Russian Planes Flying To Court
24.09.2009 — Analysis
Russian air carrier Red Wings has filed a suit against OJSC Perm Engine Company. The plaintiff demands the compensation for damages incurred through plane downtime which, in the opinion of the carrier, exceeds all limits due to bad engines. The Perm engine makers point out the lack of professionalism of technical staff of the air carrier. The RusBusinessNews observer established that the dispute between the parties will not be settled until either Russia significantly increases the production of civil aircraft or a disaster happens with TU-204 which will force the Russian Government to pay attention to the industry.
The PS-90A engines fitted on IL-96, TU-204 and its varieties fail with a frightening regularity - 26 March, 28 April, 2 August, 3 August of 2008, 25 April, 24 May, and 20 June of 2009. The most recent failure has occurred on 21 September in Yuzhno-Sakhalinsk. Altogether in two years just one carrier - Red Wings - experienced ten engine failures, according to the company's employees. The number of TU-204 breakdowns amounts to several dozens. Fortunately they have not led to tragic consequences. The breakdowns, as a rule, were due to the drop of oil level or the failure of the fuel system after which the plane was landed on one engine.
It has to be said for the sake of fairness that the foreign Boeing and Airbus also experience engine failures, and quite often with grievous consequences. In March 2003 when a Boeing 737's engine caught fire 102 people died, in July of the same year one more plane of the same make had crashed, 115 people died. In September 2005 a Boeing 737 crashed right after takeoff, 147 people died. In July 2006 an A310 crashed, 124 people died, in August 2008 another Boeing 737 crashed due to the engine failure.
Russian carriers react very acutely to attempts of counting the number of failures of Russian and foreign planes. Aleksandr Lezhnev, the Deputy Chief Engineer of the Aviastar-TU carrier: "I do not want to comment on all this quarrel around TU-204. We had five failures on a Boeing. So what? Who said that foreign machines do not break? Only unqualified people can think like that. They do, however, run airline companies, promote foreign equipment in our market thus killing the domestic aircraft production."
Not all airlines using Russian aircraft are of the same opinion. Aeroflot representatives made several statements to the media that PS-90A engines have a short service life and frequently fail. Red Wings specialist calculated that the five new planes have had 246 days downtime due to technical faults in a year. The sole replacement costs of broken engines amounted to 45 million roubles. Altogether, taking into account the leasing payments for the rented TU-204s, the company's losses amounted to 150 million roubles.
A very serious situation arose as a result. In the opinion of Alexei Dmitriyev, the head of the Ulyanovsk Aviastar-SP plant's service centre, all this has not so much to do with the flight safety as with the profitability of the business. Air carrier has losses and makes claims against engine and frame makers. The Perm Engine Company has been taken to court to compensate for the losses due to the aircraft downtime. The Ulyanovsk plant is managing to fend off the attacks so far which is why the carrier does not make claims against it. Aviastar-SP, however, has to give their engines to Red Wings so that the plane can still fly. Which means, in turn, that the plant does not have enough engines for normal operation.
Red Wings declined to comment on their dislikes of TU-204 before the court hearing. Konstantin Teterin, the Company's Director General, has made many statements to the media that he is unhappy about a number of things.
Firstly the situation with spare parts is catastrophic - the quality is low but there are no alternative suppliers in Russia so you could wait for years just for a windscreen. Naturally, where there are shortages black marked appears soon, it is possible for the parts to be sold from the same manufacturers, but through unofficial channels.
Secondly, the bonuses paid to the TU-204 developers do not depend on the end result of their work. They get the money, as Mr. Teterin claims, even for the craft which are idling which is why the designers often experiment and release the models which do not conform to the declared parameters.
Thirdly, aircraft engines are not the most important product for the Perm Engine Company which in the nineties started making gas turbine units for pumping natural gas.
All these main causes and loads of smaller ones lead, in the opinion of the carrier, to artificial lowering of the aircraft capacities rendering it uncompetitive.
Engine makers, however, think that all the claims announced do not apply to them. Ramil Khambekov, the Deputy Commercial Director of the Perm Engine Company, informed RusBusinessNews that there are no problems with spare parts but that air carriers do not buy them. Aircraft downtime is not good for the manufacturers because the company gets paid for hours flied. So both the manufacturer and the carrier are interested in planes flying, not being grounded. Mr. Khambekov does not agree with the claim that aircraft engines are not a priority for the Perm plant. He said that the gas turbine units are the "second leg" which the company needed in order to avoid falling into the crisis of the nineties.
The representative of OJSC Perm Engine Company considers the claims made by Red Wings to be incorrect. The air carrier has only eight TU-204s, whilst the number of 300 PS-90 engines in operation is about 300. No other company except for Red Wings made any claims in regard to either electric or fuel systems, said Ramil Khambekov. The claims are being made by the single company which recently replaced its entire aircraft maintenance staff. This, in the manager's opinion, tells a lot; he does not, however, hide the fact that the engine does have design faults which are being found during the service life. The work on the improvement of the engine is ongoing, there are new materials and new ideas.
Alexei Dmitriyev, representing the Ulyanovsk aircraft plant, does not want to umpire the stand off between the air carrier and the engine makers. He does agree, however, with the fact that there are many complaints about the engine. The design, in the expert's opinion, is rather clumsy and the implementation leaves a lot to be desired. Low reliability and short service life multiplied by the low capacities of the Perm plant result in the lack of engines at Aviastar-SP. The manager declined to name the cause of the Perm plant's inability to increase its capacity while stating that this cause is known to him. Mr Dmitriev thinks that the plant has to implement a set of measures to get the engine to perfection. In Ulyanovsk they hope that the improved PS-90A2 which has been tested already, will conform to the modern standards. If that does not happen the specialists do not rule out the possibility that TU-204 might have to be grounded until such time when a reliable engine is made for this aircraft.
Timur Khikmatov, the Head of Public Relations Department of the Russian Ministry of Transport, informed RusBusinessNews that a decision about grounding a particular aircraft model can be made only after a crash to establish its cause. There have not been any crashes of TU-204 so this option is not being considered. In the official's opinion the manufacturer has to make the decision regarding what engine should be fitted on the aircraft.
The only alternative to the Perm engine is purchasing engines abroad. Not all experts are supportive of this kind of development, because nobody knows what the key problem with the PS-90A engine is. By the way, the Russian President's IL 96-300 is fitted with the engines of this model.
Yuri Ravikovich, the Head of Department at the Moscow Aviation Institute, thinks that too few planes have this engine fitted yet. Large batches are only possible with the support from the Government, as it is done all over the world. When the machines are in use they are improved, new technologies appear. When it is just a few planes then it is very difficult to finalise the engine.
The expert does not have any doubts in the qualification of the Perm Engine Company specialists. According to the data provided by Mr Ravikovich the service life of the PS-90A2 engine, which was modernised jointly with American developers, will be longer than its predecessor's. The work on the development of the new engine for the mid range MS-21 jetliner finance by the Russian Government will also be useful for the Russian aircraft building industry. In 2008 OJSC Aviadvigatel (Aircraft engine) was appointed the main designer of the family of engines, OJSC Perm Engine Company - the main mass manufacturer. By 2015 the Perm specialists promise to have a new engine on Russian and international market.
Vyacheslav Grigoryev, the First Deputy Director General of the Aircraft Engine Makers' Union, reckons that both parties are right in the dispute between the carrier and the manufacturer. Being right is a consequence of the economic relations existing in Russia today. The nature of these relations has been talked about not only by Konstantin Teterin, but also by the co-owner of Red Wings Aleksandr Lebedev.
The global bureaucratism of governmental structures which leads to the situation where there are service codes adopted in the sixties are still in operation. The system of relationships between maker and consumer which has not changed much since the soviet times - you do not have to fight for your customers in Russia, you can corner them instead. The dominance of people of the nonmarket psychology and experience in the design bureaus which leads to the stagnation in the aircraft building industry. The state which does nothing to counteract the corruption and black market, thus helping the increase of prices of industrial products while the quality is falling.
The lack of understanding between people involved in aircraft manufacturing and air carriers, as well as the extremely hard conditions in which the air transportation business is run, forces Russian entrepreneurs ask the Government to drop the import duties on foreign planes. All this looks like a desperate cry to hand the country over to competitors as the business has no energy left to change the fallacious economic relations which render any domestic product uncompetitive.
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