A Thousand Jets Recounted: The Audit That Rewrote Russia's Civil Aviation Programme

Industrial programmes rarely die loudly. In Russia's civil aviation sector, the summer of 2024 became the moment when the flagship plan — the Comprehensive Programme for the Development of the Aviation Industry, known by its Russian acronym KPGA and written out through 2030 — quietly began to be recounted. On 9 August 2024 Kommersant reported that consultants from Sberbank and Gazprom Neft, who had spent the spring auditing the plants of the United Aircraft Corporation (UAC) on a government commission, had reached a stark conclusion: there is no "economically justified demand" for the roughly one thousand new Russian airliners the programme promised to build by the end of the decade. The inspection also exposed risks of further schedule slippage and rising production costs that could require even heavier subsidisation. According to the newspaper's industry sources, the findings were to be debated at a closed meeting chaired by Prime Minister Mikhail Mishustin, and the aviation industry may now be told to work on price control and, jointly with the Transport Ministry, to estimate the volume of deliveries the country genuinely needs.

This is not a story about a single factory missing a quota. It is a story about how a state-led corporate strategy, assembled in the shock of 2022 around a single assumption — that a thousand aircraft could be planned into existence — collided over two years with the arithmetic of demand, the physics of weight, the price of engines and the loading of machine tools. By the late summer of 2024 every one of those constraints had surfaced in documents seen by journalists, and together they form the clearest available picture of what Russia's aircraft industry can and cannot deliver in the second half of the decade.

The programme as it was written in 2022

The KPGA was drafted by the Transport Ministry with the participation of the Industry and Trade Ministry and approved by the government in June 2022, weeks after Western suppliers cut off the Russian civil aviation sector. Deliveries of new jets were supposed to begin as early as 2023. In January 2023 the cabinet endorsed an investment passport "aimed at fulfilling the KPGA", which sized the domestic and export market through 2040 at about 1,800 aircraft, including 342 SJ-series regional jets and 990 MS-21-310 narrowbodies. The capital expenditure envelope was put at one trillion rubles, assembled from four streams:

1. 284 billion rubles from the National Wealth Fund;
2. 381 billion rubles in bank lending;
3. 123 billion rubles of the investment project participants' own money;
4. 215 billion rubles of direct budget allocations.

The programme's logic was substitution on a deadline. The foreign-built fleet serving Russian airlines — 738 aircraft of all types in 2022 — was projected to shrink to 319 jets by 2030, with retirements accelerating from 2026, and the gap was to be filled by four new or restarted lines: the SJ-100, the import-substituted reincarnation of the Sukhoi Superjet with domestic engines and mostly domestic systems; the MS-21 medium-haul flagship; the Il-114-300 turboprop; and the Tu-214, a revived Soviet-era narrowbody. In May 2024, before any audit was completed, the Industry and Trade Ministry had already corrected the planned output from about 1,080 aircraft down to 994 and shifted the start of deliveries to 2025. The spring adjustment moved the delivery clocks of individual types one to three years to the right, and the autumn was to bring a far more fundamental question: whether the numbers themselves made economic sense.

What the auditors found

The consultants from Sberbank and Gazprom Neft were invited in after Rostec, the state corporation that manages UAC, and the Industry and Trade Ministry admitted in early 2024 that delivery deadlines had moved. Their field work covered the plants building the SJ-100, MS-21, Il-114 and Tu-214, and the final report was due on 9 August. Its preliminary conclusions, described to Kommersant by anonymous industry sources, amount to an indictment of the programme's central premise. In the auditors' formulation, "an imbalance in volumes and aircraft types has formed between the demand for air transport and production under the KPGA, and it does not correspond to commercial demand". Where the programme scheduled output of 140 to 270 aircraft a year, the auditors assessed real need at 50 to 60 jets annually — a gap of roughly a factor of three at the mid-point of the plan.

The mismatch is not only quantitative. The auditors found the demand structure heavily skewed toward the MS-21, warned that interest in the Tu-214 would be limited in time, and noted that the SJ-100 had landed in surplus after Aeroflot walked away from it. In June 2024 Aeroflot chief executive Sergei Aleksandrovsky said the flag carrier intended to drop orders for 89 SJ-100s and 40 Tu-214s in favour of more MS-21s — a decision that single-handedly hollowed out the order book of the regional jet programme.

The arithmetic of the existing fleet

Interestingly, the auditors initially recorded a deficit of MS-21 capacity. UAC, in its formal response, argued the opposite: airlines hold enough reserve in their current foreign-built fleets to maintain traffic simply by extending flight hours. The corporation's estimate — roughly 880 aircraft in service today can carry at least 113 million passengers a year — maps almost exactly onto the KPGA's own baseline forecast, which expects passenger traffic to stay around that level until 2028–2029. The uncomfortable synthesis, as one source familiar with the discussion put it, is that planned production volumes become redundant even before 2030: the industry would be building aircraft faster than the market can absorb them, years before the foreign fleet's retirement curve bites.

How the order book was counted

Where, then, did the thousand-aircraft plan come from? According to industry sources, the quantities were compiled from Transport Ministry surveys of the airlines themselves. The most recent such poll produced the figure of 1,800 aircraft through 2035: more than 400 MS-21s for Aeroflot; 116 SJ-100s and 204 MS-21s for Red Wings, the Rostec-affiliated regional carrier; and 125 MS-21s plus 25 SJ-100s for S7. One Kommersant interlocutor openly questioned the relevance of what he called a "social survey" for the real fleet plans of companies that would have to find the money. Rostec's own experts, preparing materials for the auditors, calculated that the polled fleet would suffice to carry from 270 million passengers a year — more than double the traffic Russia's airlines were actually flying and far above anything the programme's baseline forecast contemplated.

The export question

With domestic demand looking overestimated, the programme's second pillar — exports — came under the same scrutiny, and fared no better. During the audit the consultants had valued potential MS-21 exports at 150 to 300 aircraft a year across Asia, the Commonwealth of Independent States, Iran, Turkey and the United Arab Emirates. Kommersant's sources consider those estimates unrealistic; in their reading, the MS-21 will be wanted only by a narrow list of smaller friendly states, and even there the story is one of single deliveries rather than fleets. As for the SJ-100, one source was blunt: no niche is visible at all. The aircraft "will not be provided with demand abroad, and its relevance in Russia is questionable", he said, noting that jets of the 100-seat class account for less than 5% of the global market.

Oleg Panteleev, executive director of the Aviaport consultancy, offers the most developed dissent. If Aeroflot truly abandons the SJ-100, he concedes, the project's prospects will have to be discussed far more soberly. But he rejects the verdict of uselessness: the aircraft has become the most popular Russian civil jet designed in the post-Soviet period and does real work on regional routes. Around 160 non-import-substituted SSJ 100s remain in service, their foreign component supply shut off, and those airframes will gradually have to be replaced by the import-substituted SJ-100. The money for production preparation, certification and new components, Panteleev stresses, has already been spent. Most of Kommersant's industry sources, notably, do not expect any aircraft type to be cancelled outright in the coming years; they expect something subtler — intensifying competition for funding between programmes, both for development money and for the subsequent subsidies on purchase and operation.

The price of import substitution

The audit's second block of findings concerns cost, and the numbers explain why the demand question became existential. By the producers' own 2023 break-even calculations, the first serial SJ-100s will cost about 5.4 billion rubles each by 2027 — some 63 million US dollars at the central bank rate — while the MS-21 will cost nearly 9 billion rubles, or about 103 million dollars. The government's directive prices, set in early 2023 for Aeroflot's aircraft, stand at up to 2.4 billion rubles for the SJ-100 and up to 3.2 billion for the MS-21, since revised to an estimated 3.6 billion. The difference between cost and directive price is covered to the manufacturer from the budget — meaning that every aircraft delivered is, in effect, a fiscal transfer wrapped in aluminium.

For context, the directive price is creeping toward what the last non-import-substituted SSJ 100s cost in 2020–2021 money — 30 to 35 million dollars — and toward the prices of foreign rivals: the Embraer 190-E2, the SJ-100's closest competitor, sells for around 40 million dollars, while the Airbus A320 and Boeing 737 families that shadow the MS-21 change hands at 45 to 50 million. A Russian airliner built for a captive market, in other words, is set to cost its state customer more than the Western jets it is meant to replace — before any subsidy logic is applied.

Engines get swapped, prices get doubled

The clearest single driver is propulsion. The import-substituted MS-21 grew expensive because the American Pratt & Whitney (Pratt & Whitney) engines of the original design, which cost 800–900 million rubles before sanctions, had to be replaced by the domestic PD-14 at nearly 1.8 billion rubles — a swap made under export-control pressure from the United States that roughly doubled the powerplant's contribution to airframe cost. On the regional jet the pattern repeats: the Russian-French SaM146, built by the joint venture of Russia and France and valued at 600–700 million rubles, gives way to the domestic PD-8 at around one billion rubles. Engine localisation, the audit shows, is not merely an engineering achievement; it is a cost multiplier applied to every subsequent airframe.

The components spiral

Beyond engines sits the purchased-components chain, and this is where the auditors' risk estimates become genuinely alarming. Of the 8.9 billion rubles in the MS-21's cost, almost 6 billion is bought-in parts. Rising component prices and payroll costs led the auditors to flag the following cascade of risks:

• a 30% increase in the cost of the first MS-21s, to as much as 11.5 billion rubles per jet;
• a widening of the gap to the directive price from 5.3 billion to 8 billion rubles per aircraft;
• an extra 4 trillion rubles of budget compensation needed to cover costs on the MS-21 project alone;
• a total programme cost — with operating expenditure — of about 18 trillion rubles for the 1,800 aircraft planned through 2040, of which roughly 10 trillion would be budget subsidy;
• undefined terms and unknown cost of airworthiness support, which the producers have not yet priced but which will determine the compensation needed for operation.

The auditors also saw the risk of cash gaps along the entire cooperation chain; one source put the gap at 95 billion rubles without specifying the period or the number of programmes covered. When producers' outlays are not covered by advances, they fall back on credits and own funds, which in turn can delay component purchases and push aircraft deliveries further right — a self-reinforcing loop between the cost problem and the schedule problem. To break it, according to sources, officials are discussing either raising directive prices or engineering new subsidy schemes.

How to respond: price discipline and take-or-pay

Work on bringing costs down has already begun inside a Rostec working group, an industry source says. The levers are familiar: long-term contracts and a return to fixed prices, the way suppliers worked before 2022, plus the classic economies of scale as volumes grow. Panteleev points to a workable precedent — the Tu-204SM programme, for which suppliers were pressed on cost and brought into long contracts at Aviastar-SP in Ulyanovsk between 2010 and 2015. "Everyone was successfully tamped down on supply cost, long contracts were discussed and a compromise was reached," he recalls. His caveat is realistic rather than defeatist: under inflation and unpredictable materials and energy prices, cost will rise and the release price will have to rise with it. Containment is possible only if component makers can see their loading years ahead — and Panteleev's ideal scenario is a take-or-pay mechanism covering at least a third of the future fleet, converting the state's demand promise into suppliers' bankable certainty.

A new strategy, not a correction

The most consequential recommendation in the audit trail is procedural. Sources say the Transport Ministry, with UAC and the airlines, has been proposed to develop a new target model of passenger transport — an optimal route network matched to aircraft types, built on realistic traffic figures and economically justified orders that reflect the changed realities of two sanctions years. In its current form, one source argued, the KPGA "drawn in the haste of 2022" reflects neither what industry can build nor what airlines and passengers need, and the earlier bet on exports is premature. Some sources go further: the outcome may be not a corrected programme but an entirely new strategy document.

Andrei Kramarenko, senior research fellow at the Higher School of Economics' Institute of Transport Economics, agrees that the 2022 volumes looked over-optimistic from the start, and he prefers a new document to patching the old one, which in his words has aged and no longer accounts for changed realities. His deeper point is methodological: a credible strategy should be built not on planned output but on modelling population mobility, covering trunk, regional and local routes rather than a single annual passenger tally. If new domestic jets and the retirement of the foreign fleet fall out of synchronisation, Kramarenko warns, Russia will face a capacity deficit and carriers will begin abandoning low-margin routes; the new document should pre-empt that with subsidies and with pools of slots on lucrative international services tied to the operation of socially necessary low-margin ones.

Fyodor Borisov, head of the analytical centre of the State Research Institute of Civil Aviation, confirms the need for a fresh assessment of real transport demand, matched against the industry's actual capabilities, with a worked-out mechanism for compensating the delta between the two. Asked what should fill the fleet gap in the interim — cabotage, that is, letting foreign carriers fly domestic Russian routes, or purchases of foreign aircraft from the secondary market — Borisov calls the second scenario the more optimal, while conceding each option has advantages and drawbacks.

Range, production rate and the defence burden

Even a perfectly sized programme would still face engineering reality, and the audit materials describe it in unflinching numbers. Calculating realistic demand is extremely hard while airlines have not been given approved performance specifications, sources warn. One of them knows that the range of the first-series MS-21, as accounted for by the auditors, will be limited to about 2,300 kilometres because of the aircraft's empty weight and elevated fuel burn — the well-documented consequence of replacing composite and alloy parts with heavier domestic equivalents. That radius covers nearly 70% of Russian routes; once flight-test weight reductions lift the restriction, range should grow to 3,800–4,100 kilometres and cover up to 90% of the network. The auditors separately flagged a certification slippage of up to a year, and the risk that the target rate of 36 MS-21s a year will be reached only after 2029 because component suppliers lack capacity. Several makers of purchased parts for the SJ-100 and MS-21 can currently support only six aircraft of each type a year. And hanging over everything is the loading of the wider industry: with the state defence order absorbing about 80% of Russian aviation manufacturing, one source called the task set for UAC's civil division unrealistic by construction.

What happens next

Read together, the August 2024 disclosures mark the point at which Russia's civil aircraft programme stopped being a mobilisation promise and started becoming an investment problem with constraints that no directive can repeal. The demand side wants 50 to 60 aircraft a year, not 140 to 270; the cost side turns every delivered jet into a multi-billion-ruble subsidy; the export side cannot be modeled beyond single deliveries; and the production side is squeezed by supplier capacity, weight physics and defence priorities. What survives of the thousand-aircraft ambition will most likely be a smaller, slower, more expensive programme — but one anchored, its defenders insist, in a real replacement need for the ageing foreign fleet and in sunk investments that only serial production can amortise. Whether the government chooses a corrected KPGA or a wholly new strategy, the direction of travel after the audit is clear: fewer promises, longer horizons, and a hard look at what the state is prepared to pay per seat. Kommersant's reporting leaves no doubt that the recount has already begun.