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Demand for business aviation is growing in Russia
Demand for business aviation is growing in Russia

Russia is fertile ground for development of business aviation. The growth of the sector in the country in the past few years has been spectacular as an increasingly wealthy population discovers the joys of private flying. The business is now well past the $ 2 billion a year mark, annual fleet growth is estimated at 35%, and the market is now thought to be second only to the USA in size.

Around 350 business jets are owned by Russians, an increase of 70-100 aircraft in just over a year. This growth is all the more remarkable, considering the continuing failure of the Russian government to provide a more favourable environment for development of business aviation. The growth in the business is exemplified by the figures for departures at the three Moscow airports. The main hub for business aviation is Moscow´s Vnukovo, with its dedicated business terminal 3.

Manufacturers are similarly optimistic about Russia. Bombardier is the overall market leader in Russia and the CIS with a 40% market share. The company has enjoyed particularly strong demand for its larger business jets. The firm is the market leader in the large and ultra-long-range aircraft sector in Russia and the CIS.

Dassault intends to use the new Jet Aviation facility at Vnukovo 3 and has a team of engineers based in the Moscow region for the Dassault Falcon family, who are able to travel to local airports as needed.

Cessna sold 20 aircraft across the CIS in 2007, mainly to Kazakhstan, Russia and Ukraine. The US manufacturer expects to sell 10-15 Citationjets in Russia in 2008.

The Russian market is also energising Hawker Beechcraft. "The market has become one of our top three outside the USA," says Sean McGeough, Hawker Beechcraft vice-president, international sales. "Our Hawker series business jets have been extremely successful and well received. We have also sold the Beechcraft Premier IA to Russian clients. We also have strong interest in special-mission King Air sales, along with our commercial King Air business. There is expected to be a change in tax legislation that should lower the cost of aircraft ownership and spur additional demand. We are very excited about the growth in this market," he says.

Perhaps the boldest step taken by any manufacturer was Eclipse Aviation´s decision to set up production of the Eclipse 500 very light jet in Russia, at the Aerostar factory in Ulyanovsk. European Technology and Investment Research Centre (Etirc), Eclipse´s majority shareholder, says it sees "a market of well over 1,000 aircraft in the coming years", mostly from air taxi operators, rather than individuals.

There is little sign of Russian competition for Western manufacturers, although Ilyushin Finance has announced plans to produce a business-aircraft variant of Antonov´s An-148 regional airliner as the Antonov Business Jet in 19- and 38-seat variants. Sukhoi plans a business variant of its Superjet 100 regional airliner, likely to be a few years away from production.

The Russian government has promised to gradually abolish import duties, and temporarily cut them last year from 20% to 10% for a nine-month period (later extended), for aircraft under 19 seats with a 15-20t maximum take-off weight, criteria that caused some to question its motives.

Vnukovo has its dedicated business terminal, but scheduled airlines get priority for runway use, to the detriment of business users. And the situation is exacerbated by the fact that the government air service also uses Vnukovo, and has priority access. Vnukovo plans to open its second runway in 2010 for business departures only.

Operators are already looking at other options to get round the constraints of the existing airports, including possibly expanding operations from Moscow´s Bykovo airport and using GazpromAvia´s dedicated facility at Ostafyevo, near Moscow, which the company airline intends to offer to other users in the near future.

The lack of maintenance facilities for foreign aircraft is another area that demands attention, and where there are signs of progress. "The lack of maintenance facilities is a big issue," NetJets´ Pasetchnik says. Jet Aviation is now establishing the first maintenance centre in Russia for foreign-made business aircraft at Vnukovo, including a dedicated maintenance hangar to open by the end of this year.

Jet Aviation is in the process of receiving further international aviation authority approvals to provide services for Dassault Falcon, Cessna, Embraer and Hawker jets, and later to offer avionics and engine support.

The pace of change in Russia and the expectation of further demand once the legislative situation improves means investors and developers are waiting in the wings with new projects. This includes infrastructure in Moscow region and elsewhere, and new air services. In just a few years, the fertility of Russian business aviation might be even more impressive than it is today.

According to Flightglobal.com

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