Thread by @Prune602

‼️ Russian Domestic Aviation Thread

First things first, as always

🚨 DO NOT FLY ON A RUSSIAN AIRLINE

I’m trying to save lives here!

An article (or articles) triggered this thread, and I’ve been trying to figure out how to explain the situation. So I’m just going to do my best, and it may or may not be a linear explanation.

First thing I do want to point out is that

Aeroflot is a Russian Government majority owned company.

en.m.wikipedia.org/wiki/Aeroflot

In fact, in the illiquid assets of the National Welfare Fund you can see shares of Aeroflot

archive.ph/2024.08.07-131…

From time to time, there have funds pulled from the liquid assets of the National Welfare fund to benefit the domestic airlines.

For example, buying the planes that were on lease and then stolen. Until that problem is fixed, the plane can’t fly internationally, or else it risks being repossessed.

And it makes relations really awkward when a country is forced to repossess a plane. 😬

Also remember that there are layers of sanctions and blocks related to Russian aircraft for a variety of reasons.

For example: Even if they bought the stolen leased plane, they still will not be able to fly it in certain areas for SAFETY REASONS. For example in Europe.

People do not feel confident in the airworthiness of Russian aircraft. And therefore feel it would be unwise to introduce a situation where a plane could crash onto European territory.

Side note: I feel like this is the same basis that should be used to block the shadow fleet tankers. If they are not adequately insured and maintained, then they are a risk to the waterways of the countries they are traveling through or near. Environmental hazard.

In terms of Russia’s current domestic fleet, there has been a lot of discussion surrounding spare parts.

This applies to not only the foreign aircraft such as Boeing, but also “domestic” aircraft like the CURRENT SJ100, because it is made with imported parts.

Overtime we have begun to see that Russia has made certain moves that have…eroded…confidence in Russian aviation.

Here’s a good example 👇

https://twitter.com/prune602/status/1658112058368446465

Time for me to repeat the usual:

Evading Sanctions still hurts Russia. It usually results in

- increased cost
- increased time

And often a reduction in quality.

This article/thread about “Turboshaft”…name still makes me giggle…is a good example of that.

Not only was quality decrease but the prices for parts skyrocketed

https://twitter.com/prune602/status/1789092021338067341

That’s a lot of money they didn’t have spend before

Imagine a part that used to cost $15,000 suddenly costing over $100,000 😬

https://twitter.com/prune602/status/1789092044150907246

Actually just stop and read that whole thread. It’s good info. It will shorten this thread significantly.

You better have read it 🤨

Note: since Turboshaft (🤭) has been slapped with an export ban, that means prices are likely to increase even more.

Aeroflot has been having some financial difficulties

https://twitter.com/prune602/status/1760427774597022081

And there are frequent reports of their staff being overworked. Like this pilot.

https://twitter.com/prune602/status/1818384628446880248

And with flight attendants

https://twitter.com/prune602/status/1808263673821253763

Another Sidenote: Russian media has started a trend (maybe it originated on social media) of heavily objectifying male flight attendants.

It’s kind of creepy the way articles have been written. As if their job doesn’t suck enough.

These guys are very physically fit, and I can almost understand the need considering some of the reports you hear about this flights. They might also function inflight security. Flight attendant bouncers.

While we’re discussing costs, a lot of airports air disrepair. And a lot of the costs associated with maintaining these things will have to be passed on to the consumer.

This thread gives some details

https://twitter.com/prune602/status/1773814507082518777

Russia is not going to be happy about that because an airline ticket is in consumer basket and it will therefore increase “official” inflation. Unless they find some way to separate it.

But things are falling apart.

Like technicians getting run over (he lost his leg)

https://twitter.com/prune602/status/1792226070696952043

Planes hitting each other

https://twitter.com/prune602/status/1800015595544682845

Food delivery and water delivery vehicles have run into and damaged planes.

😂 It’s a nightmare

https://twitter.com/prune602/status/1766494557418508429

I’m having to post one at a time now, so the thread isn’t over until I say it is.

Also worth noting that due to lack of parts, some training schools had to shut down.

And not having aircraft mechanics seems like a problem 🧐 but that’s just my opinion

https://twitter.com/prune602/status/1641853412751953920

Now, there’s only so long that these patches to planes can last. And even the repairs come with a certain amount of risk.

For example:

https://twitter.com/bayraktar_1love/status/1811860714392580430

You know, I have a running joke:

Imagine what an airport bar is like in Russia.

That’s it, that’s the joke 😬

One more

So all these patches will only last so long. They’re going to need NEW AIRCRAFT.

This was mentioned in the thread I told you to read above, which you definitely did right?!

“From 2025, we will start losing all our foreign planes”

Oh dear…

https://twitter.com/prune602/status/1789093213715779943

So Putin announced this grand plan of all these aircraft they were going to build…blah blah blah 🙄. Give me proof!

When you can succeed in making a chair that won’t break people in half, I have my doubts.

THEY FAILED AT MAKING A CHAIR!!!

Fun thread btw 👇

https://twitter.com/prune602/status/1755615888928387399

And we get into the same race that we do with locomotives.

Can they build new aircraft fast enough to replace their OLD aircraft before they HAVE to be retired.

Debatable.

And I don’t think the industry has confidence in their abilities.

https://twitter.com/prune602/status/1790478897659675038

We need pay attention to realities of what is left in the LIQUID ASSETS National Welfare fund.

This thread gives details. (Remember that Aeroflot is part of the illiquid assets of the NWF too)

https://twitter.com/prune602/status/1821191330996867373

See how it has continued to shrink? And everyone wants a cut to try and fix a problem. Choices will have to be made.

But also, if Aeroflot goes bust that also hurts the NW. 😬.

The problem is, there are lot of companies in the illiquid assets that have their hand out.

https://twitter.com/prune602/status/1821191337984860499

So let’s talk about the planes. By far, the plane that has the most pressure on delivery is the MS-21 (sometimes translated as MC-21)

I had to share this because it’s funny that they had to send a plastic model because it still wasn’t ready

https://twitter.com/prune602/status/1762508645109989631

And then it got delayed again. Look at when it was ORIGINALLY supposed to be delivered.

https://twitter.com/prune602/status/1763243045816877245

And then it was delayed again.

When this happened they decided they wanted to do an audit. And that’s what we’re going to discuss soon.

DEFINITELY READ THIS THREAD. (I will never not laugh about the Baikal)

https://twitter.com/prune602/status/1763329848389652927

Then Aeroflot decided to cancel all their other orders and only buy the MS-21s

If you read this thread, you can see my thoughts on possibly WHY they did it. (Hint: it helps the manufacturers look better)

https://twitter.com/prune602/status/1798859827893920003

And they recently said they were going to give the MS-21 Flight tests before the end of the year. (Because they’ve been so great at deadlines thus far! 🙄)

https://twitter.com/prune602/status/1822688828638794155

Ok, if you’ve read ALL of that, we’re FINALLY READY for the new stuff!

I will warn you that my thoughts are that they went into this looking for an excuse to delay or reduce delivery further. But in a round about way they might be right. (It’s worse)

HERE WE GO!

‼️ “The winging stage is passing

Plans for the delivery of new Russian aircraft are being cut”

🍿

kommersant.ru/doc/6880281

“The comprehensive program for the development of the aviation industry, developed in 2022, may be adjusted, Kommersant has found out.”

“During an audit of the United Aircraft Corporation plants, consultants from Sberbank and Gazprom Neft came to the conclusion that there is no “economically justified demand” for 1,000 new domestic aircraft by 2030.”

🇷🇺: 😅 We just don’t NEED as many aircraft!

“The audit also revealed the risks of delays and an increase in the cost of aircraft, which may require an increase in subsidies.”

It’s getting more expensive and government can really afford a lot of subsidies anymore. Mortgage subsidies are also getting cut.

“According to Kommersant’s sources, the aviation industry may be asked to work out price controls and, together with the Ministry of Transport, assess the actual volume of aircraft deliveries needed.”

🇷🇺: BLYAT! SOMEBODY FIX IT!

So as predicted they’re probably going to revise the numbers down AGAIN

“According to them, the talk may even be about creating a new strategy instead of adjusting the previous program.”

🇷🇺: We’re just going in a different direction 😅

Don’t you just love coming across corporate speak?

To me, it sounds like someone realized they couldn’t deliver, and then told someone else to find out if they really NEEDED that many.

But weirdly in the process they may have revealed some hard truths.

And because this article is a few days old, I guess they’ll be talking to the Russian Prime Minister THIS WEEK about the result.

Closed meeting, obviously

As I mentioned before, Sberbank and Gazprom Neft reportedly began an audit after all the planes delivery dates were pushed back. And the Audit was completed on 9 August 2024.

Some people discussed the results with Kommersant anonymously, but no one would officially.

You can see here how the initial aircraft expectations compare to the current ones.

You can also see how funds were already pulled from the NWF

“According to the Ministry of Transport's forecasts in the KPGA, the fleet of foreign aircraft of all types was expected to decrease from 738 airliners in 2022 to 319 aircraft by 2030, with the rate of retirement accelerating from 2026.”

That’s a lot.

It’s important to note that these are just their ESTIMATES of when they will need to be retired. With poor maintenance, parts and environmental conditions it could be worse.

Here is the chart they included for forecasting.

Keep in mind, this is probably the best case scenario (I’m basing this judgement on how bad they’ve been at previous forecasting)

The auditors decided that ACTUALLY, maybe they didn’t need as many planes.

“With planned production of 140 to 270 aircraft per year, the auditors estimate the real need at 50–60 aircraft.”

I’ve decided to pause here and just tell you up front how what’s coming next might be true, but that means things are actually worse. That way, as we read further you can see it see it more clearly.

1. Export potential - The costs of these planes are getting more expensive. That means they may actually cost as much OR MORE than their foreign competitors.

If you were free to chose, would you choose the higher quality cheaper plane or would you get the plane from Russia and all the headaches that come along with Russia.

Remember, one of the reasons India cancelled new military contracts with Russia was because of their concerns about even being able to get spare parts.

So I think the exports of these planes will be limited to people who can’t get anything else. (Assuming Russia ever actually makes it real production levels)

2. The Cost of Flights are getting more expensive and less people may be able to AFFORD to fly.

Everyone keeps trying to say the economy is great in Russia. Well, I disagree. With inflation and the increased tariffs that are likely, demand may drop.

That’s bad.

3. Airlines may not be able AFFORD planes

As the prices increase, the government runs out of money for subsidies, people fly less, and more economical airline woes occur, the demand for plane from airlines may drop. Because they can’t afford it

All of this would point towards worsening economic conditions in Russia reducing demand NOT just: WHOOPSIE we overestimated!

But that’s my interpretation overall.

Even getting this things produced AT ALL is still the biggest problem. And like I said, I figured that coming up with an excuse to reduce necessary production even more was probably the driving factor to start with.

UNPAUSE!

Back to the article

Here is where they mention that Aeroflot changed their order

Now we start in with the excuses

One person suggests that “airlines have enough reserves to maintain transportation on existing foreign aircraft by extending the flight time.”

Haven’t we heard this cr*p before for other equipment?

That how things like this happen 👇

https://twitter.com/wartranslated/status/1798631620444139702

See

https://twitter.com/prune602/status/1798831869074489668

“The current fleet of approximately 880 aircraft, according to UAC estimates, is sufficient to transport at least 113 million passengers per year.”

How did they estimate it? Remember, they were probably sent in to find an excuse.

And they might even not understand the industry

The original numbers came from asking the airlines what they needed. But these auditors are declaring that they’re wrong and that they’re over estimating.

I tend to believe the airlines over the auditors especially considering the circumstances surrounding this audit.

HOWEVER

I have pointed out in my thoughts at the beginning that the airlines demand may have (due to unfortunate circumstances) reduced since 2022.

And I must point out that there are cases where the truth is somewhere in the middle.

A good example of this is with the Railroads. Russian Railways capacity absolutely is shrinking, but in the fighting for getting railway availability they were inflating their requests for shipments in hopes of increasing the share they were allowed to ship.

It was hilariously obvious because, for example, the requests for shipment of coal significantly surpassed Russia’s yearly coal production. Obviously so.

But I get why they did it.

“According to Kommersant’s sources in the aviation industry, following the audit, the Ministry of Transport, with the participation of UAC and airlines, was asked to develop a new target transportation model with an optimal route network and aircraft types.”

“It is necessary to take into account both new, realistic transportation indicators and economically justified orders for Russian aircraft, taking into account the realities that have changed over the past two years, says Kommersant’s source.”

Actually…yes

Like I mentioned earlier, there are actual setbacks. And Russia’s economic realities are significantly different than they were 2 years ago. They need to take that into account, and they may need to tighten their belt and make adjustments to keep ANY airlines running.

None of this solves the giant hurdle of actually MAKING IT TO PRODUCTION. But it is a problem that needs to be considered

Here is a chart. I’m not sure how accurately they can assess these things considering the economic volatility that exists right now, but hey they made a chart.

We talked about some of this.

But…why would UAE buy these Russian aircraft when they could have, well, anything else? 🧐

Reminds me of the LADA sales 😂

https://twitter.com/prune602/status/1802879526084411567

They mention the very low demand for the SJ100. I gotta say, seats that break you in half make it a no for me.

Oleg Panteleev points out that if Aeroflot completely abandons the SJ100 they might need to reconsider their project.

There are 160 of the OLD SJ100 aircraft that are working on regional routes.

Could be a real problem for more remote areas.

“Most of Kommersant’s sources in the aviation industry do not expect any type of aircraft to be abandoned in the coming years.”

😬 Maybe they should

“Some of Kommersant’s sources allow for increased competition for funding between various projects – not only for funding development, but also for subsequent subsidies for purchase and operation”

THERE MAY NOT BE MONEY FOR SUBSIDIES!!!!!!

Another chart. Again, these charts may be optimistic.

Intermission (thread isn’t over yet) 🥵

I’m back! Where were we?

The price:

“According to Kommersant, the cost of the first SJ 100 by 2027 is estimated at 5.4 billion rubles, or $63 million at the current Central Bank exchange rate, and the MS-21 at almost 9 billion rubles ($103 million).”

“The indicators are defined by the producers as break-even in 2023.”

Well it’s 2024 and things have gotten worse, so…

You can see here the competitor prices

🇷🇺 SJ100 estimated price: $63 million
Embraer 190-200 price: $40 million

🇷🇺 MS-21 estimated price: $103 million
Airbus A320/Boeing 737: $45-50 million

Russia can not compete

You can see that they atttibute part of the price increase of the MS-22 to the switch from

🇺🇸 American P&W engines
to
🇷🇺 PD-14 engines

I’m very curious how much HEAVIER the Russian engines are, and if that is the source much of the additional weight on the plane.

I bring it up, because Russia is have a similar problem with Tugboat motors. The domestic motors are heavier and larger and it’s causing problems.

https://twitter.com/prune602/status/1771966965743063224

“Almost 6 billion rubles out of 8.9 billion rubles in the cost of the MS-21, says a Kommersant source, are the costs of purchased components (PCI).”

Wait to have your pants shocked off

‼️“According to him, due to the rise in the cost of PCI and the increase in labor costs, auditors have identified the risk of the cost of the first MS-21s growing by 30%, to 11.5 billion rubles.”

That $126.5 MILLION DOLLARS by today’s exchange rate

$126.5 million for heavy MC-21 that currently can’t get to cruising altunder weight when you could get an Airbus A320 for $40-50 million!

https://twitter.com/prune602/status/1823167733812580846

That ridiculous. I keep saying it. Russia can not compete on a level playing field

“In this case, the difference with the directive cost will grow from 5.3 billion to 8 billion rubles. According to auditors' calculations…this will require another 4 trillion rubles in compensation from the budget, necessary to cover the cost of this project alone”

Whose budget?!

There’s less that 5 billion Rubles left in the liquid assets of the national welfare fund, and they’re predicted a deficit in the Federal Budget of over 2 Trillion right now (it will probably be more)

Where does the money come from?

“Taking into account OPEX, according to the source, the cost of the entire program for the construction of 1.8 thousand aircraft by 2040 is estimated by auditors at 18 trillion rubles, of which about 10 trillion rubles is a subsidy from the budget.”

🇷🇺: 😅

“In addition, the auditors noted that the manufacturers have not defined the conditions and approximate cost of maintaining airworthiness, which is also important for understanding the necessary compensation for the costs of its operation.”

Cost of ownership is important!

“The auditors also saw the risk of cash gaps throughout the entire cooperation chain, Kommersant’s sources noted.”

One person decided to pull a random number out, without any other information.

Basically, in short

Manufacturers: OMG OMG OMG WHAT ARE WE GOING TO DO?

“A Kommersant source in the aviation industry says that work on reducing production costs is already being carried out by a working group within Rostec.”

The problem is, I don’t think “fixed prices” or their other plans are doable. But we’ll see.

Ok this next part…I…I don’t think they’re full understanding the reality of their situation.

A lot of these people are falling back on things they have done in the past and they simply do not live in that world any longer. They cannot expect the same results

Here Oleg Panteleev is talking about what they did from 2010-2015

“We successfully ‘pressed’ everyone on the cost of supplies, discussed long-term contracts and were able to come to a compromise,”

I don’t know if they can “press” people the way they used to.

🇷🇺: Hope etc…we’re going in a new direction…etc

‼️“According to the expert, if the arrival of new domestic aircraft and the withdrawal of foreign fleet are out of sync, a deficit of carrying capacity will arise in the Russian Federation, which will cause carriers to leave low-margin routes.”

There it is.

See the government even subsidizes flights to the more remote areas.

What if suddenly there are no more flights, and the airports fall into even further disrepair?

🇨🇳: What if we hold a referendum and they choose to join the Great China 😈

All of this is just basically “we should make a plan, a study, really investigate what is needed”

Meanwhile planes still aren’t being delivered

We’re almost done with this article, but we’re to a part I personally find hilarious.

“One of Kommersant’s sources knows that the range of the first series of MS-21, taken into account by auditors, will be limited to 2.3 thousand km due to the empty weight of the aircraft and increased fuel consumption”

👉 Because it’s almost 6 tons too heavy

“This will cover almost 70% of routes. After the restrictions are lifted as flight tests are conducted, the range will increase to 3.8-4.1 thousand km, which will cover up to 90% of routes, he adds.”

Just like that? HOW ARE YOU GETTING RID OF THE EXTRA WEIGHT!!!!!!???

Seriously…do they not understand how big of a problem this is? It’s not like a bureaucratic limitation, IT’S PHYSICS!

You can’t just “lift restrictions” 🙄

“Kommersant’s source also points to the risks described by the auditors: a shift in certification deadlines - up to a year, according to various estimates, as well as the risk of reaching the production rate of 36 MS-21s only after 2029”

36 MS-21s only after 2029?!

Remember the huge drop off of foreign plane operation they mentioned in 2026?

“According to Kommersant’s source, several PKI suppliers for the SJ 100 and MS-21 can currently only provide six aircraft of each type per year.”

HAHAHAHAHAHAHAHAHA!!!

“Given that the entire aviation industry is 80% loaded with state defense orders, the task set for the UAC civil division is obviously unrealistic, one of Kommersant’s sources is categorical.”

Massive understatement

That was even worse than I expected, and that’s saying something. As always

IT WILL GET WORSE

~ The End ~