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. Last Updated: 07/27/2016

Civil Air Takes Case For Cash to Duma

As the State Duma prepares to debate the 2002 budget, civil aviation players on Monday appealed to lawmakers to double the 2.3 billion rubles ($73 million) earmarked for the sector to help pull it out of a protracted tailspin.

"The 2.3 billion rubles allocated in the 2002 budget for the support of the civil aviation industry is enough to get us just one and a half airplanes," Yury Koptev, head of the Russian Aviation and Space Agency, told Duma deputies.

"One needs a big microscope to see that sum," he said.

Other aviation officials said airlines need at least 1,000 new planes over the next 10 to 15 years as they phase out the existing 6,000 aircraft, which were mostly built from the 1960s to 1980s. The new aircraft will include 500 passenger jets, 80 cargo planes and 340 helicopters, Koptev said, adding that only four new aircraft were delivered last year.

Also, funds are needed to help airlines buy new engines and other equipment for workhorses such as Il-86, Tu-134 and Il-76 planes, which must comply with international noise and pollution standards that will come into force in April 2002. Koptev said domestic airlines operate only 11 Il-96-300s, 14 Tu-204s and one Tu-214 that comply with international standards.

With the profits of all of Russia's 284 airlines amounting to a meager 5.1 billion rubles ($174 million) in the first six months of this year, they cannot afford to purchase new aircraft, Deputy Transportation Minister Karl Ruppel said. "It's not fair to put it on the shoulders of the airlines," he said. "The state, too, should help with financing."

Viktor Livanov, director of the Ilyushin aviation complex, said two aircraft leasing programs approved by the government at the end of the summer were already requiring an extra disbursement of 3 billion rubles from this year's budget. Another 1 billion rubles would have to come from the 2002 budget for those programs, he said.

One leasing project is spearheaded by Ilyushin Finance Co. and is for 10 Il-96-300 jets. The other is for 10 Tu-214s through Finance Leasing Co.

Koptev said the two projects are not enough to rescue the industry because they concern aircraft that were already half-built. "A full production cycle has to be reanimated," Koptev said, adding that the three major civil aviation plants in Ulyanovsk, Kazan and Voronezh need millions of dollars to get the process started.

"Aviastar will need $100 million in the next two years," Koptev said, referring to the plant in Ulyanovsk that produces Tu-204s.

Voronezh will need at least $40 million, he added.

"If within two years this work is not done, there will be no need to talk about revival of [aircraft production]," Koptev warned.

Meanwhile, Aeroflot general director Valery Okulov said funds are needed to create hub airports. Moscow services about 60 percent of the country's air traffic, he said. "There's no direct connection between Chelyabinsk and Perm, only through Moscow," he said. "We think that the system of creating regional hubs is economically viable for organizing air traffic in Russia."

The Duma is to debate the 2002 budget Friday.