Eyeing India’s regional market, Russia’s UAC looks to supply 85 planes to Indian firms

Ahead of the BRICS summit in New Delhi, Russia’s United Aircraft Corporation (UAC) on Thursday signed initial agreements to supply 85 turboprop Il-114-300 regional aircraft to Indian entities Pinnacle Air and Sleek Aviation, according to Russia’s state-owned defence and industrial conglomerate Rostec, the parent company of UAC.

Both Rostec and UAC are sanctioned by the US as part of its economic campaign against Russia due to its war with Ukraine. The move has nudged Moscow to look at friendlier markets, such as India, India for sales as well as potential collaborations.

The agreements for the Il-114-300 planes inked on Thursday are not firm orders yet. Instead, they can be described as formalisation of the buyers’ interest in the 68-seater aircraft. UAC hopes to convert them into orders by the end of the year.

“A letter of intent was signed for the delivery of 50 aircraft to Pinnacle Air. A memorandum of understanding was signed with Sleek Aviation for the delivery of 35 aircraft, as well as the opening of a training center with a full-flight simulator at the operator’s facility,” Rostec said in a release.

The initial agreements were signed at INNOPROM.India, a Russia-India trade event in New Delhi. Both the potential Indian customers of the Il-114-300 aircraft currently don’t operate airlines. It couldn’t be immediately ascertained if the two entities are looking at entering India’s regional airline segment.

Pinnacle Air is a charter helicopter operator, and its operations also include aviation consulting and aircraft sales and management. Sleek Aviation is a Gurugram-based company with aviation sector entrepreneur and former Indian Air Force pilot Dilawer Singh Basraon serving as director.

“India has significant potential for developing regional air travel, and the Il-114-300 is well suited to expanding the route network and improving transport accessibility. The agreements reached today confirm the Indian airlines’ interest in the Russian aircraft and open up new opportunities for our cooperation,” said Gennady Abramenkov, Russia’s Deputy Minister of Industry and Trade.

The Il-114-300 is a completely Russian-made aircraft, with everything from its avionics to engines manufactured at its facilities. Rostec believes that the turboprop aircraft, which is comparable to the ATR 72-600, would fit well in India’s plan to push regional aviation growth through the UDAN Scheme.

In addition to passenger transportation, the aircraft can be used for mail and cargo delivery, as well as medical and rescue operations, according to Dmitry Lelikov, Deputy General Director (Investment Activity) and Board Member at Rostec.

“Today's signings are the culmination of extensive work that began after the Il-114-300’s unveiling at the Wings…exhibition in January of this year. We saw strong interest in this aircraft from local operators, and today this interest was formalised in agreements.

We plan to conclude the first firm contracts by the end of this year. As our cooperation develops, we are prepared to move forward and transition to an industrial partnership for service, maintenance, personnel training, and even localisation of Il-114-300 production in India,” said UAC chief executive Vadim Badekha.

According to aviation sector analysts, the Russian aerospace industry has had a chequered past with failed aircraft launches. The situation has worsened over the years due to lengthy production delays, shortages of various components, and financial pressures primarily stemming from Western sanctions.

The Russian aerospace and defence company UAC was sanctioned by the US in June 2022 — in the wake of Russia's invasion of Ukraine. Others that sanctioned it include the European Union, the UK, Canada, Switzerland, and Japan.

Although India has been politically opposed to unilateral sanctions, Indian companies have usually refrained from violating such sanctions, particularly when they are imposed by the US, due to the threat of secondary sanctions from Washington.

Last year, the UAC inked a memorandum of understanding with Hindustan Aeronautics Limited (HAL) to manufacture its SJ-100 regional jets in India. Negotiations to ink a formal licensing agreement for the SJ-100 are underway, it is learnt.

If the pact materialises, the aircraft could become the first passenger jet to be fully manufactured in India, which harbours the ambition to become an aerospace manufacturing hub. India has been pushing global aircraft manufacturers to set up final assembly lines (FALs) for passenger jets in the country, given India's status as the world's third-largest domestic aviation market and the fastest-growing major aviation market globally.

According to some industry watchers, there could be complications in manufacturing the SJ-100 aircraft in India even if secondary sanctions are not a risk factor. That is because of severe restrictions imposed by Western powers on Russia's aerospace manufacturing sector and the consequent supply chain issues affecting Russian manufacturers’ access to Western components.

Moscow’s aircraft manufacturers are developing planes with only Russian parts, but those projects are grappling with delays, as per reports from Russia.