OREANDA-NEWS. Mr Morozov briefed the President on the development of the aviation industry in Ulyanovsk Region.

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PRESIDENT OF RUSSIA VLADIMIR PUTIN: Good afternoon, Mr Morozov,

Last time I visited your region, you told me about the plans for the region’s leading sector, one that has always been its pride, namely aviation. We talked about Aviastar-SP [a Russian aircraft company based in Ulyanovsk]. Let's start with this.

GOVERNOR OF ULYANOVSK REGION SERGEI MOROZOV: Mr President, I would like to sincerely thank you for your significant support and the measures you are taking to support the aviation industry. In 2005, I came to see you after I was elected governor and reported that what was once the largest aviation industry in the Soviet Union was on the verge of collapse: only about 1,500 people were working in the sector.

Today, thanks to your support, we have a major contract for 39 aircraft, and I have the honour to report that together with United Aircraft Corporation we are implementing your instruction in full. We already have the first two aircraft undergoing tests. And the first three aircraft that, according to your instructions, we must deliver to the Defence Ministry and Emergencies Ministry in 2014, are already close to completion. Your instruction will be fully implemented; these aircraft will be delivered.

I am proud to say that another one of your instructions concerning the creation of a major aero composites factory is being implemented. The main construction works will be completed in the second quarter, and we have already bought the most up-to-date, innovative equipment.

In the third quarter, starting this summer, we will begin with installation and commissioning operations. And together with United Aircraft Corporation and management of AeroKompozit company, we would like to invite you to open this factory, the largest and most modern both in Russia and all of Europe, on Aviation Day [August 18]. We have toured many factories around the world – as a matter of fact there are very few of them – but ours will be the best.

VLADIMIR PUTIN: Good, let’s discuss this. Do you have other suggestions or requests relating to the factory’s development, or regarding its support?

SERGEI MOROZOV: Yes, Mr President, we have indeed repeatedly called on you to support us as we create an aviation cluster and make it operational. In Russia our cluster is among the top twenty-five, and you approved its inclusion in this list.

Today our cluster comprises not only Aviastar, but also a special economic aviation port zone that was created as per your instructions in 2009. We both remember well that the end of 2009 was not an easy time, but despite this you made the decision to allocate almost 1.5 billion rubles [ca. USD 47,000,000] for infrastructure development.

Today this special economic zone is in operation. We currently have five official residents who have completed the appropriate procedures, including via the Russian Federation’s Economic Development Ministry. And eleven more residents are ready to sign investment agreements in the near future.

We would like to address you (together with the Economic Ministry, with whom we are in agreement) on the issue of increasing the size of our special economic zone in order to implement a number of features that were not included in the original decision by the Russian Federation Government.

VLADIMIR PUTIN: What features?

SERGEI MOROZOV: First and foremost they are related to constructing aircraft, including regional ones.

VLADIMIR PUTIN: On this very site?

SERGEI MOROZOV: Yes, right there. We would like to engage not only in maintenance, transport and logistics, but also in the actual aircraft manufacturing. So we would like to see some of the features of the zones you have visited many times (technical innovation and industrial production zones) become the mainstay of our regional, industrial zone.

VLADIMIR PUTIN: I will give instructions to examine this; it certainly is possible. The only question is how it will look to other aircraft manufacturers. It's one thing to assemble and build planes using the concessions provided within these zones, and another to do so without them. Do we not put other manufacturers at a disadvantage?

SERGEI MOROZOV: Mr President, obviously we would not want to violate market rules. We simply want to appeal to you to support us in this, because today we don’t have regional aircraft.

VLADIMIR PUTIN: Not regional, rather local ones.

SERGEI MOROZOV: Commuter airliners having fourteen to twenty seats. Today we have at least two major manufacturers from abroad who would like to move here, not simply to relocate here, but also to transfer their technologies.

VLADIMIR PUTIN: So we are talking about local routes, commuter airliners.

SERGEI MOROZOV: Exactly.

VLADIMIR PUTIN: And what other concessions, preferences or additional permits do you want for these zones?

SERGEI MOROZOV: We have enough. We need permission to accelerate the implementation of the Government’s decision regarding the allocation of additional land.

We have received 120 hectares in accordance with Government decisions, and they have now been almost entirely populated by residents. We still have eleven residents who are ready to use parcels of land. Generally speaking, our exclusive economic zone totals 640 hectares.

VLADIMIR PUTIN: How many people work there now?

SERGEI MOROZOV: Almost 5,000.

VLADIMIR PUTIN: Good.