mr ferguson and welcome to the show. this is your second time with spotlight and i'd like to start with an issue that didn't get a mention last time the united aircraft corporation doesn't only produce civil aircraft but also military jets would. have invited questions as to their ability russia has been and still is one of the world's leading manufacturers of military aircraft is that correct this issue doesn't get a lot of attention and i can confirm that russia has a strong staining in the international market for military aircraft. and the two large families of jets we produce. eggs in this. which complement each other. so we can offer our customers fourth generation jets as well as generation advanced front line aircraft. aircraft have been the

backbone of russian arms exports for the past fifteen years in terms of sales volumes. so little publicity actually means always good in the industry. i would say so. development in the past. and in recent years it's been reinforced defense contracts from the government. force. is it true that the real cutting edge jets are not available for export they are still considered secret or does it only concern specific equipment options. experts probably see his changed. all the hardware we produce on the international market of course there are certain limitations. to specific options other commitments that we observe in respect of the russian ministry of defense. by and large we're pretty open for our

international partners. to give you an idea of just how open we are because we are currently working on our most advanced project the fifth generation jet. partners. today russia is regrettably far from being a world leader in civil aircraft manufacturing what do you see as our biggest limitation. to do to reclaim its market share and its reputation as a world class manufacturer. the soviet union didn't market its civil aircraft a lot but they were seen as reliable. that would take a lot of hard work. we want to measure. used to occupy twenty five percent of the global market for civil aircraft. ensured stable demand for the products aircraft industry had to offer. today

aircraft market. at about three percent of the global market so if we were to. domestic demand we wouldn't be able to remain competitive internationally. that's why we need to cater to an international market and that would require us to embrace new best practices with regard to design engineering production. and even financial arrangements. so aircraft in the global market today are provided only. that means. only manufacture aircraft but also offer a payment mechanism for the customer and then brings us to a whole list of challenges we need to resolve the. mistaken your united aircraft corporation was. in two thousand and six and that

means you've been in the market for six years now and i remember that when the company was originally introduced it was much trumpeted in the press as an important breakthrough development that years later you're still telling me how much work needs to be done about the progress in the past six years have you be merely gaining traction or have you managed to create any essential capacities. we have actually a lot over the last six years on the other hand six years is not enough time to address all the deficiencies that had been piling up for two decades. we've doubled our production output in the past five years bending it by twenty percent on average each year. but. in the meantime. fifty four aircraft supply to the market in two thousand and seven. two hundred ten aircraft produced last year. in the global market. in international most of

our sales are still military aircraft have the capacity to make an impressive appearance in the civil aircraft market. as c.e.o. of the company could you tell us now if. the industry into a comprehensive corporation was the right thing to do or in other words has your consulate aided business proved efficient. and i'm convinced that if we are to compete in the global market we need to concentrate all of our resources in a single entity. so you think it was right to do so. you can be competitive in the global market if you scatter your potential. if we look at europe. and. the integrated organization that brings together all of europe's major assets related to aircraft manufacturing. in the united states. boeing. mcdonnell douglas. integrated business which doesn't

only command american industrial assets but also collaborates closely with me japanese industries the. production one to that end and that's exactly what we did six years ago. described you as a state run company but who is your primary source of finance the government private investors. who. are present stage we need a lot of investment and considering our initial liabilities which originate from the large debts the cumulated companies the corporations with wouldn't have been able to settle its accounts without some serious support from the government. financing framework is based on a combination of substantial government funding. reinvested profits and money from

our corporate partners we finance our military aircraft projects with earnings from our military sales which we don't earn enough to sustain both civil and military production so that's where the government comes in. finally we actively encourage our partners to invest in our civil aircraft projects for example we're promoting superjet project in collaboration with. a subsidiary of the finmeccanica group will be jesting this framework in the future as we increase our production volumes and we are planning to gradually reduce the share of public funding and expand the share of our own revenues from successful projects in investing in our development . may i ask you how much the government spends on your corporation every year. this is a rather complicated question it's hard to give

a simple answer for instance the government tends to place orders with us for military aircraft and other hardware is that the government spending money on us or is it us working for the government or will that money be considered public funding should with. the government hasn't made any money on you so far has it in fact the government has a stable income for military aircraft exports. and we're one of its most profitable industries in that segment. in the meantime however the last are competitive positions in areas. and commercial. proceeds from military exports business development you know three areas so how much money does the government spend it here to fill those gaps the government doesn't feel in specific gaps it simply invests in a number of programs we expect to close this year with

a total of two hundred billion rubles in revenues and i think you will maintain losses at about five percent of that. so your losses add up to five percent. that isn't march. if we look at the corporation's earnings before interest and taxes rate of return is ten percent so we do generate operating profit. but at the same time we'd be a considerable financial liabilities which are out of balance and that's what gives us this amount of losses. i say i'm no expert in economics but considering your dynamics and such a loss rate you should be able to break even in two or three years that's right we aim to reach the breakeven point within two or three years. but we'll carry on in just a minute. i'm talking to me sound president of the united aircraft corporation spotlight

will be back shortly after a break so stay with us we'll continue this interview less than a minute. like millions of americans i've lost thousands of dollars in retirement funds and i haven't had as bad as many that's not just about them it's about me too. me man brown ya gotta show. needed. but now she. says

this is my film i get the last word this financial crisis will not be turned off like a light switch. mission . cretaceous three times for chargers. arrangement three. three stooges three. old free broadcast quality video for your media projects a free media don carty done time.

it would be so much brighter if you moved the balance from finest impressions. claim starts on t.v. dot com.

feel. good music city good laboratory to mccurdy was able to build a new age most sophisticated robot which all unfortunately doesn't give a darn about anything tim's mission to teach creation why it should care about

humans and worry that this is why you should care only on the. welcome back to spotlight i melbourne over and just a reminder that my guest on the show today is me sound president of the united aircraft. one hundred is a cutting edge russian aircraft gotten a lot of publicity. before competing in the global market but only as far as the short whole segment is concerned do you have any medium or long range aircraft in the making some say that's a market segment where russia doesn't stand a chance for now. aircraft production is a fast growing market opportunities today. aircraft in both the medium whole

segment. you mean russian aircraft both russian and foreign made there is an assessment. with the world's leading companies. that the two powerhouses. of the global market remain unchallenged forever. the chinese are also investing heavily in developing their civil aircraft industry as for superjet one hundred it's actually a crossover between aircraft in a regional jet. in terms of cabin comfort it belongs with short whole airliners like boeing seven three seven. three twenty other than with jets like. dear. applied for superjet really reaches beyond the scope of a regional jet. as for larger aircraft we are currently working on

a big project titled twenty one which should give us a product line of passenger aircraft ranging between one hundred fifty two hundred seats. that should become our bid segment. products in the industry are concentrated. but will boeing airbus let you get a foothold in that market. mammoth competitors and they've been consolidating and expanding production too. is growing so rapidly specially in southeast asia the emerging airline companies just can't afford to sit around in a wait for five or six years before they can buy aircraft from the world's leading manufacturers is that the kind of waiting list they have struggling to keep up with demand even with their enormous output capacity running at three hundred fifty four hundred aircraft per annum to me and is increasing pace so i think there is an

opportunity for a third contender to enter the market and we have a chance to be there a contender we would have to be china to it. we don't just compete with china we're also exploring ways to cooperate and i believe we have some competitive advantages to get there the head of china we have a strong background in engineering research in training but. china will cooperate as long as you stay ahead but once they feel your behind they will lose interest. but agree now go back to the super jet one hundred project. the plane is up and running it's in the spotlight so here's a question to you as the project managers since as i understand you are not the engineer who designed it i am an engineer. brainchild as a manager do you think this project has been a success i wouldn't be that certain as to who's brainchild it is. but it's

you who sell it and i think generally this project has been a success we have managed to do a really great job in such a short time starting from scratch and working our way up to getting it certified in europe not only in russia putting it in operation and promoting it on the world market this is where you are quite satisfied with the project because. aviation projects. time to reach maturity so i would say i am happy only in a while so far i can see that the project is developing successfully which we still need another eighteen to twenty four months to increase the number of aircraft in operation to set up a maintenance service and sort out other issues as well. well one of the problems that were what were the reasons why i missed the. probably is that one of russia's super jets one hundred crushed in may while on a demonstration flight in indonesia the details are in

a report by spotlight still in the media. indonesia was the fourth stop of a six nation advertising two of the super bowl is simply just the plane disappeared from radar shortly after takeoff on the ninth of may two in a demonstration flight the next day the plane's wreckage was discovered on the side of the dormant amounts can hold. five people on i had a number of factors were considered as a possible cause of the crash. another could be human error the pilot reported it dropped to six thousand feet during the flight a violation of the minimum multitude in the mountainous areas where peaks rise to eleven thousand feet much was said of the mystical aspect mount selig has been dubbed an airplane graveyard of the last ten years seven planes have crashed before the accident one hundred seventy orders had been placed to the jet around the world

right after the crash there was speculation about the loss of potential buyers however there have been cases in that the asian when the questioning a demonstration to a did not influence the commercial success of a plane. crash in indonesia a fact the sales and the reputation of the corporation's through so i mean it's amazing how often such accidents are much talked about but don't have negative consequences. first of all. with the reliable information we have in our preliminary analysis indicates the aircraft was in good order and the cause of the crash was human error. but i would not like to jump ahead of the official investigation but i guess its conclusions. obviously the crash wasn't good for the promotion but if you look at the root cause analysis and this is difficult issued by the european aviation safety agency

earlier this year the plane's flight plan. so far. the aircraft is absolutely consistent with the existing requirements. every year from their intent to operate the aircraft among them indonesian. and mexican companies. who get their first order this year or laos airlines with this year will also send super jets toward joint venture in venus' italy where they will be customized forwarded to a customers in mexico early next year so. despite the crash the project. is still there and the project complies with all the requirements of the market even its. geographic scope of sales is indeed impressive but there was an issue the media reported on last month

when our mamiya an armenian airline who had been the first to place an order for super jet announced that it was i quote declining for the purchase and having bad. the one jet that had already been supplied complains were that pair parts for the jets were too expensive price three or four times above boeing's rates and that its monthly maximum flying time was too short a mere one hundred fifty hours a month compared to boeing's three hundred hours only there were also claims that super jets angels are to have need further improvement could you comment on that is it true that very first customer moreover a company from a country that's very friendly toward russia has given up on superjet. we all know the media are especially fond of covering bad news. and you know i'm just quoting a story from the press right now life is much more complex. did

a total of about one hundred flights on superjet with total flight. time running it twenty four hundred flights are was within a year and generally the aircraft was an operation it was successful. two hundred flight hours a month that's right but i believe it is quite a good result for an early stage of operation for the kind of route network. operates we do have a commercial dispute with our model but we're contributing effort and both sides. should accept a bill solution. so i expect to see progress in this negotiation rather soon. speculation on our relations with that we've seen in the media will become irrelevant because i think we will be able to come to agreements with our medea. naturally tend to have higher expectations regarding the product which becomes an issue in early stages of

a project. we do our best there demands as much as possible but still. with any project has to evolve stage by stage. in a appreciate the feedback. and. should contribute to our improvement. so there is a chance that next time off why to armenia it will be a superjet. i would say this is quite possible. there is one thing i still cannot understand after listening carefully to what you've said the government has invested so much money and attention in promoting aircraft manufacturing in russia and it's established this massive industrial corporation and yet you'll barely find a russian jet in operation in the russian market at least from where i'm standing it seems that all russian companies only operate boeing and airbus products why is that. airline passenger traffic in russia shrink dramatically.

polling the collapse of the soviet union. all of our airlines before operating abundant fleet of aircraft while being confronted with when doing traffic volumes and in for the next ten years no one in russia was looking to buy new aircraft except for small batch purchases only but on which naturally this wasn't very encouraging as far as business developments in the industry is concerned in addition there were substantial difficulties in marketing russian aircraft internationally. ability was restored in russia limited demand for aircraft increase char pieces falls in we couldn't instantly provide for its little manufacturing in the previous decade or so but no we are gearing up to make sure that is significant share of the russian market should be provided with russian made aircraft superjet one hundred twenty one. both are corp for in the russian

government have also been exploring ways to promote russian made aircraft in the russian market in storage and i believe that we meet again in a few years time we'll be looking at a completely different market dynamics overseas with large numbers of russian made jets what you operated by russian companies thank you you have promised to tell us more so i'll go looking forward to our next meeting thank you very much for being with us and just reminded that my guest today was. president of the united aircraft compression and that's it for now from all of us spotlight will be back with more comments on what's going on in and outside russia until then stay on r.t. and take your.

wealthy british style stock. that's not on the. market why not. find out what's really happening to the global economy with max cause or for a no holds barred look global financial headlines tune in to kaiser report. is the eat. meat.