Eye on Russia: The Road to Success

RUSSIA’S IMMENSE DEMAND FOR light helicopters nearly has become common knowledge. However, as years pass, two Russian manufacturers of new-design, light rotorcraft are still struggling to find domestic customers for their products.

Commercial operators prefer paying the higher operational costs of running their Mil Mi-8s for missions normally carried out by lighter aircraft to going to the trouble of "taming" immature helicopters not yet in serial production. Private owners clearly opt for more "prestigious" Western-built helicopters, with Robinson Helicopter R44s leading the market and interest in Eurocopter EC135s reported to be growing. Government entities don’t seem to have the budgets to replace their fleets. It is no wonder Kazan Helicopters and Kamov stay afloat almost entirely due to customers in Asia and the Middle East, regions traditionally receptive to Russian equipment.

Production of Russian light helicopters is somewhat livelier than a few years ago, if producing about six machines a year may be considered "lively." A number of obstacles continue to impede the market. A few of them are, according to Kazan Helicopters Marketing Director Valeriy Pashko, limited airframe and component production capabilities, certification hurdles, and customers that are scared away by maintenance problems. The manufacturer’s first design, the 10-seat, twin Pratt & Whitney Canada PW206-powered Ansat, originated from an assumption made over a decade ago that hundreds of aging turbine Mil Mi-2s and piston-engine Kamov Ka-26s flown in Russia would need to be replaced. The time for their replacement has come and gone without the expected consequences.

The number of light rotorcraft operated in Russia today is less than 17 percent of all helicopters. Still, quoting industry experts who say the need for light helicopters is "huge," Ansat’s backers are convinced their forecasts are true and potential domestic demand much exceeds their production capabilities.

Instead of replacing their retiring predecessors in Russian operators’ fleets, individually produced Ansats find customers in South Korea and two more countries Pashko refused to disclose. (Those two could be in traditional Mil markets in the Middle East, North Africa, or Latin America.) Kazan delivered four Ansats in 2006, and expects to deliver six this year.

Asked if the company strives for a truly serial production, Pashko didn’t offer the anticipated decisive "Yes." It is no surprise, then, that Kazan is in no hurry to certify Ansat to European Aviation Safety Agency (EASA) or U.S. FAA standards. The basic variant was certified by Russia’s Interstate Aviation Committee in 2004, and acquiring supplementary certificates (including those for passenger and IFR operations) has been a non-stop process. Customers keep asking for individual modifications, which need to be approved separately.

Kazan’s competitor, Kamov, seems somewhat better off, as state-owned gas giant Gazprom sticks to its commitment for 22 twin-engine, coaxial Ka-226s. The first four were delivered in 2006, and seven more are expected this year. Again, the outlook is brighter on the export side. Kamov recently signed a contract to deliver six Ka-226s to the Jordanian government. The same deal establishes a joint venture for manufacturing helicopter cabins for different missions, which implies a potential market.

The Moscow city administration and the Russian federal security service aren’t as active in trying the new type. The former planned to use the 7-9-seat machines for air-taxi services, which so far has not proven feasible. It purchased two Ka-226s for law-enforcement missions. A like number went to the federal security service for border patrol. Kamov’s sales person, Vladimir Novoseltsev, said the government is the biggest potential customer for the aircraft, so state support is logical and necessary to help the manufacturer upgrade its production sites and establish a network of maintenance facilities, a prerequisite for entrance in today’s market.

Ansat has not had much luck with government orders. In 2001, it won a tender for trainer replacements for the Russian air force. It expected an order for 100; it got an order for two.

As if to compensate for lack of funding, the state gives much attention to the organizational structure of the helicopter industry. Last year, the government issued a mandate to establish Oboronprom Corp. The purpose of the state-controlled holding company is to put an end to internal competition by consolidating the Mil and Kamov design bureaus with major rotorcraft production plants in Kazan, Ulan-Ude, and Rostov.

Real serial production is the only road to the domestic and international market for light Russian rotorcraft. That the Ansat and Ka-226 programs are still alive and beginning to win over skeptics is due partly to the order boom in the global helicopter arena. Western manufacturers’ backlogs have been keeping them busy and this explains why they haven’t put much effort into winning the Russian marketplace. With a bit more luck with customers and money from the state, domestic manufacturers may get their piece of the "huge light helicopter market."