by Richard Pettibone, Aerospace & Defense Companies Analyst, Forecast International.
Under the aegis of Ukraine’s state-owned defense conglomerate Ukroboronprom, Antonov is rapidly becoming the focal point of the country’s aviation industry.
The new ownership has not been idle with its acquisition. In June 2016, Ukroboronprom consolidated its aerospace holdings into a new Ukrainian Aircraft Corp centered on Antonov. This new group is aimed at helping the nation’s aviation industry to develop and to integrate into the global market. Further, the cluster will also help reduce redundancy in production, planning, procurement and marketing among its various operations. Perhaps most importantly, the formation of this corporation will help Ukraine sever ties with Russia’s United Aircraft Corp.
Contrary to press reports in early 2016, Antonov was not liquidated. The company clarified the situation in a press release as follows: “The Government of Ukraine took decision on liquidation of the Antonov State CONCERN. The CONCERN consisted of three enterprises: Antonov State COMPANY, Kharkiv State Aircraft Manufacturing Company (KSAMC) and State enterprise Plant 410 of Civil Aviation. In 2015, aiming to increase efficiency of the aircraft industry, the Government of Ukraine took decision to pass Antonov State COMPANY, KSAMC and State enterprise Plant 410 of Civil Aviation (i.e., all three enterprises of Antonov CONCERN) under management of UKROBORONPROM State Concern.” Put simply, Antonov continues to perform the work that it always has, only now with more support from Ukraine’s entire aeronautic industry.
As would be expected, Antonov has not been spared the effects of the current political chaos between Ukraine and Russian-supported separatists. The impact of this conflict on the firm was immediate – plans to restart joint production of the Antonov An-124 transport aircraft and to continue development of the An-70 platform were derailed. In addition, Antonov’s supply chain stretched across the troubled Russian border, a factor that continues to hinder the airframer’s progress. Further, plans with Russia’s UAC for marketing and after-sales support for a range of Antonov aircraft have also been put on hold as the conflict wears on.
Overall, the firm’s programs face a difficult outlook, as Russian customers usually account for the bulk of any Antonov orders. Export customers will not buy an aircraft from the firm unless it is in service in large numbers in either Ukraine or Russia. With the current conflict only getting worse, production lines have slowed.
Despite the turmoil, Antonov is attempting to continue operations with as much normalcy as possible. The company is moving ahead on its programs, such as development of the An-178 freighter prototype, which made its first flight in 2015. Azerbaijan’s Silk Way Airlines ordered 10 aircraft soon after.
One recent bright spot for the firm has been its partnership with Saudi Arabia. Here the company has partnered with local firm Taqnia Aeronautics Co to develop and manufacture the An-32 light cargo plane in Saudi Arabia. The agreement will see a technology transfer to the kingdom and training by Ukrainian experts. This initial effort was later expanded when Saudi Arabia tentatively signed an agreement for 30 Antonov An-178 tactical transports. If all goes well, these aircraft could eventually be produced by the Saudis as well. Programs such as this, if successful, could lead to additional coproduction opportunities for Antonov with other countries – something management is fervently hoping for as it seeks to revitalize this long-storied aviation firm.
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