Sanctions Impact Russia’s Irkut; MC‑21 Soldiers On

by Richard Pettibone, Forecast International

With Russia continuing its aggression in Ukraine, the world has responded with sanctions. As a result, the country’s aviation industry has been stymied in its efforts to grow beyond its usual customer base.

As these sanctions and counter sanctions continue, the opportunity to gain sales with Western operators has dimmed considerably. For an industry that was just beginning to emerge from the post-Soviet doldrums, this is an unwelcome development to say the least.

Before these developments, Irkut led the reformation of Russia’s aerospace realignment efforts. The firm pursued a more Western consolidation strategy. It started at the bottom, where the most expensive overcapacity is, rather than from the top. This proved successful, and Irkut was one of the first aviation firms in Russia to become somewhat privatized.

However, with the country’s market woes not limited to one company, a more comprehensive effort was needed. To this end, Russia consolidated a majority of its aircraft producers under one roof, United Aircraft Corp. The firm is an amalgamation of such storied aviation marquees as Sukhoi, Tupolev, MiG, and Ilyushin, and is gradually emerging from a restructuring aimed at making it a bit more competitive with its Western compatriots.

Now, the primary commercial program at UAC is the Sukhoi Superjet 100, a regional jet that is expected to be a credible contender in a market dominated by Embraer and Bombardier Aerospace.

The next big commercial project for Russian industry – and the one that primarily involves Irkut – is the MC‑21. In mid-2010, a Malaysian investment firm became the program’s launch customer with a $3 billion order for 50 aircraft. As of early 2014, it had orders and options for 276 MC-21s. Though this is still a risky program, the Russian government continues to back the effort.

Initial flight of the MC-21 was planned for 2014; this has since slipped to 2015. As is the case with these types of development programs, further delays are likely, even if the manufacturers stick to their rosy forecasts.

At present, Irkut expects Russian certification in late 2016, followed by service entry in 2017. European Aviation Safety Agency (EASA) certification is planned for 2017. Total program cost of the MC-21 effort is estimated at RUB190 billion ($6.5 billion).

One fly in this ointment is whether sanctions will impact delivery of the Pratt & Whitney PW1400G engines that power the aircraft. Usually it is defense-oriented products that are hardest it, though if the situation escalates, the possibility of more severe sanctions remains. The problem with such a ramp-up is that it impacts not only Russian firms but also Western manufacturers – something politicians are loathe to do in these mercurial economic times.

Despite the political issues, the MC-21 program continues to make progress. However, it will face stiff competition both abroad and at home. The plane will compete directly with the Boeing 737 and Airbus A320, and will have difficulty achieving large-scale penetration of Western markets. Even within Russia, the Airbus and Boeing narrowbodies will provide robust competition to the MC-21. Nevertheless, national pride will likely ensure a slice of the market to Irkut in the years ahead.

About Forecast International

For 50 years, Forecast International intelligence reports have been the aerospace and defense industry standard for accurate research, analysis, and projections. Our experienced analysts compile, evaluate, and present accurate data for decision makers. FI's market research reports offer concise analysis of individual programs and identify market opportunities. Each report includes a program overview, detailed statistics, recent developments and a competitive analysis, culminating in production forecasts spanning 10 or 15 years. Let our market intelligence reports be a key part of reducing uncertainties and mastering your specific market and its growth potential. Find out more at

View all posts by Forecast International →