August 22, 2013: The Russian Air Force has ordered 15 An-148 commercial transports. The An-148 is a twin jet commercial transport that normally carries up to 80 passengers or nine tons of cargo. Max range is 2,100 kilometers and the high-wing design means that the stretched An-178 cargo version can carry up to 15 tons and have a rear door for quickly loading and unloading. The An-148 is costing the air force about $39 million each and all will be delivered by 2017. The air force does have a need for An-148s, but the government has an even greater need in keeping the Russian commercial aircraft manufacturers in business. That’s the main reason behind this purchase.

Antonov introduced the An-148 as a competitor for the American Boeing 737. Although Antonov soon had orders for over 200 of the new aircraft, the first operators reported that the An-148 was more expensive to operate than a comparable 737 (in service since the 1960s with over 6,000 built). Sensing that competing with the 737 (which costs more than 50 percent more) on price alone might not work, Antonov announced a military version of the An-148, the An-178. This would be a cargo aircraft, with a max payload of 15 tons. But that segment of the market is already being served by aircraft like the Western AN-295 and C-27J. The basic problem here is that once mighty Soviet civil aviation industry has been shriveling away since 1991, and has few viable opportunities to make a comeback.

The disintegration of the Soviet Union not only destroyed centuries of Russian empire building but tore apart the Russian civil aviation industry. For decades Soviet commercial aircraft manufacturers had guaranteed customers for their second-rate (compared to Western models) aircraft. Russian and East European airlines had to buy the Russian models, and many poor countries that could not afford Western aircraft accepted the Russian planes as better than nothing. After 1991, the Soviet Union was replaced by a much reduced Russia and 14 new nations that had been part of the old empire. No one was forced to buy second-best aircraft anymore. The dissolution deal had whatever Soviet assets were in the new nation belonging to it. Most of the civil aircraft manufacturing facilities were outside of Russia (in Ukraine and Uzbekistan). Of the three major aircraft manufacturing firms, Antonov was headquartered in Ukraine, Ilyushin in Uzbekistan, and only Tupolev in Russia. Russia has managed to persuade (via cash and help with sales) Ilyushin to move a lot of manufacturing back to Russia. Tupolev is being merged with several military aircraft manufacturers, as part of the United Aircraft Corporation. Antonov may be forced to reconnect with Mother Russia as well, given their inability to design and manufacture aircraft that can compete with AirBus and Boeing (not to mention many smaller Western firms).

New Russian commercial aircraft designs keep coming up short compared to what the West is offering. It’s not just Boeing and AirBus, but also smaller manufacturers in Europe and the Americas. Even China is entering the commercial aircraft market and is poised to beat the Russian efforts as well. But the Russian government is still determined to pay the price of staying in the market. As long as the subsidies, in the form of cash and government purchases, keep coming, the Russian firms will keep trying.