«Our Obligations Are Being Fulfilled in Time»

Interview with Alexander MIKHEEV, Director of the Air Force Department of Rosoboronexport.

What is the expected volume of supplies of arms and military equipment for air force in 2001?

Of the total portfolio of contractual obligations of Rosoboronexport in 2001, 70% involves the export of aircraft and services provided through the Air Force Department.  The largest projects have to do with supplies and licensed produc­tion of Su-type combat aircraft systems.  Also, we signed a number of contracts for the modernization of previously supplied equipment and foreign customer-oriented research and de­velopment.

How are those contracts being fulfilled?  Is there a chance that some contractual obliga­tions or deadlines for shipments may not be met?

Theoretically, there is always a possibility that some deadlines may not be met.  At the present time, aircraft equipment is supplied taking into consideration the demands of a given foreign customer.  This always requires a large amount of research and development aimed at the inte­gration of various equipment, including foreign-made equipment.  Nevertheless, our contractual obligations are being fulfilled in time.  Presently, no changes in shipment deadlines for active contracts are expected.  Simultaneously, we are working on long-term programs with our traditional partners - China, India and Malaysia, - as well as on contracts related to the moderni­zation, repair and service of previously supplied equipment.  It is not easy to deal with contracts that involve significant international industrial cooperation with Western companies, such as the Su-30MKI deal.  Timely fulfillment of such contracts depends on all participants’ precise fulfillment of their own obligations.

What is the dominant type of equipment sup­plied by your department?

Mainly Su-30 type airplanes.  However, after the merger of Rosvoorouzhenie and Promexport we managed to integrate the supply lists of these two intermediary companies.  As a result, the variety of shipments was significantly in­creased.  Actually, that was the reason behind the structural reorganization of the former Air Force department of Rosvoorouzhenie.  I believe that the combination of experience and potential of those organizations will allow Rosoboronex­port to increase the amount of contracts and broaden its presence on the world arms market in the nearest future.

We are working with particular intensity on a multi-faceted program of modernization of transport helicopters and assault-transport heli­copters of Russian make, for use by foreign cus­tomers.  Presently, there is a demand in the ex­ternal market.  Concrete commercial models have been drawn up for our promising combat helicopter systems.  Export versions of our heli­copters will be competitive with foreign models.  At the same time, in several tenders we work jointly with a number of helicopter producers.  At present, we have completed the development of a novel concept for marketing military trans­port aircraft.   By way of small contracts that involve repair and modernization of aircraft equipment, engineering work, spare parts ship­ments - contracts valued at less than $ 100 mil­lion - we are broadening the presence of Roso­boronexport on the world market and are re­turning to those regions from which we had been absent for five years or more.

But how can Russia be a supplier of transport airplanes?  Such aircraft are produced in Ukraine and Uzbekistan.

Presently, the degree of saturation of transport aircraft in the countries that purchase Russian military equipment, as well as the difficulties experienced by our aircraft industry, has caused a severe slowdown of export growth with regard to military transport aircraft.

However, there is potential for supplying Il-76MD and Il-76MF (Candid) transport air­planes and Il-78MK (Midas) flying tankers to a number of countries.  Foreign customers are being offered equipment from the arsenals, as well as that produced in cooperation with Uzbekistan.  As far as cooperation with Ukraine and Uzbekistan is concerned, we study these subjects, conduct negotiations, and outline the directions of a possible partnership with Tash­kent, with developer support provided by the Iliushin Design Bureau.

Given government support, such supplies of air­craft would allow the Russian aircraft industry to commence work upon new types of transport airplanes that could occupy an honored place on the world aviation market.

Marketing efforts for promoting the Be-200, Tu-204, Tu-214, Tu-234, and Tu-334 transport air­planes on foreign markets are also being under­taken.

The MiG-29 fighters sold well before 1995.  Why, in your opinion, are they now entering the market with such difficulty?

The MiG-29 (Fulcrum) fighters have been ex­ported since 1987.  They have been supplied to 26 countries.

MiG-29 fighters are used in the German Air Force, and have demonstrated high flight per­formance characteristics.  The MiG-29 fighter won a number of training fights with the F-15 and the F-16 fighters.  From the early 1990s, the main requirement of foreign customers with regard to modern planes has been multi-func­tionality.  At the present time, creation of multi-functional MiG-29SMT and MiG-29UBT fighters has been completed.  Those planes can carry out diverse tasks («air-to-air», «air-to-sur­face») and use all existing strike options, in­cluding high-precision guided missiles with a radar infrared laser-equipped and televised homing head.  The combat capabilities of those planes are several times higher than those of their predecessors.  Actually, in the last few years the RAC «MiG» signed a number of con­tracts for the planes of the MiG -29 type.  Rosoboronexport is participating in several pro­jects at the pre-contract stage, as well as with the preparation of contracts.  Presently, we are undertaking joint efforts to promote the MiG-29K plane on the world market.

Do you expect that there will be a market demand for the MiG-31 interceptor?

In principle, this is a very interesting and promising airplane.  Until recently, there were certain restrictions regarding the promotion of MiG-31 (Foxhound) on the external market.  However, today this plane is included on the list of arms and military equipment cleared for export. Nevertheless, one should realize that the MiG-31 was created for specific purposes.  This plane is a long-distance interceptor and has a capacity for information exchange, which allows MiG-31 to guide other planes - such as MiG-29 or Su-27 (Flanker) - to their targets.  Therefore, the MiG-31 can be offered only to certain coun­tries.  Besides, at the present time, work is be­ing carried out to equip the MiG-31 plane with new avionics and weapons.  When these planes are included in air groups, the defense capabili­ties of the air force and air defense will become more efficient.

How does Rosoboronexport develop its rela­tions with the RAC «MiG», a company that has the right to trade independently on the external market?

Our relations are being developed on the basis of mutual respect and benefit. The RAC «MiG» has been granted the right to conduct independent foreign trade activities.  The corpo­ration has sufficient experience in military-tech­nical cooperation and well-qualified staff that is capable of promoting the MiG planes on the ex­ternal market, both independently and in cooperation with Rosoboronexport.  The mar­keting of combat aircraft is always accompanied by severe competition and requires a coordina­tion of efforts.  Presently, we are looking for new forms of cooperation that would enable us to increase the efficiency of marketing the MiG family planes overseas, in view of the potential of both the RAC «MiG» and Rosoboronexport.

Did India express interest in the MiG-AT plane after the freezing of negotiations with BAe Systems on the contract for 66 Hawk trainers?

Yes, India did express interest in Russian trainers - but not necessarily the MiG-AT.  The MiG-AT and Yak-130 planes are drastically su­perior to the Hawk as far as technical charac­teristics are concerned.  However, we are not ready to start immediate serial production of those planes and to make large shipments within the next 9 to 12 months.  We are ready to par­ticipate in promoting trainers on the Indian market and to offer programs that would be ac­ceptable to India.

Why is it that the Su-25 ground attack air­craft, which has performed so brilliantly during the Afghan war and the conflict be­tween Iraq and Iran, was virtually not sold overseas at all during the 1990s, with the ex­ception of small sales from the arsenals of Belarus and Ukraine?

In the 1990s, many countries’ demand shifted towards multi-functional planes that are able to perform their tasks successfully not only with regard to air targets, but also to strike the whole spectrum of ground targets with high-precision guided weapons, using laser and tele­vised guidance systems as well as correction from satellite navigation systems.  Nevertheless, local armed conflicts have demonstrated that combat success is determined, to a large extent, by the efficiency of Su-25 (Frogfoot) combat plane support.  Presently, the market is geared towards attack aircraft that can work around the clock and in any weather conditions.  We can fulfill this demand by our offer of the Su-39 ground attack aircraft with the ‘Kopyo’ radar which provides for the plane’s multi-functional­ity with regard to both air targets and ground targets, while maintaining all of the advantages of the Su-25 plane in reliability and combat survival capacity tested in real combat condi­tions.

Why, in your opinion, did Russia lose all of the large tenders for aviation equipment con­ducted in the last five to six years?  Namely, the aircraft tenders carried out by Greece and United Arab Emirates, as well as the Turkish helicopter tender.

All of our tender offers were quite competitive.  However, export promotion of significant amounts of large weapons systems is related to solving the complicated military-political prob­lems of a nation, and also implies creation of se­rious industrial alliances with the importing country.  A purchase of a large amount of air­planes leads to a radical change of the entire in­frastructure of the country’s air force and air defense.  In the tenders that you have men­tioned, the selection of the winner was carried out before the official completion of the tender and amounted to a purely political decision, de­spite the fact that in Turkey our helicopter was considered the best from the technical stand­point.  Yet, the issue is not completely settled: Turkey has asked us not to quit the scene, since the United States have recently refused to ful­fill a number of requirements of the tender.

Presently, Rosoboronexport is participating in complex tenders for multi-functional planes and attack helicopters offered by the Defense Minis­try of the Republic of Korea.

Tender programs presuppose the establishment of licensed production in the purchasing coun­try, the fulfillment of offset programs, and the development of integrated programs of service support in accordance with Western standards.  Our tender offers regarding the Su-35 aircraft and the Ka-52K (Hokum B) helicopters were prepared in full agreement with the customer’s requirements and can compete with the offers of other tender participants.  In spite of the very complicated political situation, we have a chance to win.

How do you evaluate the situation on the market for modernization of Soviet and Rus­sian-made aircraft?  For example, has there been a professional evaluation of the legality of the activities of the Israeli firms that work on this market?

Legal and technical expertise of the Israeli firms’ work on modernization of Russian-made aircraft and helicopters is now being conducted.  Without a doubt, some measures will be under­taken.  One should realize, however, that a dif­ference exists between the equipment supplied by us, which cannot be sold to a third party or modernized without our consent, and the equipment which we do not own, and upon which we have no rights.

Also, the Israelis are unable to offer moderniza­tion of the helicopter’s platform and the aircraft frame, or the prolongation of resources of the aircraft equipment.  Neither are they able to supply spare parts or to ensure flight security of Russian-made aircraft.  They have problems with integration of weapons systems.  What they present at the exhibitions is very aggressive and spectacular, but, as you might have noticed, is not followed by large contracts.  One thing is to make statements and to advertise, another thing is to really fine-tune aircraft which would have to be subjected to testing with developer support.  On the other hand, we are ready to work with the Israelis if a given customer de­sires the participation of Israeli firms.  But in any case, everything must be done with developer support provided by Russian design bureaus.

In general, we feel rather confident on that market and will sign a number of contracts in the near future, regardless of any counter-efforts of our competitors, including the Israelis.

In five to seven years, JSF aircraft may ap­pear on the market.  How, in your opinion, will this influence the trade in aviation-re­lated arms and military equipment?

Russian aircraft equipment of the 4 + generation has a sufficient export potential and export per­spectives in the next eight to ten years.

Presently, F-22A Raptor experimental planes and light STOVL fighters, created within the framework of the JSF (Joint Strike Fighter) program on the basis of X-32 (Boeing) and X-35 (Lockheed) planes of various modifications, un­dergo intensive testing.  The estimated cost of a JSF plane is between $30 million and $35 mil­lion.  Considering the high cost of the F-22A (over $100 million), this plane will be supplied only for internal use.  The experts predict that in 2010 fifth generation airplanes will push both the Russian 4 + generation planes and the new European Typhoon and Rafale models off the market.

Russian industry is working to create a fifth generation airplane.  Export of the fifth genera­tion airplanes - Russian as well as American - may become possible by 2010.  That will be the time to evaluate the outcome of the competition between Russia and the United States in creating new aircraft and the two countries’ success in applying their scientific, industrial, and intellectual potential to real projects.