In 2004, Sukhoi Company met all targets in contracted export deliveries of combat aircraft channelled through Rosoboronexport. A total of 40 Su-marque planes were delivered for export and to Russia's Defence Ministry.
Su-27/Su-30 type fighters still remain a major item of Russia's arms export. In 2004, aircraft accounted for approximately 40% of total military exports, which amounted to about $5.6bn. Sukhoi's sales in the last year were 45bln roubles (over $1.5bn); the export share in the Company's total sales was about 95%; the share of non-defence products in the total sales was about 5%. As of end of year, the Company employed a total of 31,000+ people.
Between 1996 and 2003, Rosoboronexport FSUE made export contracts worth a total of $12bn+ for delivery of Su-marque combat aircraft and licensing their manufacture abroad. Malaysia will be the 30th country to receive Su- aeroplanes. About 250 Sukhois will be produced within the next few years abroad under a licence with the technical assistance and direct involvement of Sukhoi Company. In 2002-2004, customers received about 140 Su- aircraft (taking into account upgraded machines for the Air Forces of Russia).
The Company has been enjoying higher profit margins from direct deliveries of spare parts and maintenance of the aeroplanes delivered previously. In 2003, the sales of services fetched $15m. In 2004, the Company discharged contracts worth a total of $135m, and in 2005, the sales of services are expected to exceed $150m. In 2004, the licence mentioned above brought in about 10 direct export contracts (Algeria, Belarus, China, India, Kazakhstan). Sukhoi plans to claim a minimum of 80% of the market in spare parts for Su- marque aircraft delivered previously. This market is expected to be worth $1bn in the next few years.
Over the recent years Sukhoi has emerged as the leader of Russian aircraft building and has strengthened its position in the global market as well. The ratings of 100 leading defence contractors, compiled by the Defense News daily, shows the Company placed 28th. According to experts, the Company currently accounts for 14% of the global output of aircraft products, its share expected to rise to 16% by 2015. Sukhoi's exports account for 25% of the global market in combat aircraft, including licensed and joint production.
In 2004, the Company completed stage 1 of the governmental testing of Su-27SM aircraft, as well as the preliminary stage of testing of upgraded inventory Su-24M2 and Su-25SM planes. Work has begun to modify the aircraft at KnAAPO and NAPO production plants and aircraft repair plants. First stage testing has been completed on the frontline multi-role strike aircraft of the Su-34 type. The Customer's acceptance committee has approved conceptual design of a 5th-generation fighter. December 2004 witnessed a three-year contract made for delivery of aircraft to the Air Forces of Russia; the contract provides for the Company to hand over to the Armed Forces the first regiment of upgraded Su-27SM aircraft by 2006.
The next decade is expected to see Sukhoi keeping the annual exports of combat aircraft at $1.5bn. Exports of civil aircraft, such as new regional aircraft (RRJ Project), will account in addition for about $1bn annually in future years. At the 2004 Farnborough Air Show, the Siberia airline, Russia's leading domestic carrier, signed a firm-order agreement for 50 new RRJ jet airliners worth about $1bn. The manufacturing of the first planes is scheduled for early 2005, with deliveries to the Customer to start in 2007. The UTair Company announced its intention to purchase up to 20 RRJ-series aeroplanes. There has been a strategic partnership memorandum signed with Russian Post FSUE, providing for development and production of dedicated postal cargo aircraft in the interests of the Russian Post.
Negotiations with potential customers, including foreign parties, are still in progress, centring on Be-103, An-38 and Su-80 aircraft produced at the Komsomolsk and Novosibirsk plants, which are members of the Company.
