Ukraine To Choose Between Airbus and Boeing  At the beginning of 1996 the Ukrainian civil fleet inventory consisted of 306 passenger airliners, freighters and commuters. Those were in service with 101 operators, including 37 independent (non-state) companies. The airliner fleet includes 9 Il-62M transcontinental, 28 Tu-154 middle-range, 22 Tu-134 and 28 Yak-42 short-range airliners. Soviet designs are supplemented by three hired Boeing-737s. Commuters are represented by 30 Yak-40 jets, 64 An-24 and 76 LET L-410 turboprops. Cargo is transported in 8 Il-76s, 18 An-26s and 3 An-32s. In addition to the aircraft listed above, the Kiev-based Antonov design bureau runs its own fleet of five An-124-100 Ruslan, three An-22 Anteis and three An-12 airlifters, using them quite successfully on the international market for bulk cargo conveyance. Since 1991 Ukrainian operators have purchased only seven new aircraft - three An-32s and four Yak-42s. Seven Il-62Ms and eight An-24s have been also acquired during this period, but those are second-hand aircraft from Poland. The deep economic crisis in the Ukraine has resulted in a very low readiness of the civil fleet. According to Aviabusiness magazine, at the beginning of 1996 the share of air worthy aircraft was as follows: Boeing-737 100%, Il-62 55%, Il-76 50%, Tu-154 70%, Tu-134 66%, Yak-42 86%, Yak-40 86%, An-24 64%, An-26 77%, An-32 33%, L-410 15%. Most of grounded passenger airliners have fallen prays to their ages - the average figure of lifetime remaining is 44% for Il-62s, 24% for Tu-154Bs, 22% for Tu-134s, 25% for An-24s, and 15% for Yak-40s. The newest aircraft in the Ukrainian inventory are Yak-42s, which spent only 30 % of their assigned lifetimes.
National Flag CarrierIn 1995, Ukrainian Airlines, the national flag-carrier, transported 1,272,000 passengers and about 15,000 t of cargo. That year the company's pilots logged 82,000 hours in 30,000 flights. Most of the 200 aircraft in Ukrainian Airlines' inventory need replacing - the fleet has already flown 70% of its assigned lifetime. The company estimates that three-fifths of its fleet will have been written off by the year 2,000.
Acquiring Tu-154Ms is seen by Ukrainian Airlines as a necessary move to prevent losing the local market to other operators in the near future. The 164-seat Tu-154M, however, is somewhat oversized for domestic routes and, therefore, will be obained in small quantities just to bridge the gap between now and the time the 52-seat An-140, a new fuel-frugal propeller-driven commuter from Antonov, becomes operational. It is expected that the latter aircraft will replace majority of Ukrainian An-24s and Yak-40s.
International RoutesIn the first half of 1996, Ukrainian Airlines carried 196,600 passengers on international flights, which is 15% more than in the same period of 1995. The operator says it has 13 offices abroad and that its aircraft perform 62 international flights weekly on 26 routes. Popularity of Soviet-built aircraft, which are far less passenger-friendly than their Western counterparts, has become low, which makes their operators keep ticket fares down. This, in combination with a high fuel burn rate, results in non-profitability of international flights.According to Victor Reznik, chief of the Ukrainian Air Register, the Ukraine was the first CIS country to accept Boeing aircraft. It happened in mid-1992, when International Ukrainian Airlines decided to hire two CFM-56-3C-powered Boeing 737-400s. In 1993, after obtaining Ukrainian certificates, they began flights to Western Europe. Now the operator has three 737s, each making two or three flights daily. Using Boeing aircraft helped Ukrainian air companies realise that using modern aircraft is a reliable way to success. Vyacheslav Ilyin, former president of Ukrainian Airlines, said: "Hopes to get high revenues without using Western aircraft are an illusion because airliners of Soviet origin consume too much fuel. For instance, Il-62 flights to the US are non-profitable even when the airplanes are fully laden." He added that the company had to cancelled flights from Kiev to the Maldives and Washington due to their non-profitability. At present, Ukrainian Airlines conducts two flights to North America: Kiev-New York and Kiev - Toronto. However, those may soon be lost due to the US Government's decision to implement a noise ban on the Il-62M flights in April 1997. Realizing the significance of direct links with North America, the Ukrainian Government has promised to support Ukrainian Airlines in its fleet renewal programs.
What Will Take The IL-62's Place?Theoretically, the government could grant state support to the Antonov An-218 program initiated several years ago. The projected 300-seat wide-body airliner, powered with two D-18TMs, has a maximum range of 8,500 km, which is enough to reach New York from Kiev with a stop-over in Shannon. The government, however, opted for foreign aircraft. It is interesting to note that procurement of the Ilyushin Il-96 has never been seriously considered by the Ukrainians, partly because of well-known problems with its faulty PS-90 engines, and partly because the aircraft is unavailable under leasing agreements. At first Ukrainian Airlines came to Boeing, which responded with an offer of its 767-200ER model.
Boeing 767 Fits Better Initial contacts between Ukrainian Airlines and Boeing on the 767-200ER started four years ago. At first the sale of a couple of 767s to the Ukrainians looked inevitable. In many respects the American aircraft is the best candidate to replace the Il-62M - its fuel consumption is at least twofold lower, whereas range and passenger capacity are slightly higher (10,500 km and 216 seats against the Il's 10,000 km and 162 seats). The plane was among the first Western types to get certificated and operational in neighboring Russia. According to Victor Reznik, the plane will soon pass its certification in the Ukraine.
The long talks between Boeing and Ukrainian Airlines have not led to an agreement yet. According to K. Zolotusky, director for European sales at Boeing, the major cause for that has been Ukrainian Airlines' intention to take aircraft under operational leasing. "Boeing does not offer its aircraft for lease," he said. However, after Airbus offered the Ukrainians its A-310-300, the American company changed its position. "We can find a company which would agree to lease a Boeing-767 to Ukrainian Airlines for two or three years," Zolotusky said. In Spring 1996, Vyacheslav Ilyin, then-president of Ukrainian Airlines, announced his company's intention to form a Ukrainian-American joint venture that would undertake operating two 767s on routes from Kiev to Washington and Los Angeles and from Kiev to Miami. Afraid to lose the fight, Airbus Industries came up with new proposals, trying to attract the cash-stripped Ukrainians by promising long-term credits on favorable terms. In his turn, Zolotusky gave interviews to several Ukrainian publications. In one of those he said, "The A-310-300 is unable to reach New York from Kiev. Airbus offers to install additional tanks in place of the baggage compartment and some passenger seats. Alternatively, they offered to make a stop-over in Shannon. In practice it would mean a low attractiveness of flights to the USA for passengers. Now, with the Il-62, Ukrainian Airlines has one major advantage over competitors, namely non-stop flights. Airbus offers to buy the A-330-200, which will be available in 1998 at the earliest. Who need such a big plane? The best choice for Ukrainian Airlines now is the Boeing 767."
Airbus Industrie Offers A BargainClose talks between Ukrainian Airlines and Airbus Industrie began at ILA-96 in Berlin, where Vyacheslav Ilyin was allowed to fly the new European airliners. Then, in late August, a high-ranking delegation from France followed with a visit to Kiev, during which the Ukrainians were shown the A319. Being in rapture about the plane, Ukrainian Airlines agreed to prepare a letter of intent on leasing several A320 airliners beginning in April 1997. Apart from the A320 to be used on European routes, Airbus Industrie has offered the Ukrainians to lease two A310-300s. Those would be used on routes to the US and Canada for awhile before being replaced by two brand-new A-330-200s. However, the A310-300 is "short-legged" for nonstop flights to America - with a load of 21 t it has a range of 9,400 km instead of the 767-200ER's 11,900 km. The A330-200, whose fuselage is 5.3 m shorter than that of the A330-300, will be able to transport 256 passengers 11,800 km. According to the manufacturer, the new plane will have its operational expenses reduced by 25% in comparison with the 767. At the same time, the A330-200 is bigger than the 767-200ER, with a take-off weight of 230 t against 180 t. In terms of passenger capacity, the A330-200 considerably surpasses the current Il-62M, but, predicting a rise in air traffic between the US and Ukraine in the future, Ukrainian specialists consider this an advantage. While from the technical point of view the Boeing's proposal looks better, it is undoubtedly less attractive in terms of money. Airbus Industrie offers a 10 year deal involving leasing of two A-310-300s -- A-330-200s from 1999 -- and two A-320s, together with low-interest credits. According to Ukrainian specialists, the credits offered in fact represent a long-term investment into the Ukrainian economy worth US $60 million. Taking account the bad economic situation in the country, the latter factor may well be a decisive one.
Fight Continues, Results Are Known AlreadyAt the moment it is difficult to predict which of the manufacturers will win. It is known, though, that Ukrainian Airlines prefers the Airbus Industry's offer, whereas the State Air Transport Department favors Boeing's. To be accurate, I should have written "Ukrainian Airlines preferred" - on 26 November Ukrainian President Leonid Kuchma fired Vyacheslav Ilyin, the president of Ukrainian Airlines, and Valery Tsibukh, the first deputy minister of transport, from their positions. According to the Ukrainian mass media, this move was, at least in part, caused by an undercover fight between supporters of the two aircraft manufacturers.Regardless of which company wins the contract, Ukrainian Airlines will benefit from it. Firstly, the Ukrainian Government says it is ready to provide state guarantees for the deal, which in fact means more state support to the airline. Secondly, using modern economical aircraft on currently nonprofitable flights to North America will enable Ukrainian Airlines to have a stable income in the hard currency. | |
The oldest types in service are the Tu-134 and An-24, planned to be replaced by Western aircraft taken in leasing, either the Boeing 737-300 or Airbus A-320. Comparative analysis shows that one Boeing-737 can replace two Tupolevs due to lower fuel consumption and better turnover capabilities. However, the acute hard currency shortage in the country makes it difficult for the operator to find financing for deals with foreign manufacturers. Understanding that the search for a hard currency provider might take a very long time, Ukrainian Airlines also plans to buy or hire four Tu-154Ms, which are considered the most profitable among airliners easily available for "soft currency".
