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. Last Updated: 07/27/2016

Not All Eyes on Sky at Air Show

MTReporters looking at aircraft engines on display in Zhukovsky on Thursday.
ZHUKOVSKY, Moscow Region -- The MAKS air show kicks off next week and, beyond the daily displays of aerial acrobatics and military hardware, all aerospace industry eyes will be on the performance of Russian producers.

Boasting almost 800 participants from 39 countries, the Eighth Moscow Aviation and Space Salon, or MAKS 2007, will be the biggest in the 15-year history of the event and a vital litmus test of progress in the sector.

"This is a very important event in the life of our country," Federal Industry Agency head Boris Alyoshin said Thursday as workers scrambled frantically to get the show ready.

In an attempt to follow the model of leading international air show Le Bourget, in France -- right down to designating itself as a "salon" -- MAKS 2007, which will be opened by President Vladimir Putin and run from Tuesday to Sunday, has taken on a far more international dimension.

"The event is being raised to a truly global level to connect with the global market," Alyoshin said. The number of foreign firms involved this year will be 50 percent higher than the last event, two years ago.

Among the most spectacular participants will be a group of military aircraft from the U.S. Air Force, including a giant B-52 bomber, two F-15 fighters and two F-16 multirole fighter aircraft, as well as an aerial acrobatics troupe from France.

The first three days will be exclusively for industry representatives, but the gates open for the general public Friday, with tickets going for 350 rubles (about $13.50).

A special express train service set up by Russian Railways and free shuttles will carry the estimated 600,000 visitors to the sprawling Zhukovsky airfield, a one-hour drive east of Moscow.

Much of the attention from industry insiders will be focused on the United Aircraft Corporation, the recently formed national industry champion that will be making its MAKS debut. UAC will occupy two giant pavilions at the show, with one devoted to military and the other to civilian aircraft.

"I am a superstitious man and do not want to guess," UAC chief Alexei Fyodorov said when asked what he expected the value of contracts signed at this year's event would be.

"It will exceed the amount that we signed at Le Bourget," he said. At Le Bourget the Russian producer sealed orders for around $1 billion worth of aircraft.

Headed by First Deputy Prime Minister Sergei Ivanov, UAC was set up amid much fanfare following a November decree from Putin. Under the ubiquitous mantra of economic diversification, the restructuring of the sector is in an attempt to boost the flagging, yet crucial industry.

And the umbrella corporation, which combines manufacturers Sukhoi, Irkut, Tupolev, Ilyushin and MiG, has already set itself some very ambitious targets.

Speaking at a news conference Wednesday, Fyodorov said the state-owned company would have sold $250 billion worth of aircraft by 2025, representing about 4,500 military and civilian planes.

"This would give us a solid third place [behind Boeing and Airbus]," Fyodorov said.

Fundamental to the company's strategic goals is an attempt to reverse the current imbalance in favor of military over civilian aircraft, with military aircraft outselling civilian planes by a ratio of 8-to-1.

Since the collapse of the Soviet Union, the production of civilian aircraft has nose-dived, meaning that many domestic airlines have turned to foreign-built planes. At Le Bourget in June, leading domestic carriers S7 and Aeroflot both firmed up large orders with Airbus. Aeroflot also finalized a $3 billion deal with Boeing for 22 Dreamliners in June.

Now the Russian producers are looking to attract not only domestic carriers, but also foreign buyers.

Although the individual companies were remaining coy about potential deals, around 100 news conferences will be held at the MAKS event, Alyoshin said. Announcements about new contracts are expected from Sukhoi either Tuesday or Wednesday, and from Ilyushin Finance on Thursday.

"This year the keyword for the event is integration," said Oleg Pantaleyev, chief analyst at aviation monitoring agency Aviaport. "UAC has only just been formed, the helicopter construction industry has been merged, and concrete plans will be made for the creation of four engine-building companies."

"That means that this really is the place for important announcements," he said.

Key to the civilian sector's development are international orders for Sukhoi's flagship Superjet-100 project. Currently the vast majority of the firm orders for the jet come from Russian airlines, with Aeroflot having placed an order for 45.

At Le Bourget, the Superjet made its first tentative steps onto the international market when it signed a $280 million agreement to provide 10 of the jets to regional Italian carrier ItAli Airlines.

"UAC was set up precisely to increase our presence on the global market," Federal Industry Agency head Alyoshin said.

Alyoshin rejected claims that the Superjet-100 project was behind schedule as "exaggerated," and promised that the jet would be ready for the next MAKS show, in two years.

One U.S.-based analyst, however, expressed serious doubts about the attractiveness of the Russian civil proposition and the willingness of foreign buyers to invest.

"In the past, MAKS has been more about military equipment, and demand for Sukhoi fighters continues to look strong," said Richard Aboulafia, vice president of Virginia-based Teal Group. "But the commercial segment is quite another story."

"State-owned aircraft companies -- of any nationality -- have almost no chance in world commercial markets," Aboulafia added. "They're tough to work with and tough to depend upon."