Who travels in our aircrafts and what is the future of Ukrainian aircraft industy? Hero of Ukraine Dmytro Kiva, the president and leading designer of the State enterprise "Antonov", answered these questions in an interview with ForUm.
The office of the president is big enough with a huge conference table and a portrait of the founder of Ukrainian aircraft industry Oleh Antonov. The walls are covered with numerous diplomas, certificates and awards.
- Dmytro, what are the competitive advantages of An aircrafts?
- We are not rivals with "Boeing" or "Airbus" in the sector of passenger aircrafts. We produce regional aircrafts of An family - An-140, An-148, An-158. We also build cargo and military-cargo aircrafts An-72, An-74, An-70. Now we are working on a new program on production of An-178 and on modernization and mass production of An-124 "Ruslan". This is our niche in the market.
Our passenger jet An-148 is certified for operations on unpaved airfields. Our aircrafts are highly reliable and endurable, comparing to other models. They are undemanding in maintenance and use under difficult conditions of Asia, Russian Ural region, Latin America, Africa. In addition, the aircrafts do not yield to none on their technical and economical characteristics and meet all modern standards of flight security.
The main criterion of any plane is flight safety, thus safety is our main task. Other criteria are also important: economic figures, aircraft performance characteristics, fuel consumption. Maintenance regulations and technologies are of no less importance. To design a plane is one thing, but to provide its continuous economically beneficial operation with after-sales service is another. As for the last segment - after-sales service - we are lagging behind. Back then, we used to work according to a different system. Everything was centralized: maintenance depot, repair depots and service stations. Now we have to restore and manage this department in the house.
Passenger liners must be comfortable. If a passenger is not comfortable during a flight, he will not fly it again. Coming back from Moscow recently, I flew with Еmbraer (Brazilian airplane). I can tell you that it yields to our An-148 in comfort, as it is narrow. Seats are uncomfortable and aisles are narrow, which complicates the work of flight attendants. Unfortunately, our country does not care much about domestic producer. We produce An-158 with 100 seats, but Ukraine buys Еmbraer.
- Why does it happen?
–Еmbraer has more privileges in Ukraine than we do. Our aircraft industry does not provide for support system of national producer. On the contrary, foreign rivals have all privileges.
According to the scheme, a plane is temporary imported on Ukraine's customs territory. Then an airline rents this plane for a year without paying taxes and fees. After a year, one of the flights abroad gets documented as exportation and new importation of the plane back to Ukraine's customs territory.
To build a plane our plant, in turn, must pay 20% VAT for components bought in Ukraine and 20% customs fee for imported components. A plane costs about 25 million dollars, and 2.5 million out of the total are "negative preferences."
- What about foreign markets?
- We work successfully with Asian countries, Latin America, Russia.
- They say that the competition on the aircraft market is so big that rivals do not disdain to get their hands dirty. They also say that special services of rival countries may be involved into plane crashes during test flights, including the crash of An-70. Is it true?
- No, it's not. Speaking about An-70, when it clashed with an accompanying plane, it was the mistake of pilots of both aircrafts. Nobody could have set up a crash on purpose, it was the human factor to cause the accident.
Speaking in general, the majority of people do have faith, besides there are laws of justice and decency. I don't even allow a possibility of evil mind. However, rivals do not sleep. There are people, spreading negative information, including Ukrainians, who acts not so much from the idea to help rivals, but from the desire to steal something, as we are the biggest enterprise in Kyiv with 13 thousand employees.
- A plane is not a cheap affair. A few companies can purchase an aircraft directly, without credit or leasing. I read "Boeing" offers beneficial financial conditions for its clients to attract more customers. What do we do?
- Aircraft producers do have their banks for working with clients. But what we need is state support of export, including preferential credits. Last year we earned $400 million. We sold currency to the state and paid our employees in hryvnias. But despite the fact that we earn currency for the state, the state doesn't support us. In fact, it demands more money.
However, the question is not only in financial support. The management system is of no less importance, and it is far from perfect. When Ukraine had Ministry of industrial policy, it was engaged into the development of aircraft industry policy. Now we have the Agency on corporate rights and property, which cares about income only. But to earn something we must invest something first.
So, we do not sell aircrafts on credit, though there are certain leasing schemes. Russian leasing company "Ilyushin Finance Co.", for example, buys our planes and sells it on leasing or credit.
- Let's go back to our market. In 1990 Ukrainians could fly from any regional and even some district centers to Kyiv. Now the domestic flights market is limited to travel between Kyiv and some regional centers, as well as seasonal flights to Crimea. Why?
In Russia, for example, the volume of flights has reduced by 100 times for 22 years. The same has happened in Ukraine. The flights cover only Kyiv-Donetsk, Kyiv-Kharkiv, Kyiv-Lviv destinations. There are no more flights to Odessa, Chernihiv, Mykolayv, Frankovsk. I remember when I was a student I could fly from Kyiv to Kharkiv for 8 rubles, while my mum's pension was 110 rubles. I could afford the flight even with my scholarship. Now the flight Kyiv-Kharkiv costs 1500 hryvnias. That's the answer to the question why flights are no longer popular.
You said before that "Antonov" earned $400 million last year. Does the plant cover its own expenses?
- It does. For the last four years we have not received any budget means. Everything we have is earned by the plant. Moreover, we develop new aircraft models at our own expenses.
- Does the state take money from you?
- We transfer 500 thousand hryvnais to the state budget annually, but the state wants more and keeps increasing various taxes and fees. We still do have an approved financial plan for this year, as they say what we transfer is not enough and we must give more.
But how can we? Apart from direct expenses for production, we finance social infrastructure. By the way, we have built two apartment blocks with 112 one-room apartments each for young specialists. Families have already moved in one of them. The Premier even visited the delivery ceremony. He said: "Invest more in the development of production." But we need time to invest more. At the beginning the aircraft production is unprofitable. The first planes are always unprofitable, for any enterprises. But when an enterprise starts mass production, the costs of planes decrease and the enterprise starts getting profits.
Some officials tell us to break unprofitable contracts. You see, the process is managed by people who are not specialists either in aviation or in economy. When I told this to Mykola Azarov, he smiled and said: "Do not pay attention, keep working". The point is that the higher authorities understand the situation, but the middle chain of officials does not.
- What is the average salary at your plant?
- The average salary is about 4600 hryvnias, but for young specialists we set bonuses in the amount of 25, 50 or even 100% of the salary. We have very skilled youth.
- UAH 4600 is not much for Kyiv. Do you have high employee turnover?
- Unfortunately, yes. There is even a recruiting center in Kyiv, which drain away our staff, offering them jobs in Europe, Russia, America. The chief designer told me recently his department lost 8 specialists. People work for 3-4 years, gain experience and then leave.
- How much should the salary be for young specialists to stay?
- Minimum 8000 hryvnias monthly. But there is another problem - land for construction of housing. Back then I could not get a piece of land in Kyiv and we had to build houses in Gostomel. Fortunately, now the Kyiv authorities allot land for us. We have registered one lot already and will start building soon.
- Yes, the land. Your enterprise has huge for Kyiv territory. Do some dishonest people try to take a piece of it?
- Regularly! And middle chain authorities assist them with it. For example, they have built garages on our territory without any permission. Now they are trying to cut a piece of land. We are fighting, of course - we've fenced the territory, but the land under those garages used to be ours as well.
Under previous governing body, when there was "Aviant" plant a big part of the territory was lost. "Aviant" used to have a huge territory, but then it was governed by a manager from a glass works. As a result, the enterprises was cleaned out, living more than two billion hryvnias of debts. Materials and equipment were taken away, workshops were rented, and planes were replaced with trucks.
However, despite the pressure we managed to solve the situation. "Aviant" was integrated into "Antonov". We took more personnel and started the production.
- "Antonov" enterprise is engaged into cargo transportations. How profitable is this activity?
- This activity is profitable enough for other people wishing to take our planes and do it themselves. However, these people do not understand that cargo planes are not new, but 20 years old. Such planes require continuous repair to keep them working, and it costs pretty money. Fortunately, our material and scientific base allow us to do maintenance. Cargo transportation is a specific business.
- What is the fate of the biggest plane in the world - An-225 "Mria"?
- We have a single copy of this plane in Ukraine. The second plane has not been finished yet. There is only the airframe. Hopefulle, we will complete the construction soon and sell it. We have potential customers.
- I cannot tell you now. The negotiations are in progress. When we sign the contract, we will announce the buyer.
- And the functioning "Mria"? Is it in demand?
- From the economic point of view this is very specific aircraft. It was designed for superheavy cargos. This is our "house specialty". Whenever An-225 goes, it draws attention.
- China is known for its fast developing and wide-range production. There are Chinese cars, motorbikes, even tractors. Why don't we fly in Chinese planes?
- Indeed, China has succeeded in many industries, but the aircraft production is still a new area for it. The first project - ARJ-21 plane - was not much of a success, though we helped them with calculations. China does not have enough experience to come to the big market.
China once copied our An-24. It was an old plane with out-of-date aerodynamics. They installed Canadian helicopter engines and replaced navigation equipment, but the airframe and gears are ours. First they called it Yun-7, now it is MA-60, but it fact it is good old An-24.
- Have you appealed to court?
- No, we prefer to cooperate with China. Besides, the planes were designed back in Soviet times and the chance to win is not very high. We had similar lawsuits in the past. Poland, for example, assembles An-28 without license. We appealed to court and won the case, but they said the contract on production was concluded with USSR, and USSR's heir is Russia, which does not have any claims.
- There was a story on TV about the passenger plane of the future, being developed by "Boeing" - blended wing body without windows. What are the planes of the future, in your opinion?
- I've seen the latest project of "Boeing" - Boeing-787 Dreamliner. On the contrary, it has bigger windows than usually - everything to make passengers feel more comfortable. Who will fly in a plane 'without doors and windows'? Besides, the practice shows that triangular wings are not very reliable. Remember what happened to supersonic Tu-144 and Concord. After a series of crashes the flights were banned. Both those models had triangular wings. I believe the future belongs to the classic planes, safer, more economically advantageous and comfortable though.
Dmytro Khyliuk, photos by Maxim Trebukhov
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