Types and role of competition in Russia. Competition is the rivalry between participants in a market economy
Competition is an economic term. Derived from the Latin word “concurrentia”, which can be translated as “collision, running away”. The meaning of this term describes the process of struggle between market players for resources: territory of influence, low prices for raw materials, market share, exclusive delivery conditions, and others.
Competition as the engine of progress
Competition, according to economists, has a positive impact on the market situation as a whole. Thanks to constant struggle and rivalry, new technologies emerge that are the engines of scientific and technological progress. Competition influences the improvement of the quality of goods and services, helps to optimize price conditions for consumers and improve the level of customer service.
Karl Marx wrote in his writings that the struggle for resources is divided into two types: intra-industry and inter-industry competition. What is this?
Let's take a closer look at these types of competition. Intra-industry and inter-industry competition - what are the differences between them and the common features?
The concept of intra-industry competition
Intra-industry competition is rivalry between companies producing identical goods and services. Let's figure it out. What are the positive consequences of intra-industry competition?
In intra-industry competition, as a rule, small, medium, and more often large businesses compete. The exception is large companies, which account for between a third and half of the total market in a certain territory or industry. They do not participate in intra-industry competition as unnecessary, being monopolists capable of dictating conditions to the market.
Intra-industry competition contributes to the industry moving forward, technology development, and quality growth.
Types of intra-industry competition
Intra-industry competition is divided into two types: price and non-price.
Price competition is an attempt to gain consumer attention and increase market share by reducing the cost of goods and services. In principle, price competition is beneficial to consumers, but only up to a certain point. The fact is that initially, manufacturers reduce the cost of the product at the expense of profits, while maintaining quality and a customer-oriented approach. But if a so-called “price war” occurs in the industry, it is necessary to compete by reducing production costs. And things may come to a forced reduction in quality, due, for example, to the purchase of cheaper raw materials. Not to mention optimizing the costs of providing sales and service. In this case, competition disrupts the market, weakens participants, and makes consumers uncomfortable. Some companies that understand the situation and the laws of the market deliberately do not engage in competition if conditions of a price war arise and win this battle - without a fight.
Non-price intra-industry competition is the struggle for the buyer by changing the company's image, packaging, attitude towards customers - all factors of differentiation from competitors, except price. In the struggle for the attention and loyalty of consumers, companies invest significant funds in brand development, advertising, promotion of a product or service on the market, and marketing. This is effective, but leads to increased costs to attract each buyer. To break away from competitors, companies have to incur significant unproductive costs. In this regard, the net profit of each individual company is significantly reduced.
Examples of intra-industry competition
Intra-industry competition between Russia and the world can be illustrated in almost any sector of the economy: both material production (light and heavy industry) and socio-cultural sectors (education, medicine).
Intra-industry competition offers the following examples:
Production of dairy products: “Izbenka”, “Wimm-Bill-Dann”, “Danone”, “Permmoloko”.
Cargo transportation: “Business Lines”, LCMG, “Translogistic”, “PEK”, “Zheldoravtotrans”.
MBA education: Moscow State University. Lomonosov, RANEPA, VShB GUM, EMAS.
Inter-industry competition
Inter-industry competition, as a rule, arises when the possibilities of intra-industry competition are exhausted. In essence, this is a transition to related industries, diversification of business through the exploitation of a brand or the production of new products.
The object of the struggle in this type of competition is a higher rate of profit. What is the impact of inter-industry competition? The fact is that entrepreneurs are leaving low-profit niches and rushing into more profitable businesses. This process is accompanied by a decrease in supply in low-profit areas while maintaining demand - as a result, the rate of profit increases. In industries with high profits, on the contrary, an increase in supply leads to a decrease in profit margins and a fall in prices for goods and services.
There are two types of inter-industry competition: functional and capital flow.
Types of inter-industry competition
The flow of capital is intended to regulate the balance of the rate of profit in all industries. But in practice, this is prevented by certain factors, they are called barriers. Separate barriers to entry and barriers to exit. Barriers to entry include: licensing, expensive equipment, lack of the right to engage in another type of activity in the company’s constituent documents, expensive marketing and significant investments in advertising campaigns. Barriers to exit include resistance from trade unions, reputational risks, and production costs.
The higher the entry threshold, the lower the chances of changing the composition of market players. The flow of capital can be external and internal. External is the entry of a new company into the industry, internal is the diversification of business by one of the existing players.
Functional competition is the emergence of substitute products or services that compete with those currently existing in the industry and satisfy the needs of the industry's consumers by offering an alternative solution. The consumer himself chooses which drink to choose - tea or coffee, travel by bus or metro, send a letter by mail or courier. These are all examples of functional interindustry competition. Substitutes (as substitute products and services are called) intensify inter-industry competition, set the pace for the market, confuse strategic plans and force top managers to come up with new ways to develop their business.
15:12 — REGNUM Russia and China in the Asia-Pacific region have more common ground related to cooperation than competition. Russian President Vladimir Putin stated this at a press conference at the end of the APEC summit in Bali on October 8, answering a question about how partnership and competition with China are combined in this region, the Kremlin press service reported.
“Competition is the engine of progress in all areas: both in economics and in politics. Therefore, I see no contradictions or tragedies here, everything is normal, natural, this is how it should develop. In some ways there is competition, in others there is cooperation But today we have more common ground with China related to cooperation, and this cooperation goes in different directions. And I already said at the meeting with business circles, if we are talking about energy, then these are hydrocarbons, and different ones. oil and gas, perhaps in the future liquefied natural gas, this is electricity, this is nuclear energy. As you know, we have built two units at the Tianwan Nuclear Power Plant, the third and fourth units are next. But energy is far from it. everything we do. We solve issues related to cooperation in the field of aircraft manufacturing. The Chinese, of course, are primarily interested in heavy helicopters, and here we are, of course, one of the leaders in the world. There are probably no other such helicopters. does. There are some in the States, but I don’t think they’re even that heavy there, 20 tons each. We will modernize or make a completely new machine - they decide this at the level of specialists, experts,” he said.
Putin also noted good prospects in the field of space and aircraft manufacturing. “Of course, it’s difficult to break into the world market with wide-body aircraft, it’s very difficult, but we have such chances, both financial and technological capabilities, the market is huge both for us and for the Chinese. If we make a competitive, competitive aircraft, then it will enter its own market, it will already have good prospects,” the president emphasized.
According to him, there are other areas in the metallurgical industry, there are also good areas of cooperation in the field of transport and infrastructure development. “After all, some other routes connecting Asia and Europe already pass through us and through China and may pass through. And here we also need to decide with our partners in which direction,” Putin said.
“We have a lot of problems related to environmental protection, ecology. Cross-border cooperation in this sense is generally difficult to overestimate. Look what happened during heavy floods and inundations. But if some disasters occur related to man-made causes , then this affects both the territory of China and the territory of Russia. It is very important to establish relationships between the regions and between the relevant services. Today, all this interaction is at a very high level,” he concluded.
01.10.2011 SATURDAY 00:00
ABC of the GERMAN ECONOMY. PART 1
Question: What role does competition play in the development of production?
Answer: Competition leads to constant growth in production efficiency. It forces producers to avoid losses and cut costs in order to sell goods at lower prices than others. It forces those whose costs are high out of the market, leaving only low-cost producers in the market. Competition operates when there is an opportunity to choose among sellers and when there is freedom for new sellers to enter the market. Large and small firms can participate in competition. Competing firms may compete in local, regional, national, or even global markets. Competition is as important to a market economy as blood is to the human body.
Competition puts pressure on producers to operate efficiently and take into account consumer needs. It eliminates those participants who have proven their own inefficiency: firms that are unable to provide consumers with quality goods at competitive prices suffer losses and are gradually driven out of business. Successful competitors have to do better than their rival firms.
No one knows exactly what product consumers will want in the near future or what technology will help minimize unit costs. Only competition helps to find the answer to this question.
Entrepreneurs are free to choose new products or promising technologies - they only need the support of investors. In a market economy, approval from central planners, parliamentary majorities, or market competitors is not required. However, competition forces entrepreneurs and their supporting investors to be prudent; their ideas must stand the “reality test.” If consumers value an innovative idea so highly that it covers the costs of producing a product or service, then the prosperity and success of the new business is guaranteed, but if not, collapse is inevitable.
Consumers are the final judges of the success of innovation and the success of a business. Manufacturers who want to survive in a competitive environment cannot afford to be complacent. A product that succeeds today may not survive the competition tomorrow. To succeed in a competitive market, firms must be able to anticipate, recognize, and quickly implement valuable ideas.
Competition, as it were, “discovers” the type of organization and the size of the firm that minimizes unit production costs. IN Unlike other economic systems, a market economy does not predetermine or limit the types of firms that are allowed to compete. Any form of business organization is acceptable: a sole proprietorship, a partnership, a corporation, an employee-owned enterprise, a consumer cooperative, a commune, or anything else. In order to be successful, you need to pass only one test - on the efficiency of resource expenditure.
The same applies to firm size. For some products, the plant must be large enough to take full advantage of potential economies of scale. If unit costs fall as output increases, small firms will have higher costs and therefore charge higher prices for their products. Consumers interested in getting more value for the same money will tend to buy from larger firms, increasing their chances of survival. Most small firms will be gradually forced out of the market. The automobile and aircraft manufacturing industries can serve as illustrations of this development of production.
In other cases, small firms, often organized as sole proprietorships or partnerships, will be more effective. Where consumers place a high value on products and services that embody the individuality of the craftsman, large firms, unlike their smaller rivals, find it difficult to expect success in the competitive struggle. This happens, for example, in legal and medical practice, in the art trade, and in the hairdressing industry. Through market competition, costs and consumer demand will determine the optimal type and size of firm in each individual market.
In order for large companies to achieve low costs, it is very important that authorities do not restrict competition from foreign manufacturers and do not prevent their firms from selling goods abroad. For small countries this is doubly true. For example, the domestic market capacity of a country like South Korea is small, and Korean automakers would have extremely high unit costs if they were unable to sell cars abroad. And consumers in smaller countries would have to pay much higher prices for cars if they were prohibited from purchasing them from low-cost, large foreign companies.
In other words, competition drives self-interest and makes it work for the good of society. As Adam Smith noted in The Wealth of Nations, people are motivated by selfish motives: “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their consideration of their own interests. We appeal not to their humanity, but to their selfishness, and we tell them not at all about our needs, but about their benefits."
In a competitive environment, even the most greedy in their pursuit of profit are forced to serve the interests of others and provide consumers with benefits at least equivalent to what someone else can provide them. As paradoxical as it may seem, self-interest is the most powerful source of economic progress if it is guided by competition.
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Nikolai Fedorovich Nikitin was born on January 1, 1950 in the village of Orudevo, Dmitrovsky district, Moscow region, into the family of a military man. In 1973 he graduated from the Moscow Aviation Institute with a degree in aircraft mechanical engineer. From 1973 to 1997 he worked at the Sukhoi Design Bureau, where he rose from engineer to deputy general designer. In 1997-1999 - First Deputy General Director of AVPK "Sukhoi". In February 1999, by decree of the Government of the Russian Federation, he was appointed general director - general designer of the military-industrial complex "MAPO" (in December 1999, renamed RSK "MiG"). Laureate of the USSR State Prize in the field of science and technology, Honored Designer of the Russian Federation, Candidate of Economic Sciences.
Position
Nikolay Fedorovich, judging by the performances of your competitors, the first half of 2002 was not successful for RSK MiG. Representatives of the Sukhoi Design Bureau are actively discussing their victory in the tender for a fifth-generation fighter, but RSK does not comment. At the same time, representatives of the Yakovlev Design Bureau speak a lot in the press about winning the competition for a combat training aircraft. "MiG" is silent again. Why?
In the process of discussing the problems of the fifth generation fighter, the MiG Corporation actively defended its positions at all meetings and meetings. However, MiG strictly complied with the instructions of the management and the unspoken agreement not to comment in the press on the progress of these discussions and the results of the competition. As is clear from your question, the MiG corporation is the only one that has complied and is complying with these agreements.
The information noise around the fifth generation is very reminiscent of the situation with the restructuring of the aviation industry - numerous conversations and statements over the course of many years. These conversations continue now, taking up the time of ministers, deputy prime ministers, and state leaders, and integration has been implemented by a few enterprises, and note that they hardly appear in the press and high offices. They have no time, they work and complete assigned tasks.
Now I will allow myself to comment on the current situation. You say that we lost two competitions or, as they say in the West, tenders. But here’s an interesting situation. Over the past year, the MiG Corporation has concluded 5 contracts for the supply of aircraft equipment abroad and 4 contracts for the modernization of previously produced aircraft systems (3 of them in European countries). Thus, having won 9 tenders abroad, we “lost” in Russia. How many tenders abroad were won by the Sukhoi Design Bureau or the Yakovlev Design Bureau?
So it turns out that in the West, where, along with high tactical and technical characteristics, the main tender criterion has always been and remains the “cost-effectiveness” indicator, we win, but in Russia we lose. This means that other factors also influence our decision making. Life will show who was right, whose position and what will ultimately be realized.
Fifth generation
What is the essence of RSK's approach to the fifth generation problem, how does it differ from the proposals of the Sukhoi Design Bureau?
You asked the question correctly - MiG does not have a different project, MiG has a fundamentally different approach to the design of next-generation combat (and not only combat) equipment. We look at the problem through the prism of economics. She must "run the show."
The task is not only to draw on paper the most powerful and best combat aircraft in the world, “which has no analogues.” It must be built within a given time frame, the country must have the resources to produce it, and the Russian Air Force must be able to purchase it. In addition, the aircraft must be of interest to foreign customers, so that production is paid for not only by our domestic taxpayer, but also by foreign ones. And this is not a slogan - today MiG, being a state-owned enterprise, receives more than 99% of its funds only from external orders. Moreover, our payments to the state budget are tens of times greater than the receipts from it for the MiG.
We have expressed our position more than once. Speaking about the fifth generation fighter, the MiG corporation is based on three main principles. Firstly, the RSK should not and cannot stop in its development; our future, along with the ongoing diversification program, lies in the development of its combat component. Secondly, it is necessary to develop and manufacture a multifunctional combat aviation complex available to the Russian Armed Forces to solve the tasks of the Air Force and Navy. Finally, it is necessary to ensure the high export potential of the new fighter for its wide distribution throughout the world, as was the case with all MiG-developed aircraft.
Is it possible to analyze the economic aspects of the program in more detail?
The cost of the fifth-generation fighter program - I emphasize, the program, and not the development work (the share of the latter, as a rule, is no more than 10%) - is commensurate with the Russian defense budget. But besides aviation, there are other types of Armed Forces that must also be re-equipped with new equipment. Therefore, it is necessary to strictly link the prospects for the purchase of a new fighter with other programs of the Russian Ministry of Defense (Strategic Missile Forces, Navy, Ground Forces, other Air Force work, etc.), the implementation of which is planned for the period 2002-2020.
Linking the budgets of all programs into a single budget for technical re-equipment of the Ministry of Defense of the Russian Federation must adequately fit in with the projected economic development of Russia, the growth of the gross national product and realistic budget plans and forecasts for the next 20 years.
This will make it possible to approve the actual volumes of financing, procurement and implementation deadlines for technical re-equipment programs of the Russian Ministry of Defense and, in particular, the fifth-generation fighter program. Then, in accordance with the allocated amounts of funding, the Air Force specifications for the new fighter should be formed. And only after this should a decision be made on the full-scale deployment of the new fighter program and the identification of the lead developer.
And now we need to continue the competitive development of preliminary designs for a fifth-generation fighter at the expense of the own funds of FSUE RSK MiG and JSC Sukhoi Design Bureau. And budget money should be directed to the development of critical technologies, the development of weapons and avionics.
How much will the fifth generation program cost?
In accordance with public statements by a number of leaders, the planned cost of R&D for a Russian fifth-generation fighter in the period until 2010 will be about $1.5 billion (some experts estimate it much higher). These funds are not included in the budget of the Russian Ministry of Defense. I note that a similar American program, the F-35 (JSF), envisages development costs of about $22 billion.
Even if the Russian aviation industry finds funds for R&D (for example, from export deliveries of MiG-29 and Su-27/30 aircraft), then the determining and critical factor in the fifth generation fighter program will be the presence of 20-30 billion dollars in the budget of the Russian Federation for the formation of a minimum acceptable fighter groups. In other words, during 2010-2025, $1.3-2 billion per year should be allocated for the purchase at the minimum possible pace of new aircraft, their weapons and their operation.
What explains such a spread in price parameters?
Selected aircraft size. It is this that ultimately determines the cost of the program and the burden on the country’s budget during the period under review.
There is another aspect of the program - export. Currently, about 2,600 MiG-29, F-18, F-16, Mirage-2000 fighters, similar in size and weight to the aircraft offered by RSK MiG, have been delivered to more than 55 countries. At the same time, larger and heavier fighters Su-27/30, F-14, F-15 were sold to 8 countries in the amount of approximately 650 units.
Currently, it is planned to produce for export about 3,000 F-35 fighters (JSF), similar in size and weight to our aircraft, and there are no plans to export heavy F-22 fighters, larger in size and weight than the F-35 (JSF).
Thus, it is possible to reduce budget costs for the purchase of a group of new fighters for the Russian Air Force only by solving the other main task of the program - to ensure the high export potential of the aircraft being developed. This, in turn, will make it possible to compensate development costs at the expense of a foreign customer, ensure real foreign exchange earnings for the country, support hundreds of thousands of jobs in the high-tech sector of the economy for the period until 2030-2040, and ultimately maintain Russia’s position in the field of combat aviation.
The size of the new fighter chosen by FSUE RSK MiG in comparison with the project of a heavier aircraft will provide the opportunity to form the grouping necessary for the Russian Air Force with 35-40% lower costs for the budget of our country and will provide 3-4.5 times greater potential exports.
This is how we see the solution to the issue of a fifth-generation fighter: through the economics of the process and the “cost-effectiveness” criterion of the product.
Integration
You have been heading RSK MiG for four years. Have all the tasks you set for yourself been completed?
The MiG Corporation is a state-owned enterprise, and it was not me who formulated the tasks during my appointment in February 1999, and then during my reassignment in December 1999. They were given to me by the Prime Minister and the leaders who were and are responsible for the Russian military-industrial complex.
There were three such tasks. First, to unite all MiG enterprises into a single organization, that is, to create an optimal enterprise structure, according to which all successfully operating aircraft manufacturing companies in the world are built - Dassault, Lockheed Martin, Boeing. Secondly, to return MiG brand products to the industrial arena and the foreign market. Thirdly, to ensure long-term, stable and cost-effective employment of 14 thousand jobs, and taking into account subsidiaries - over 40 thousand jobs.
We have completed these tasks. By 2000, the merger of enterprises was completed, and RSK "MiG" is today the only aircraft manufacturing corporation in the country that unites de facto and de jure in one legal entity the entire life cycle of aircraft - development, production, sales, after-sales service, repair and modernization .
The new structure made it possible to work in the market more efficiently and, having the right to independent foreign economic activity, to pursue an active and aggressive marketing policy. At the same time, the new marketing policy of the MiG Corporation, developed jointly with federal authorities at the beginning of 2000 and constantly being improved, made it possible to radically restructure activities in the military-technical cooperation sphere and adopt a systematic approach, which ultimately yielded positive results.
Today it is possible to interest the buyer only with perfect, competitive technology. This forced us to create a new model range of aircraft: in just 11 months the MiG-29M2 (MRCA) was built, the MiG-29K/KUB is ready for serial production, and the MiG-29OVT with thrust vector control will begin testing.
In 2001-2002 we returned to the foreign market. At the same time, the MiG corporation not only returned to traditional ones, but also developed new regions. Contracts have been concluded with five new countries where our products were not previously supplied. The MiG returned to the countries of Eastern Europe. Moreover, the MiG corporation operates and has contracts in NATO countries. During 2001-2002, MiG won the competition with leading Western firms in Hungary, Bulgaria and Slovakia. The tenders held in these countries in 2001-2002 ended in our victory: contracts were signed to extend the service life and modernize fighter fleets. At the same time, in 2001, the geography of military-technical cooperation was expanded to 12 states, and in 2002 - to 17.
Of course, a significant event was Russia’s return to the European market, from which by the beginning of 1999 Western countries tried to completely oust Russian fighters. Until recently, the MiG Corporation has been fighting for the Austrian market, competing on equal terms with the giants of the world aircraft industry. Such persistence created conditions when Austria’s neighbors (Hungary, Bulgaria, Slovakia), despite active opposition from Western competitors, chose Russian MiGs.
Can you say that the corporation has completely overcome the crisis of 1997-1998?
Over the past period, in the absence of any orders from the Russian Ministry of Defense, the MiG Corporation has taken all possible steps to find funds to preserve the enterprise, preserve development and production areas, and not lose personnel. Over the past two years, the real portfolio of orders has grown 6 times and a stable base has begun to be created that will ensure the constant operation of MiG enterprises, including its subsidiaries, for at least five years. Thus, thanks to the restructuring carried out and the implementation of an offensive marketing policy over the past two years, for the first time in the last 6 years, our corporation has the prospect of not only retaining personnel in the scientific and production sector, but also completely solving the problem of financial and economic stability of the Distribution Company by 2004.
In 1995-1996, decisions were made to restructure not only MiG, but also Sukhoi, Tupolev and other enterprises. Why did MiG unite, while everyone else lagged behind in resolving this issue?
We analyzed the results of all previous activities of the enterprises that are part of the corporation. After all, the MiG association began in 1995 with the creation of the MAPO military-industrial complex. However, later processes of reintegration began, and by 1998, MiG virtually disintegrated again. Therefore, clear tasks were set to correct this situation, and deadlines for their implementation were determined. This allowed us to complete the first stage of the restructuring process by 2000, despite severe financial and personnel problems.
As for the other enterprises you named, this question should be addressed to them, and not to us. We can only repeat to ourselves that we were given a clear task: to dramatically improve economic, production and social indicators through optimal restructuring. And we solved it together with Rosaviakosmos, ministries and departments, but in no case shifting our problems onto them.
Diversification
Many companies that produced military equipment are entering the new field of civil aircraft construction. What are your plans in this area?
I would not say that the topic of civil aviation is new for the MiG Corporation. At serial factories, which today form the basis of serial production of RSK MiG (Moscow and Lukhovitsk branches), back in Soviet times, passenger aircraft that were widely known in our country and abroad were produced, for example, Il-12, Il-14, Il-18. The enterprises included in the corporation's propulsion unit also developed and produced engines not only for combat aircraft and helicopters, but also for civil aviation. And today our task, relying on existing experience, is to develop and improve the production of civil aviation equipment.
We conducted a comprehensive analysis of the structure of current and future sales of RSK MiG and identified a significant imbalance between the production capacity of the enterprise and the potential volume of orders for new MiG combat aircraft.
In such a situation, two main options are possible - either a radical reduction in production capacity, a significant part of the design bureau and mass layoffs of personnel, or an active search for new programs to load them with. We chose the second path. A version of the corporation's development strategy has been developed, focused on deep conversion. An analysis of the enterprise's future capacity showed that 20-30% of the existing capacity is sufficient to implement all military programs, and the remaining 70-80% should be reoriented to the production of civilian products.
Although the enterprises included in RSK MiG have participated in civilian projects in recent years, these were mainly programs for small-scale production of light aircraft, which are not able to seriously load the capacity of the factories and design bureau of RSK MiG. Today, the only really promising project in this area is the production of a four-seat business aircraft Il-103.
An analysis of production capacity and market research conducted showed that the optimal civil project for deployment at RSK MiG is a program for the production of a medium-sized civil aircraft. The choice was made on the 100-seat short-haul passenger aircraft of the new generation Tu-334.
What is the state of this project, and at which RGC enterprise will it be implemented?
Certification tests of the Tu-334 are currently being carried out, in which RSK MiG has invested large amounts of its own funds under an agreement with OJSC Tupolev. The main serial assembly will be carried out in Lukhovitsy, where we are now focusing the bulk of serial production. For this purpose, reconstruction of the final assembly areas is already underway. We will also assemble military equipment at the same facilities. Reconstruction is an integral part of the enterprise's fixed assets renewal program. No funds have been invested for these purposes for 20 years, and production is beginning to become morally and physically old and worn out.
According to the calculations of the corporation's specialists, the capacity of the new workshop will allow the production of more than 20 aircraft per year and by 2012 about 130 Tu-334 aircraft can be produced. To date, 20 Russian airlines, with which RSK MiG has entered into preliminary agreements, link their development with the operation of the Tu-334.
Another conversion project is the MiG-110 multifunctional cargo-passenger and transport aircraft. It is important for us primarily because it was developed by the designers of our Engineering Center "Mikoyan Design Bureau". The mock-up commission of the IAC Aviation Register has just completed its work on the cargo-passenger version of the MiG-110, which is a necessary step for certification of the aircraft. The commission highly appreciated the professionalism of our designers. In the corporation's budget for the current year, funds have been allocated, within the limits of available capabilities, to prepare for the production of this aircraft.
Preparations for serial production of the promising multifunctional Ka-60 helicopter are also underway.
What are the prospects for RSK in sport and small aviation?
Over the years, MiG aircraft set 72 world records for speed, altitude, rate of climb, and payload, including 9 absolute and 18 women's. Many of them have not been beaten to this day. Our test pilots are not only highly qualified professionals in their field - among them there are many excellent master pilots who have repeatedly delighted domestic and foreign audiences with their performances.
But our company did not develop purely sports aircraft. Nevertheless, RSK MiG produces sports aircraft from other design bureaus in serial production. In particular, the Su-29 and Su-31 aircraft of the general designer of the Sukhoi Design Bureau, Mikhail Simonov, are assembled at the Lukhovitsk department, work on which he began back in 1983. These machines have proven themselves well at world championships and are in demand in our country and abroad, and they are assembled entirely on a serial assembly line. In the design of these aircraft, composite materials are widely used, the production of which is carried out by the largest specialized workshop of our corporation in the Russian aviation industry.
The production department in Moscow mass-produces Aviatika aircraft, which belong to the ultralight class. These machines, in addition to their other capabilities, are also used for aerial acrobatics. The project is our joint program with the Moscow Aviation Institute, and on it students, working at the MAI Design Bureau, learn the basics of aircraft design. Its double and agricultural variants are currently undergoing certification.
We continue to work on light aircraft from various design bureaus that have good prospects in the general aviation market.
Does the corporation have any developments in business aircraft in its portfolio?
We are already producing the multi-purpose IL-103, designed for three passengers. This is the first Russian aircraft to receive a certificate from the US Federal Aviation Administration. It meets the requirements of IAC, AR FAA airworthiness standards, can be operated in any climatic conditions, and is characterized by a high level of comfort, efficiency and reliability. Today, Il-103s are already flying in the skies of Belarus, Peru, and Chile. In May of this year, RSK MiG signed a contract for the supply of 23 such machines to South Korea during 2002-2003. Three aircraft will be delivered to Laos in 2002.
How is the partnership between RSK MiG and Russian companies and Western corporations developing?
Indeed, today the world's largest aircraft manufacturing firms are uniting into international consortia. International cooperation has become the key to the successful implementation of many aviation technology projects. And the example of our corporation is the best confirmation of this.
We have a number of internal corporate programs in which the main production facilities, subsidiaries and dependent enterprises of our corporation actively participate. For example, the Lukhovitsky Aviation Production and Testing Complex is mastering serial production of the promising Ka-60 helicopter developed by Kamov OJSC, which is part of RSK MiG.
Our corporation cooperates with many domestic design bureaus in the serial production of aircraft of various classes, with manufacturers of engines, avionics, weapons, etc. In general, about 500 Russian enterprises are involved in cooperation with our enterprises in the construction of aircraft and helicopters.
The MiG Corporation is one of the few in the country that has many years of practical experience working with foreign partners within the framework of joint ventures for the joint operation and modernization of supplied aircraft equipment. Such interaction allows us to promote our products on the foreign market and strengthen customer confidence in the after-sales service system for the supplied aircraft. Our partners are the largest European concerns EADS and TALES, and the French company SNECMA. Significant experience has been accumulated in the work of the Russian-German enterprise MAPS. There are technical centers in Malaysia and India. A joint directorate for the MiG-AT program has been created with French companies.
This is the largest-scale project in the field of military-technical cooperation between our countries, which is constantly in the field of view of the leadership of Russia and France. We are creating a new generation training aircraft. For the first time in the world practice of creating such machines, a three-channel digital remote control system is installed on it. According to experts, the MiG-AT can capture 25% of the world market for training aircraft. There has already been interest in it in Algeria, India, and Greece.
At the international aerospace show "ILA-2002" in Berlin in May of this year and in July in Farnborough, RSK MiG presented a new flight simulator, created jointly with the German company STN-Atlas and simulating the cockpit of the MiG-29 combat fighter. Using this simulator, you can train pilots and practice using high-precision weapons from the air against ground targets. The STN-Atlas company is the main contractor for the construction of simulators for Eurofighter fighter aircraft and Eurocopter helicopters. In this program we present a real MiG-29 cockpit and algorithms for the operation of the weapons control system, and German partners are responsible for visualization tools based on laser technology, which is a breakthrough in aviation simulators. The flight simulator is part of the entire pilot training package and is manufactured to meet specific customer requirements. Based on the new simulator, it is planned to create MiG-29 pilot training centers for Eastern European countries. Such centers may appear in other regions, where MiG family aircraft were also delivered at one time. It is possible that the simulator will be sold to countries that can pay for the purchase (the cost can range from 4 to 12 million dollars depending on the customer’s requirements), such as India, Algeria, and Malaysia.
For the promising Tu-334 airliner, we are cooperating both with the developer, Tupolev OJSC, and with manufacturers of individual units. Cooperation between Russian and Ukrainian factories involved in the production of Tu-334 has been determined.
In September 2001, RSK MiG and Europe's largest aerospace concern EADS initialed a memorandum of cooperation within the framework of the Tu-334 program, according to which Western Europeans take on part of the functions of marketing the aircraft on the international market and certifying the Tu-334 according to European airworthiness standards .
Certification tests of this aircraft are carried out with the Russian D-436T1 engines installed on the Tu-334, which sufficiently meet the current ICAO requirements for noise and emissions. The engine has been created, certified, and has potential for development. In addition, it is possible to install other engines on the aircraft. Today, RSK MiG is actively searching for alternative options for installing engines on the Tu-334 that fully meet international standards. At the ILA-2002 aerospace show held in Berlin in May of this year, a memorandum of cooperation was signed between RSK MiG, JSC Tupolev and the German branch of the British company Rolls-Royce, and specific directions for further joint work were determined. If the result is positive, the first flight of the Tu-334 with the new BR-715 engines may take place in 2004. First, it is planned to supply finished engines, and in the future, Russian enterprises may take part in the production of individual units.
The topic of partnership is very broad. I have listed only some of our programs and projects.
You have grown professionally and established yourself at the Sukhoi company, which competes with RSK MiG in a number of positions. Does this cause any additional problems for the corporation?
I have been “sick” of aviation since childhood. My father is a military pilot, and I dreamed of being both a pilot and an airplane creator. The dream came true, however, I did not become a professional pilot, but since 1968 I have flown quite a lot and now I fly in a flying club, so I have great respect for people in this profession. The main business of life was the creation of aircraft.
I worked at Sukhoi Design Bureau for almost 25 years. I am very grateful to my friends and colleagues at the design bureau, where I learned a lot and where I was able to implement some of my plans. I still maintain excellent friendly relations with many of them. But always and everywhere, including now at the MiG Corporation, no matter how loud it may sound, we serve our aviation. Therefore, today at MiG such decisions are made that contribute to the development of the corporation, the development of the aviation industry, and serve the cause of all aviation and, ultimately, the cause of Russia.
By the way, about competition. It has always been competitive in the defense industry of our country, contributed to the development of aviation, and helped to master new ideas and technical solutions. If this competitive competition does not exist, if it turns into competition of “mutual destruction,” then this will be a disaster for our Russian aviation. Therefore, when they talk about the competitiveness of the leading design bureaus of Russia, it evokes only positive emotions. If the question is posed differently, then I have a negative attitude towards it.
If we recall history, at the first stage of the creation of 4th generation fighters there was also a competitive competition between the three leading design bureaus, which successfully ended in state tests. After which our country received, and then the whole world recognized, two excellent fighters - the MiG-29 and Su-27, although until 1983 it was not clear which aircraft would be put into service. The state and our aviation only benefited from this approach. It remains the most effective to this day.
