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TO FLY ONES BEST

  • 13.01.2009

The Investment Financial Company Avialeasing, JSC might implement in Perm Region a large-scale investment project, which would prove the Perm region to be one of the centers of Russian aviation industry the status that has been cracked for the years of economic reforms. According to the Chairman of Avialeasing Board of Directors, Mr. Sergey Sopov, the company is planning to found a large regional maintenance facility for the new Russian aircraft Sukhoi Superjet 100 and today it is searching for the optimal external conditions to achieve the strategic business objective. The Perm region is one of bidders to implement the project. 

 

In summer of the previous year at Farnborough Airshow (UK) Avialeasing Company, which has been specializing in aircraft lease for more than 10 years, signed the Heads of Agreement for the acquisition of 24 Sukhoi Superjet 100 aircraft. All the aircraft are to be consequently delivered to UTair Aviation under the terms of operating lease to renew the fleet of 31 Tupolev Tu-134 regional aircraft. The first aircraft delivery is scheduled for October 2011. The volume of capital investments draws the attention to the commercial aspect of the project: namely, its impossible to promote the aircraft at the local Russian market without the updated high-technology maintenance facilities. This initiative has been taken by Avialeasing.

 

As it was explained by the Company, the project of creating the service center would require some $12 14 mln of investments. The acquisition of the aircraft as such will cost the company $620 mln (at 2008 values). The project has been timed for 20 years. By estimate the turnover of the service center will total to $80 95 mln per year (considering only SSJ 100 maintenance). Mr. Sopov states that the center is capable of maintaining two to three aircraft per month (the aircraft can be operated for 40 years). Meanwhile the experts assure that such a service center could provide the maintenance of the other aircraft types operated by the Russian air carriers. The financing is likely to be provided by Zapadno-Uralsky Bank of Sberbank of Russia, which, as the Head of Avialeasing says, is interested in the project.

 

However, the Perm Region has to compete with a number of regions providing lessors with favorable terms of taxation. Thus the constituents of the Russian Federationd deeply interested in implementing aviation projects either because of hosting the major aviation industrial enterprises (e.g. Voronezh), or because of using the aircraft as the basic means of transportation and communication (the Khanty-Mansi Autonomous Area), offer the more competitive property and transport tax rates with the similar level of the income tax to the lessors.

 

For example, the property tax rate for the aircraft in Perm Region is 2.2%, the transport tax rate totals to 50 rubles per kilogram-force (the regional Parliament is considering the possibility to increase it up to 72 rubles per kilogram-force starting from 2010). At the same time in the Voronezh Region, where Ilushin Finance Co. operates, the property tax rate collected from leasing companies is 0%, the transport tax is 36 rubles per kilogram-force; at the Khanty-Mansi Autonomous Area (UTair-Leasing) the figures total to 1.1% and 0 rubles per kilogram-force respectively, at Khabarovsk Territory (Dalmashleasing) 0% and 30 rubles per kilogram-force.

 

At the end of 2008 the heads of the Company appealed to Mr. Oleg Chirkunov, the Governor of Perm Region, with the request to consider the possibility of setting 0% rate for the property tax collected from the leased aircraft owners and the rate equal to the basic one fixed by the Tax Code of Russian Federation (i.e. 20 rubles per kilogram-force of aircraft engine thrust) for the transport tax. The question is how persuasive the arguments will be for the Perm authorities.

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