Russian aviation design bureaux and manufacturers have been standing idle trying to survive in an unfriendly economic and legal environment, with the Russian government doing very little to alleviate industry agony. Russian aircraft manufacturers simply do not have sufficient funds or access to them to finance the development or production of new aircraft. There is little project financing available either to develop a new aircraft type or to buy one. The traditional system of buying an aircraft was that when one became available and the customer had the money available, the aircraft was bought and if money was not available there was no purchase. Banks consider Russian manufacturers to be a black hole because of their confusing business structure and inefficient Soviet-style management.
Russian manufacturers estimate that they can produce hundreds of aircraft a year.
Airlines in such markets are able to develop routes, brand and customer base and thereby maximise revenue stream using aircraft that represent an improvement on what has been available before even if it is not state of the art. The Russian government s attitude towards foreign investment in the industry is exemplified in a report on the Russian aircraft manufacturing industry issued by the Russian State Audit Chamber last year. The report stresses that the Russian aircraft manufacturing industry is in great distress and describes the results of the industry privatisation as painful . The state auditors are particularly concerned with foreigners acquiring shares in Russian companies producing aircraft and relevant equipment. The report says that giving nothing in return, foreigners have already gained access to new technologies, know-how and information and infiltrated the management of major defence enterprises.