carrier to India, a long-heralded deal that has stalled.

Few details have been made public about the latest proposal to merge Sukhoi and MiG, an idea first touted by then-First Deputy Prime Minister Yury Maslyukov in January 1999.

Yury Koptev, head of the Russian Aviation and Space Agency, brought the plan back into the spotlight earlier this month, telling reporters at a news conference that steps were being taken toward the merger. He said the holding would also include the cash-strapped Yakovlev design bureau, which hasn't designed a new warplane in years and is seeking financing for its nascent YaK-130 trainer.

A merger could be a way to put the military aircraft sector back on its feet, but the plan would only be feasible if the government awards the holding a contract, the MiG official said.

"It would only make sense if there is a specific project to be united around and there is money to pursue it," he said.

An official with Sukhoi agreed, saying his company and MiG could work together in building a fifth-generation fighter — but only if they were to get funding from the government for such a program.

Air Force chief General Anatoly Kornukov told reporters earlier this month that prototypes of fifth-generation fighters drawn up by MiG and Sukhoi were unsatisfactory.

The Sukhoi official, who asked not to be named, said the government has yet to send a list of its requirements for such a fighter to aircraft makers.

The proposed merger is part of a draft government program — which has yet to win the Kremlin's approval — to consolidate most of the defense industry's 1,700 companies into several dozen state-controlled holdings.

However, President Vladimir Putin has signaled that he wants to consolidate the defense sector and a merger between MiG and Sukhoi could get his go-ahead, defense experts said. Putin last year issued a number of decrees to boost the state's control over the sector and pave the way for the creation of sprawling defense holdings.