Russian public company United Aircraft Corporation (UAC), the consortium created in 2006 that regroups plane manufacturers such as Sukhoi, Tupolev, Irkut and Ilyushin, will be taken over by another state-owned conglomerate, Rostec. The move is to provide monetary boost for the country’s locally-made airliner MC-21.

The decree was signed on October 24, 2018, by Russian president Vladimir Putin. It states that 92.31% of UAC share will be transferred to Rostec by the next 18 months. “This is a consolidation of the country's key aviation assets, which will allow the state to focus its efforts to address the strategic challenges facing the industry,” said Rostec CEO Sergey Chemezov to Russian news agency Interfax. “As a result of the integration, [...] a national aviation association is being created - the largest in Russia“.

This operation is mainly aimed at helping aircraft manufacturers in the funding of their programs, according to Deputy Prime Minister in charge of defense, Yuri Borisov, quoted by Russian agencies. In a statement to the Russian media, he said that the integration of UAC would bring up to 120 billion rubles (about $1.8 billion) to Rostec by 2025.

Following the merger announcement, a Rostec spokesperson told Russian news agency TASS that a large investment would be made in the development of the MC-21. “With our accession to Rostec the United Aircraft Corporation assumes major commitments related with the financing and successful implementation of government programs and projects in aircraft building. First and foremost this concerns the medium haul plane MC-21. We will be prepared to invest more than 50 billion rubles [around $760 million] in it by 2025”.

The MC-21 is medium-haul plane capable of carrying between 132 and 211 passengers which is currently being developed by Irkut, and should compete with the Airbus A320 and the Boeing 737, a very prized market segment.

Rostec regroups 700 companies organized in 14 holdings: 11 of them in the defense sector, three on the civilian one. As for United Aircraft Corporation, it is composed of nine plane manufacturers, both for defense and commercial aviation markets.

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