Wednesday 8 April 2020

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The source: "Promyshlenny Ezhenedelnik", No.28(211)

From the viewpoint of Avia-proekt

Sergey Sheygas: "The main principle of our business is trustability"

The paced planned operation of parent aviation enterprises that release ready-assembled aviation materiel depends significantly on the reliable operation of product-oriented supplier companies, whose work is usually unnoticeable both for final buyers and general public... Although small and rather immature companies having hundreds of delivery ranges and tens of business partners should be justly rewarded for their capability to maintain the delivery cycle and price steadiness of component parts for parent enterprises with the assumption that the actual market prices vary unpredictably and show generally an upward tendency. We would like to present the business of such specialized aviation enterprise by the actual example. We are talking to Sergey Sheygas - the general director of CJSC Avia-proekt – one of the leading and skilled within its market niche.

Sergey Leonidovich, be so kind to present your company, as the saying runs, from the first person.

— "Avia-proekt" is an immature company. It was founded in 2003. The core business of the company is delivery of aeronautical materials for aviation enterprises and management of repair of both aviation materiel and its components. The staff includes professionals having inestimable experience gained at civil aviation enterprises of the Soviet Union and Russia, during service in the USSR and Russian Federation Air Forces. The members of the staff are both the officers out of service in reserve and those who occupied precedently executive positions in Civil Aviation. The wide experience I am talking about is related to engineering directions, operation of aviation materiel and organization of aviation business itself... A strong, highly professional and efficient team of about 30 persons is created in the company as of today.

But what about the Soviet and market experience...

— Actually, life shows that the most valuable specialists are professionals having a combination of both experiences…The main core of our company has been working at the market for twelve years, not four. Our specialists have precedently a successful and rich experience of cooperation with aviation enterprises producing the prime items, with aviation companies, repair plants and factories producing component parts. We know the ropes of that market. "Avia-proekt" has obtained some licenses of the Federal Agency for Industry, corresponding International Quality Certificates as the supplier of aeronautical materials. We work both in Russia and Offshore - in Asia, the Middle East, Eastern Europe and so on. Our company delivers component parts and maintains a service for a number of aviation materiel: these are helicopters Mi-8 of all modifications, aircrafts An-2, An-24, An-26, Tu-134, Tu-154, Yak-40, Yak-42...

Is the staff of your company big?

— No. A team about 30 persons is created in the company as of today.

Do you cope with the task?

— We take pains.

What are the enterprises "Avia-proekt" collaborates with today?

— The thorough answer to this question is not simple and will take much time. The truth is that the list of enterprises we collaborate with constantly includes already more than hundred names. So, I apologize for incomplete answer. Our company collaborates with the largest Russian manufacturers of aviation materiel, among which are JSC Ulan-Ude Aviation Plant, JSC Klimov, JSC Kamov, also with famous native plants: JSC Electropribor (Kazan), JSC Moscow Plant Temp (Moscow), JSC Yaroslavl Radio Manufacturing Plant (Yaroslavl), JSC Gidroavtomatika (Samara), JSC Tekhpribor (Saint-Petersburg), JSC Moscow Plant MPZ2 (Moscow) and with the leading aviation repair plants: JSC SPARC, JSC Ural Works of Civil Aviation, JSC Omsk Civil Aviation Plant, JSC Rostov Civil Aviation Plant 412, RF DoD Aviation Repair Plant 121, RF DoD Aviation Repair Plant 218, RF DoD Aviation Repair Plant 356 and others. Unfortunately, because of newspaper space shortage I can’t mention all enterprises. But, of course, our main partner is JSC Ulan-Ude Aviation Plant and our collaboration is the basic and major task.

Is the task concerns supplying component parts?

— Yes. The first task for today is to timely provide the main assembly plant with component parts, so that the plant could carry out accurately its obligations on delivery of aviation materiel. For this reason we work with enterprises (their list includes more than hundred names) within the Russian Federation and in the CIS countries. This task is stiff and connected with operating procedures and first of all with investments. I think that the company has a good experience of different financial instruments application for providing continuous deliveries: we take credits, complete loans to meet all liabilities to our main business partner. In general, we solve financial questions, and for today — it is successful. Except for the organization of deliveries of spare parts we fulfill some more problems, among which the following: delivery of spare parts and assemblies to the Russian aviation companies, delivery for the foreign market, organization of repair, collaboration with aviation repair plants within the Russian Federation. We deal with our tasks not excellently but properly for certain.

Is "Avia-proekt" a big supplier for the main enterprise?

— Our company is one of the biggest suppliers for JSC Ulan-Ude Aviation Plant. Out stock list includes about 200 articles.

What does the export business of “Avia-proekt” include?

— We supply spare parts for aviation materiel of the Soviet and Russian manufacture, which is operated in foreign countries, and organize the repair of those spare parts and assemblies, which have the expired overhaul life and periods. This task is not so large but rather interesting for a variety of reasons. It is venturous to work at foreign markets, because it defines a competence of our company as a partner. The department of foreign economic activity is created in "Avia-proekt". As of today the department realizes the export business successfully. Working in other countries, we provide a comprehensive range of services as the phrase goes “key ready”.

What are the market advantages of the aviation materiel abroad?

— In my opinion, there are three basic advantages: the first — high reliability, the second — easy operation and maintenance and the third — survivability. These three basic factors of the Russian aviation materiel are attractive for the foreign partners.

Does the market of deliveries extend?

— Yes. It is apparently observed at least according to the orders executed by our main partner since 2001.

What is the main principle of "Avia-proekt" business?

— The main principle of our business is trustability. Specialists of the company, who are directly relevant to aviation and have a wide aviation experience, know the absolute uniqueness of this principle because the aviation materiel must operate reliably. And for this purpose we must reliably deliver, supply component parts, perform repairs...

Is there an increment of volume of deliveries of your company from year to year?

— Yes, of course. The scope of our business increases every year. And it is a pleasure, because the Russian aviation industry has started overcoming the hard situation it experienced in 90’s.

Could you present the volumes of deliveries?

— I would rather not speak about quantitative data related to "Avia-proekt" business, because, we are not a single chain in collaboration and our job is not the final one. We deliver component parts and consequently collaborate closely with aviation enterprises. Therefore, I think it is incorrect to present the volumes of "Avia-proekt" separately. Furthermore, the increase of our volumes is the direct consequence of the increase of delivery order for the Russian aviation materiel and that positive trend, honestly speaking, is a very pleasing fact.

To what degree is an industry sector restructuring helpful for such company like “Avia Proekt”?

— It is hard to estimate for now. Reorganization of the industry sector, integration of its enterprises continue for today and I reckon it is too early to make final conclusions. Although the positive tendencies in the activity of industry sector including activity in our branch are demonstrated by the results of incorporation though not in the scope we have expected. We have everything before us...

Does “Avia Proekt” participate in air shows?

— Generally, we don’t take part in air show as an exhibitor, because there is obviously no sense in doing this owing to our line of main business. As an "active participator" we visit the world’s largest air shows, we meet our foreign partners, discuss plans, resources and possibilities. Although once “Avia Proekt” was an official participator of air show.

Could you give more details?

— We have participated in MAKS in 2005 where for the first time demonstrated our own development — air-cushion AeroScooter Donat. AeroScooter met with public notice at the exhibition. We received many questions concerning AeroScooter after participation in MAKS starting from "where is it possible to see" and "give more details") to "where is it possible to buy". But we consider that the project is subjected to further development for some technical features improving so that to achieve the planned parameters. So our aeroscooter is under updating. I would like to mention that it is our first own engineering development. Therefore, it is more important for us to examine practically the engineering capabilities of the company, not to achieve the final result in the form of finished product sales.

In what does the MAKS differ from the other world’s air shows?

— First of all, MAKS is a unique possibility to meet practically all leading specialists of the Russian aviation industry. In fact, you should make a tour of the whole country to visit them all. It‘s just impossible. That is why the MAKS is a place, where a great number of people playing the leading role in the Russian aviation life (and not only in the Russian) get together every other year. It’s amazing to meet participators, to converse with them, discuss different painful issues, projected plans and ways of their solving, contracts, deliveries and so on. Besides, the most interesting product innovations are vividly presented at the MAKS. You can have a look at innovative developments, talk to branch scientists (as the phrase goes, “with a science”). We are very interested in learning some new technologies applied in manufacture and repair of aviation materiel, engines, equipment, navigation facilities... Surely, the MAKS is a very interesting and useful event. I consider that everyone connected with aviation should devote time for visiting the air show. It would be interesting and useful. Owing to the MAKS new contacts, which can result in another contacts, appear practically all the time and for everyone (including our company). Specialists, businessmen and potential foreign partners find each other by the way of communication and make agreements … Relatively speaking, the air show gives a notable positive.

We skip the problems of your business during our conversation...

— There are many problems. We should always overcome some difficulties during our work. This business is not easy: we are in the responsibility for the delivery of component parts, supply chain management, activities concerning reclamations, warranty package and so on … The special point is a price increase for component parts. Some plants lift their transfer prices yearly, half-yearly and even four times a year. Prices of some enterprises can increase 15-25 % even at stabilization of prices for energy sources and electrical power with rather permissive inflation. Such increase of prices for component parts is absolutely incommensurable to possibilities of increase of prices for final aviation materiel. I understand that the price for metal rises and it is objective. But when the enterprises plan their business with a big percent of an indirect expenses (sometimes the percent reaches 1000 %!), it is already non-marketed. May be their prices increase along with indirect expenses increase. Contracts of final product delivery are signed in advance, the contract price is estimated previously and then it is practically impossible to reconsider the price in spite of the degree of increase of component parts prices. And when some enterprise-monopolist states unexpectedly about 20% increase of price for its production on the principle “don’t want – don’t buy”, the problems along the whole chain are created.

Does “Avia Proekt” plan to expand its activity?

— We plan to increase amount of our key business and we think about parallel expansion of our business scope. Generally, it is the sphere of engineering developments. We have a brief experience but it is related to aeroscooter "DONAT" I have already mentioned. In case of success we hope to demonstrate a number of our new developments at the next MAKS in 2009. It is too early to talk of them now.

What directions of engineering developments are the most perspective for you?

— There is a number of perspective directions we are interested in: light and small air transport, pilotless vehicles … We know that such direction is in great demand and it will grow.

Sergey Leonidovich Sheygas finished Kharkiv Higher Military Engineering Academy of Aviation, department “Aircrafts and Engines”. He served for 18 years in the Armed Forces of the former USSR and the Russian Federation rising from the onboard technician of helicopter Mi-8 to the senior engineer of headquarters of the Russian Federation Air Forces. Sergey Leonidovich was a participant of some armed conflicts as an onboard technician (including conflict in Afghanistan) and humanitarian assistance missions in some countries of Africa. He is awarded the orders for combat services and medals. He has carried on aviation business since 1996.