Russia plans to collaborate with China in designing a wide-body aircraft that would compete with Airbus and Boeing. The Russian government intends to reach an agreement with its Chinese counterpart by the end of this year, according to a report from Bloomberg.
Andrey Boginsky, Director for the Aviation Industry Department, Ministry of Industry and Trade of Russia, said the government is prepared to finance the initial stage of the project, which would focus on the design of a new twin-aisle plane.
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Boginsky added that Russia would later expand its partnership with China to include the development of an aircraft engine. According to him, Russia’s United Aircraft Corp (UAC) and China’s Commercial Aircraft Corp (Comac) are discussing a work plan and their obligations. Both companies are seeking to strengthen a memorandum of understanding (MoU) signed in May 2014.
Global airlines need around 8,830 wide-body jets over the next 20 years
Oleg Panteleyev, head of research at Aviaport.ru, commented that Russia’s plan to design a feasible wide-body aircraft needs an investment of as much as $20 billion. Boeing estimated that global airlines would need approximately 8,830 wide-body aircraft over the next 20 years. The American aircraft designer and manufacturer also projected that China alone would need 1,500 wide-body aircraft over the next two decades.
Boeing and Airbus have a duopoly on manufacturing twin-aisle aircraft. Both companies have competitors in developing and producing narrow-body planes.
Russia, China to compete separately with Boeing, Airbus
In an emailed statement to Bloomberg, Sergey Loktinov, a spokesman for United Aircraft, said the state-controlled company intends to gain market share beyond Russia and China.
Russia and China intend to compete separately with Boeing and Airbus in the 100-seat-plus jetliner market, the biggest segment of the aviation industry, according to the Bloomberg report. United Aircraft is developing the MC-21, which is expected to fly for the first time next year. Comac is developing the C919, which is expected to fly this year.
Additionally, both countries are planning to sell the Russian Sujhoi Superjet 100 regional plane in Asian markets. In May, Russia and China signed a framework agreement to create a leasing company.
Russia and China trade declines 29% this year
Russian President Vladimir Putin is strengthening his country’s relations with China as a counterbalance to the influence of the United States and Europe. Moscow’s ties with the U.S. and Europe have soured due to the Ukraine crisis.
Market observers suggested that Putin has a new problem to face—the plunging economic growth of China. The stock market rout in China added pressure to the ruble, which dropped to its lowest levels in months. Russia is moving towards a deeper recession because of concerns regarding China’s economy, which negatively impacted oil prices—Moscow’s primary export.
The trade between the countries dropped 29% to $30.6 billion in the first half of this year because of the declining prices of oil and commodity products and China’s economic slowdown. Officials from the Russian government indicated that it is unlikely for them to achieve their target trade turnover of $100 billion this year.
Alexander Gabuyev, head of the Russia in Asia Pacific Region program at the Moscow Carnegie Center, commented, “The level of Russian rhetoric about Russia-Chinese relations and the reality are quite separate things. Russia is the supplicant partner, not China, which still has a range of choices to source resources even despite its recent economic troubles.”