September 09, 2016, ©. Leeham Co: The Western world civil aeronautical industry developed a number of new aircraft (Boeing 787, Airbus A350, Bombardier CSeries, Mitsubishi’s MRJ) or aircraft variants (A320neo, 737 MAX, A330neo, Embraer’s E-Jet E2) during the last 15 years. The last of these projects (A330neo) is entering flight tests within six months.
Over the next 10 years there will be few new Western hemisphere aircraft projects. But there will be action in the east, in Russia and China. We therefore will cover these projects in more and more articles.
To give a background to these articles, I will spend some Corners to describe some of the differences between the Western and Eastern aeronautical industry. A lot of these differences will come from the industry’s history. We will start with Russia’s airframe industry.
Soviet Union airframe development and production
The development of a new aircraft in the Soviet Union was not done by one company but by a number of organizations that did their specific part. We know Soviet civil airliners under their design bureaus names (Tupolev, Ilyushin, Antonov, Yakovlev…). But the design bureaus did only a part of the design work and then not much more of the job to bring an aircraft to the market.
The different Soviet state agencies for air transportation were responsible for defining the market demand and allocate budgets for the development and production of the needed aircraft. They then issued requests for proposals to the design bureaus that were deemed suitable for the needed aircraft.
The selection process who would be awarded a new aircraft project was highly political, reminiscent of how military aircraft projects get awarded the world over. It required that the design bureau had a strong lobby arm in Moscow. It could also be so that certain sought after aircraft projects were awarded to, e.g. Antonov as their bureau was placed in Kiev and Soviet leader Khrushchev had Ukrainian affiliations.
The design bureau was responsible to try and lobby for the right projects and then to respond with an aircraft concept. The State agency would decide which bureau of several got the job to develop the aircraft based on who had made the best proposal (or had the most political clout).
The power of state research organizations
It shall be noted that the design bureaus did not have the complete competence to put together a proposal for an aircraft. Aerodynamic and structural competence was to a large part concentrated in the gigantic Central Aerohydrodynamic Institute “TsAGI” (today, 18,000 people), which advised the design bureaus which configurations were suitable for what task and developed the appropriate aerodynamic design including testing it in one of their 60 wind tunnels or other test facilities during development of the project.
TsAGI for a long time favored airliner designs with wings clean from engines. Therefore, there were no Soviet Union civil airliners in the early years with engines mounted in pods on the aircraft’s wings. The Soviet airliners were all with engines mounted at the back of the fuselage. It took until the mid-1960s and the Il-86 before this firm idea of TsAGI could be modified and they accepted that design bureaus proposed designs with wing mounted engines in pods.
When a design bureau had completed a design for an aircraft, the state decided which manufacturing plant should produce the aircraft. The bureau then transferred the design (drawing package etc.) to the chosen plant. Production adaptation of the aircraft was the responsibility of the manufacturing plant.
For production, the state once again decided which airline should get what number of aircraft and from which plant. After sales, support with spare parts was the responsibility of the manufacturing company but only based on orders from the state.
This splitting of design and production authority created many unclear intellectual rights situations. An example is the AN-148. The design was started during the Soviet times by the Ukrainian based Antonov design bureau in Kiev. Production rights were eventually given to the VASO plant in Voronezh Russia which produced the aircraft for the Russian market in addition to Antonov’s own production for local needs.
When Russia and Ukraine fell out with each other the VASO produced AN-148 suddenly was an aircraft without a design authority supporting or further developing it. The aircraft produced by VASO had no future and no airline wanted to operate such an aircraft. The main production of the aircraft, the one by VASO will now stop.
Maintenance of the aircraft that were produced was done by special maintenance factories, once again on orders from the state.
The fall of the Soviet Union and the state coordination
During the Soviet era (pre-1990), an industry that had learned to function in the Soviet way was producing more than 700 civil airliners per year. The Soviet system produced more than 20 different airliners, post-World War II, whereof half were jets. Around 3,700 jet airliners were produced from the designs from bureaus like Tupolev, Ilyushin and Yakovlev, produced by a large number of manufacturing organizations.
When the Soviet system collapsed around 1990, an aeronautical industry that was structured to function in this environment ground to a halt, Figure 2. In 2000, only four aircraft were produced.
When the State functions of control (orange blocks) were no longer present, the horizontally structured Soviet era industry could no longer function. No one had total responsibility in front of the customer for sales, control, prioritization of what to do or for after sales support. It was all divided on different organizations which no longer had functioning engagement rules for their cooperation.
This shall be compared to the market driven model on the right. Western aircraft OEMs had all functions (outside long range research) inside the company. The sales/marketing function did market research to establish market segments with non fulfilled aircraft demand. The companies management then started a concept project that proposed an aircraft to fulfill the demand together with its commercial business plan.
If the business plan was sufficiently positive the concept project could transfer to a real project with an authority to offer. Customers, who had confidence in the company based their existing products and support, could place orders.
The OEM was responsible for all phases of the aircraft’s life cycle, including contracting and certifying Maintenance and Repair Organizations (MROs) that maintained the aircraft in a correct way. This cycle of confidence was built up from the start of the OEM’s life and it remained over time. The operators learned to trust that the company would be around also for the 20 years of operation of the aircraft. If the aircraft projects were successful there would be support/further development even if the original company was bought or merged into a larger organization. Fate of an aircraft project was based on demand, not political winds or wranglings.
In the end, if something did not work for an operator of the aircraft, there was one person to call, the OEM’s CEO. The CEO then had the power and the means to get balls rolling to fix anything that did not work for the customer.
This was in stark contrast to the collapsed Soviet model. Who to call? In the old days you called the state agency, in the end the minister. Now whom?
To raise from the ashes
When the state no longer coordinated the whole apparatus and allocated money to suit, the different horizontal organizations had to fight for their existence. They had to try and sell their services or products to a market they did not know or had any established contacts or track record with.
They were not trained in establishing market demand and with which specification and economical concept to fulfill this demand. And they did not have the time, money or skills for market oriented work and time was running out. Each month salaries should be paid to huge numbers of employees but there was no money coming in.
The manufacturing companies were the only organizations that had products to sell but no functioning sales and support organizations nor any well functioning customer relations.
Some manufacturing companies managed to rally together half functional sales and support functions and sell a couple of aircraft projects on the world market. Others were less capable; they had to rely on the Russian state to feed them and the state had no money.
Aircraft projects which had entry into service in this period failed, only selling a handful of aircraft. Examples are Tu-204/Tu-214, the same aircraft marketed by two different aircraft manufacturers; Il-96, the long range wide-body; the mentioned AN-148 and IL-114, the regional turboprop.
During 2000 to 2010, the Russian federation leadership realized something had to be done and they started the transition of the Soviet model industry into a Western style structure. United Aircraft Corporation (UAC) was created and consolidated 30 different organizations with 100,000 employees into an aircraft OEM with full responsibility for design, sales, production and after sales support of its products.
The industry and state started the long way back by creating new projects which were from the outset conceived for a market economy. First was the regional SSJ100 project, which was allocated to one of the organizations which had fared reasonably well during the slump, the Sukhoi design bureau and its affiliated Komsomolsk-On-Amur manufacturing plant. This constellation had managed to sell and manufacture Su-27 fighters for export during the slump so many company functions were intact.
Another organization that had fared better than others were the manufacturing company Irkut. It had sold and manufactured a Su-27 derived design, the Su-30 fighter on export. They could therefore take up the Yakovlev design bureau’s YAK-242 project for a single aisle airliner and developed that as the MC-21 project with state support. In the process Irkut integrated the Yakovlev design bureau into the manufacturing company.
The next project which will be started is a joint Russian-Chinese wide-body project, now with Ilyushin as lead for the design competence. Manufacturing will be spread between China and Russia with China having final assembly.