Interview with A.E. Serdyukov, Industrial Director of the aviation cluster

WHAT IS THE CLUSTER'S POSITION IN THE CORPORATION?

The aviation complex is important both for the Corporation, providing about half of the total revenue, and for the country as a whole. The cluster focuses on competence in the development and production of engines, avionics, aircraft assemblies and helicopter equipment. Thus, the cluster produces everything: from the heart of an aircraft (engine) to the eyes (avionics).

WHAT POSITION DO THE COMPANIES ENTERING THE CLUSTER OCCUPY IN THE RELEVANT SECTORS OF PRESENCE?

Organizations of the cluster occupy a leading position in the industry and are the most organized companies in aviation. They develop and produce modern samples of aviation equipment and its components: helicopter equipment, aircraft engines for civil and military aviation, navigation and communication equipment, weapon control systems, fuel, hydraulic, electric, anti-icing, rescue, oxygen, fire-fighting and other aviation systems, chassis, landing equipment, equipment for ground servicing of aircrafts. The cluster's enterprises also produce gas turbine installations for surface applications as well as radio and electronic countermeasures systems

The cluster's products occupy a worthy place in the world market, in particular the holding company "Helicopters of Russia" is one of the leaders in the world helicopter market occupying more than 10% of the global market.

HOW DO EXTERNAL ECONOMIC CONDITIONS AFFECT THE CLUSTER'S ACTIVITIES? HOW MUCH IS THE CLUSTER READY FOR EXTERNAL CHALLENGES?

Despite the difficult foreign policy situation, the cluster's holdings have managed to maintain key relations with foreign partners. At the same time, due to the ruble depreciation the cluster's products have gained additional advantages in export markets.

At the same time, import substitution programs have been launched. A list of activities for transition to the Russian production of components is being worked out, since it is necessary to create and develop competencies that have not yet existed.

WHAT STRATEGIC OBJECTIVES ARE BEFORE THE CLUSTER? WHAT WAYS TO ACHIEVE THEM DO YOU SEE?

In accordance with the approved Strategy of the Corporation, the main strategic objectives of the cluster are revenue growth by a mean of 14% in ruble equivalent till 2025, an increase in the share of civil products, growth of operational efficiency and access to world markets.

HOW DO YOU PLAN TO ACHIEVE SUCH AMBITIOUS OBJECTIVES?

Growth in the cluster's revenue will be provided primarily through the inclusion of the cluster's products into the composition of such advanced domestic aircrafts as SSJ-100, MC-21, including within import substitution.

Another major source of growth is the supply of components for foreign aircraft manufacturers which will ensure long-term growth and stability of the cluster. The primary task in this direction is the international certification of products and production. We can see great prospects for ourselves in the latest military and civilian developments in India and China. In parallel with increased sales of aviation products, we will develop a network of after-sales services and increase a share of services in revenue.

In addition to aviation products, we also see a significant potential in the development of ground gas turbine technology and creation of new innovative products through application of the cluster competencies in the aviation industry in other areas of engineering.

WHAT WAYS TO INCREASE OPERATIONAL EFFICIENCY OF THE CLUSTER DO YOU SEE ?

To increase operational efficiency of the cluster's enterprises, we will continue to work on implementation of the lean manufacturing principles. We have already achieved high results in this area in the cluster's organizations, in particular NPO Saturn which produces aircraft engines.

In parallel with introduction of the lean manufacturing, we will perform technological audit and production efficiency audit. Those measures will allow identification of the main areas for improvement in all elements of the cluster's production system: output, capacity, logistics, procurement, quality and repairs management as well as focus on production and procurement planning.

Based on the audit results we will work out measures to improve efficiency in the most priority areas in pilot enterprises, after which the best practices will be applied in all enterprises of the cluster.

ARE THE CLUSTER'S COMPANIES INVOLVED IN ANY PARTNERSHIPS AND WILL THEY BE DEVELOPED TO ATTRACT ADDITIONAL FINANCING, PURCHASE REQUIRED COMPETENCIES AND RECEIVE ACCESS TO NEW MARKETS?

The cluster's companies successfully operate in partnerships. For example, the joint venture PowerJet created by United Engine Corporation and Safran produces SaM-146 engines for SSJ-100. Created by United Engine Corporation, General Electric and Inter RAO, Russian Gas Turbines LLC produces turbines for the power industry. Russian Helicopters, AgustaWestland and Rosneft Oil Company participate in the joint venture Helivert which assembles medium-sized helicopters. Technodinamika Holding together with Curtiss Wright develops a fire protection system for MC-21. And these are just some examples of cooperation with foreign partners. Undoubtedly, international cooperation will go on expanding which will allow the cluster to strengthen its positions, acquire competencies and enter the world market of aircraft engines, units and avionics.