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Talking About Helicopters And Engines With The Prime Minister

Russiaaims to become one of the world leaders in the helicopter and engine industry by 2020, and secure the competitiveness of our high-tech products on the world markets for the next 40-50 years. This is the ambitious objective set byAndrey Reus, head of OBORONPROM Corporation. He spoke to Rossiyskaya Gazeta following the conclusion of the MAKS-2011 international aerospace exhibition in Zhukovskiy, Moscow Region, about how all these goals will be achieved.

Rossiyskaya Gazeta: Mr Reus, what did you talk with Prime Minister Vladimir Putin about when he toured the OBORONPROM booth?

Andrey Reus: First of all, I briefly outlined the corporation's key operational indicators. In 2010 earnings were in excess of 181 billion roubles. The figure is expected to rise to R220 billion in 2011, with a forecast for 2015 of R500 billion. Oboronprom's holding companies have already signed or will sign before the end of this year "firm" contracts - in areas including government defense procurement - worth $21 billion. This is essentially the equivalent of three years' worth of our earnings. Our R&D spending is now in excess of R15 billion.

With such indicators and technological foundations, we have a bright outlook. I also called the prime minister’s attention to the fact that the number of people whose livelihood depends on our corporation – including our own employees, members of their families, the employees of our subcontractors and people working in the service infrastructure attached to our plants - is over 2 million. Corporate payments of taxes of various levels are more than R16 billion a year.

RG: The corporation displayed at the MAKS quite a few new products, which you showed to the prime minister personally. To what did you draw his attention primarily?

Reus: During a similar meeting with the prime minister at MAKS-2009 I promised him that within two years we will have launched new helicopters. This year we showed for the first time the Mi-34S1 light helicopter intended as a trainer model for commercial and military pilots. We plan to launch mass production in 2012. Another new product demonstrated at the MAKS-2011 air show was the Ka-226T light helicopter with a medical module. The helicopter is equipped with two Arrius 2G gas-turbine engines supplied by France's Turbomeca.

In addition, we displayed the transport and passenger Mi-38 model in two experimental versions: the OP-1, fitted with the Russian TV7-117V engines, and the OP-2 fitted with Pratt & Whitney engines. The certification of the Mi-38 is planned for 2014.

We also demonstrated a new experimental Mi-26T2 heavy transport, which is currently undergoing flight tests. The helicopter is equipped with a new avionics package, a glass cockpit, a new digital autopilot, and a new navigation system with Navstar/Glonass support.

RG: Did you sign any helicopter contracts at the MAKS?

Reus: Yes, we signed, in the presence of the prime minister, agreements for the delivery of 40 Mi-8/17 helicopters to the UTair airline and 39 helicopters of this same class to the GazpromAvia airline. These are our traditional clients. In 2010 we completed deliveries on a UTair contract for 40 Mi-8 helicopters. We plan to deliver a total of 262 aircraft to our customers in 2011.

Our program with the Defense Ministry is also making good progress. We already have firm orders for 450 aircraft. As a whole, the MoD is planning to purchase more than 1,000 helicopters of various classes by 2020.

We have also signed an agreement for the Mi-38 project with Vneshekonombank. Our first joint project - the Ka-226T - is, as you know, already being financed by that bank.

RG: What projects will determine the future of another holding company of yours - the United Engine Corporation (UEC)?

Reus: I showed the prime minister at the OBORONPROM booth a mock-up of the engine for the MS-21 aircraft - the PD-14. The engine is being built in the strongest cooperative effort of all our subsidiaries and design bureaus. The core engine has already been designed and assembled; it is now undergoing trials. Trials of the technology-demonstrator engine are scheduled for March 2012, and certification of the PD-14 base engine for 2015. This engine can be installed, aside from the MS-21, on the SSJ-130NG airliners and MTA transport planes. It can also be used as a replacement engine for the existing fleet of the Il-76, Tu-204, and Il-96-400 aircraft.

Another UEC project - the SaM146 engine for the SSJ100 - has already gone into mass production. We plan to make 150 units every year. For the expanding family of the SSJ100 airplanes we are now working on a new modification of the SaM146 engine with 5 per cent higher thrust. We are also looking into the possibility of using the SaM146 on other types of aircraft.

As a whole, as I told Mr. Putin, UEC is prepared to supply engines to the United Aircraft Corporation in every single segment of commercial and military aircraft. This is no longer something extraordinary for us. We have quite a large amount of process stock in pilot-project engineering and design. And when the question arose of whether we can make an engine for the T-50 second-stage future fighter, we had a simple answer: "Yes, we can. We are up for any challenge!"

RG: But I thought the plan was to install a Pratt & Whitney engine on the MS-21. Why is a Russian engine needed as well?

Reus: Installing two different engines on one aircraft model is normal practice. This incentivizes both us and our American partners to deliver a better product.

RG: Was the missile engine industry mentioned?

Reus: Yes, we demonstrated the RD-107A and NK-33 engines for space-launch vehicles at the OBORONPROM booth. After the windup of the Soviet Lunar program a batch of the NK-33 was, in breach of an order from Moscow to destroy them, hidden by Academician Kuznetsov. That is a unique engine! After almost 40 years it still meets all space exploration requirements. We have modified it, of course, having upgraded almost 30 components. This year it will be used to power a Soyuz-2-1c light booster. Now that the American Shuttle program has ended, the NK-33 remains the only engine in the world that can launch heavy vehicles into space.

RG: Judging by your plans, the industry has already emerged from the crisis, and you intend to match your strength against the world leaders in earnest. What do you have up your sleeve?

Reus: One element of our strategy, for example, is the formation of specialized technological competence centers. Our plants have traditionally had a full production cycle - from nuts and bolts to the finished product. These days such a model only impedes our progress, and we have no choice but to form efficient centers catering to the requirements of not just one individual plant but of the entire holding company. These centers can also work for third-party customers, since we are counting on them operating more efficiently than their competitors.

Within five years aluminum and titanium casting will be concentrated in Ufa, magnesium alloys casting in Perm, and instrument equipment in Rybinsk. We are now trying to decide where to set up our centers for the manufacture of core engines, blades, and combustion chambers.

We will develop new engineering expertise. Unmanned aerial vehicles is one such area. I told the prime minister about our plans for launching assembly of UAVs  here in Russia using the technology of the Israeli IAI concern. This is a very interesting and promising market, in my view. In several years' time we will be selling not individual items but entire systems, entire tactical units. The shop floor in Yekaterinburg has already been prepared, we are now training staff.

And, of course, the development of new equipment. This is important not only for us to remain competitive, but also for the training of designers and engineers. I am convinced that a highly professional designer can be trained only in the process of work on the development of new models. In the engine industry this is, like I say, the PD-14 project, in helicopter industry the future high-speed helicopter. The high-speed helicopter project is currently being developed by two design bureaus - Mil and Kamov. Both are receiving exactly the same funding, lest there be jealousy among the designers, so to speak. We aim to arrive at a single solution for this project by mid-2012.

RG: You spoke at the MAKS-2011 about the formation of new divisions in the structure of UEC. What is the goal you are pursuing?

Reus: We are forming separate divisions with a view to better work with our customers. I have signed orders on the formation of two new structural units of UEC - a tactical aviation engines division and a helicopter engines division

These are among the key areas in UEC development strategy. For example, we have essentially restored our expertise in the manufacture of helicopter engines in Russia. With the financial support of Vneshekonombank we have launched construction of the Petersburgskiye Motory complex, which will make up to 450 engines a year. A 10-year contract between UEC and Russian Helicopters for the delivery of engine units for our helicopters has already been signed. But this, naturally, in no way negates our cooperation with Motor Sich, Pratt & Whitney, and Turbomeca. Our project harmoniously complements it.

We set up a power-engineering division in March. UEC now has a very busy program for deliveries of gas-turbine units to Gazprom and oil companies. We have seen very substantial growth - 25-30 per cent a year - in this segment. I am confident that this trend will continue through compact power generators, which are in great demand in the provinces, given the growing energy prices. Yaroslavl and Sverdlovsk Oblasts, as well as Bashkortostan, have a program to install units that simultaneously generate power and heat at the local central heating stations.

RG: The corporation has far-reaching plans. What is the planned timeframe here?

Reus: Thanks to our energetic efforts Russia is firmly established among the three world leaders in the helicopter industry. And the main task here is always to continue to improve. In the engine industry the situation is more complicated: the burden of problems in financial, production, and personnel policy that have built up over the past 20 years is weighing down on us. Resolving these issues will require intensive, painstaking, and literally daily effort.

I personally am setting myself the task of getting all this done by my 55th birthday, which will be in four years' time.

Rossijskaya gazeta