Russia's struggle to build commercial jets reflects deeper industrial malaise

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By Gleb Stolyarov and Alexander Marrow Russian aircraft makers have delivered only one of 15 planned commercial jets this year, data from Swiss aviation intelligence provider ch-aviation shows, as sanctions on foreign components stall production and high interest rates crimp investment.Since Russia's February 2022 invasion of Ukraine, Western sanctions have cut off access to foreign-made aircraft and spare parts. With a fleet of more than 700 planes dominated by Airbus EURONEXT:AIR and Boeing NYSE:BA jets, Russian airlines now rely on complex, indirect import routes to source critical components."There is no component base, no technology, no production facilities, no engineers," said one Russian aviation industry source, who declined to be named due to the sensitivity of the matter. "To create all this from scratch takes years, if not decades." Given Russia's geographical challenges as the world's largest country, it depends on commercial aircraft for domestic freight and passenger transport across its 11 time zones.Recent major incidents highlight an urgent need to prevent the fleet degrading. In late July, a Soviet-era Antonov An-24, built in 1976, crashed in the country's far east, killing all 48 people on board. Days later, flag carrier Aeroflot RUS:AFLT grounded dozens of flights following a crippling cyberattack. The aviation sector's struggles to become self-sufficient are part of a broader industrial slowdown. Russia's factory output contracted at its fastest pace since March 2022 in July, according to Purchasing Managers' Index data, and industrial growth continues to decelerate.High interest rates have played a part in dwindling car production, coal sector bankruptcies, slowing export volumes of commodities like metals and oil products, as well as the missed plane-building targets, officials and businesses have said, contributing to slowing economic growth. "Industry is being hit faster and harder by tight monetary policy," said Dmitry Polevoy, head of investment at Astra Asset Management, warning that the industrial sector was on the brink of recession. PRODUCTION DELAYS AND NEW TARGETS In 2021, Russia added 52 new commercial aircraft to its fleet — including 27 from Airbus, three from Boeing, and 22 Sukhoi Superjets built with imported parts - for airlines including Aeroflot, S7, Red Wings, Rossiya, and Ural Airlines, data from ch-aviation sho...

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