Bombardier and Rostec establish a joint venture

The state-owned corporation Rostec and the world’s biggest aircraft manufacturer, Bombardier, signed a memorandum at the MAKS-2013 airshow to establish a joint venture to assemble the short-haul Q400 aircraft in Russia. Experts estimate the demand for the plane in Russia and the CIS at 250 units by 2030. Rostec is planning to launch assembly in 18 months.

The state-owned corporation Rostec and the world’s biggest aircraft manufacturer, Bombardier, signed a memorandum at the MAKS-2013 airshow to establish a joint venture to assemble the short-haul Q400 aircraft in Russia. Experts estimate the demand for the plane in Russia and the CIS at 250 units by 2030. Rostec is planning to launch assembly in 18 months.

Rostec and Bombardier will contribute to the joint venture on a parity basis. Investment in the project is estimated at around $100 million. The Russian state-owned corporation will build a manufacturing plant at the Ulyanovsk Port Special Economic Zone in 2014, while Bombardier will contribute all the required intangible assets, including production technology, design documentation, intellectual property rights and know-how.

In the initial stages, assembly is to be performed at Bombardier’s home plant, while the Ulyanovsk facility will only customize the planes for specific clients’ needs. Localization in Russia is scheduled to begin in 2015. The plant’s design capacity will be 24 aircraft per year.

The project’s implementation will open up a new business area of short-haul and regional aviation in Russia. The country lacks full-fledged competence in manufacturing regional aircraft, as well as any full-cycle facility capable of designing and manufacturing such aircraft.

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