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The Veil Of Silence Over SuperJet International

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The Veil Of Silence Over SuperJet International

The Veil Of Silence Over SuperJet International
May 01
13:47 2017

MIAMI – A veil of silence has descended over a major change in the ownership of SuperJet International (SJI), the joint venture between Russia’s Sukhoi Civil Aircraft Company and Italy’s Leonardo.

When Sukhoi was designing its SSJ100 Superjet regional jet, it was determined that this would be the mould-breaking Russian airliner that would win sales in Western markets.

With that in mind and to give peace of mind to prospective western customers, myriad major systems on board the aircraft were sourced from North American or European suppliers: Honeywell produced the APU, Thales the avionics and Hamilton Sundstrand the electrical system, for example.

SJI, based in Venice, was an important piece of that strategy. Its role was to handle the marketing and sales effort for Western markets, customization and delivery, training and worldwide after-sales support. SJI was set up with Italy’s Leonardo (then named Finmeccanica) having a 51% shareholding, with Sukhoi Civil Aircraft Company (SCAC) holding the other 49%.

However, the Italian shareholding has now been reduced to just 10%, after the Russian partners bought 41% of the Italian stake for a symbolic €1 ($1.10), giving it a 90% share.

This echoes the situation with SCAC, which was originally set up with the Italian partners having a ‘25% plus one share’ stake, which gave them a say in SCAC’s development.

As of December 2016, however, a Russian company, Sukhoi Aviation Holding, has been SCAC’s sole shareholder, with the Italians having pulled out.

A spokeswoman at SJI’s Venice offices referred all questions on the increase in Sukhoi’s shareholding in SJI to SCAC in Moscow. SCAC provided a brief statement saying that the change in SJI’s shareholdings “has been made as a part of co-operation restructuring in [the] SSJ100 program with [the] Italian partners.

“The Italian partner remains a shareholder in the program and will be managing key functions such as support in-flight testing, EASA certification, interior production, and supply as well as sales support. The international team continues working with all its expertise and full commitment to the program.” She declined to comment further.

It has been no secret that relations between the Italian and Russian partners in the Superjet project have been strained for some time. At the 2013 Paris Air Show, Finmeccanica said that the joint venture should be restructured or even abandoned, as the existing arrangement was no longer acceptable.

However, the Italian side has continued publicly to express confidence in the program. Indeed, 2015 brought the aircraft’s European breakthrough order, with Ireland’s CityJet ordering 15 with a further 10 options.

The underlying problem, believes leading aviation commentator Richard Aboulafia, is the difference in ‘industrial cultures’ between Russia and Italy.

“Russian aerospace, even civil aerospace, is a government-run program…with all the massive losses you associate with a government-run program. The Italians have an increasing focus on actually making a profit. These are just irreconcilable differences.”

Russia’s umbrella aviation company, United Aircraft Corporation, had originally been destined for privatization, notes Aboulafia, vice-president, analysis, at US-based Teal Group Corporation, but that process had been reversed and it was once more solidly government-owned.

Aboulafia accepts that the SSJ100 is a good aircraft; Russia, after all, has a long tradition of excellent aerodynamicists and manufacturing skills.

However, “The Russians have their virtues as engineers and manufacturers, but as far as marketing goes it’s not clear that they understand what’s needed.” That was what the Italians brought to the table. After several years of working together, “I think there may be a level of frustration.”

Like most airliners today, a family of models is essential to fully tap into differing market requirements. The 87 to 98-seat SSJ100 was supposed to be joined by a ‘shrunk’ 75-seat version, together with a stretched variant seating around 130.

Those new variants would require major investments by the Italians and Aboulafia believes that they simply do not have the appetite to sink more money into the project.

Even the existing model may need an upgrade, he believes, if the geared turbofan-powered E2 models of the Embraer E-Jet prove to have better fuel economy than the Franco-Russian PowerJet SaM 146 engines currently used on the SSJ100.

Perhaps the aircraft’s operational performance will yet bring some financial benefits to the partners. CityJet’s executive chairman, Pat Byrne, has been generous in his praise of the SSJ100, calling it “a game-changer…a fantastic aircraft.” CityJet’s aircraft will soon be seen operating wet leases for Air France and Brussels Airlines, giving major European carriers a chance to evaluate its performance.

The other Western buyer of the type, Mexico’s Interjet, is reportedly also well-pleased with the aircraft and operates it into US airports.

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Alan Dron

Alan Dron

Old-school scribe who now is fortunate enough to earn a fair percentage of his income by writing about aviation. Still laments the passing of Concorde and has been known to take a day trip to the Middle East to interview an airline executive.

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