Sukhoi close to deal for small civilian jet

Russian defence aerospace major Sukhoi is close to bagging its first civilian Indian client with its regional 60- to 90-seater jet Sukhoi Superjet 100.

Sources close to the development say the aircraft manufacturer is in advanced talks with several domestic airline companies, including Jet Airways, Air Deccan, Kingfisher Airlines and Indian Airlines.

It has also met representatives of regional airlines like Paramount Airways and MDLR Airways and others awaiting clearance from the civil aviation ministry.

The manufacturer is expected to conclude a deal by May-end and deliver its first aeroplane in 2008. It is offering a 25 per cent discount over the prices of entrenched small-jet competitors ATR, Bombardier and Embraer and adding in free pilot training and spares support.

The Brazilian Embraer costs $40 million and the Canadian Bombardier, $35 million. The Sukhoi Superjet 100 will cost $25 million.

Indian defence aerospace major Hindustan Aeronautics Ltd (HAL) is also in talks with Sukhoi for participation in manufacture. The Indian Air Force has bought 80 Sukhoi MKI, a new-age fighter.

Sukhoi executives were unavailable for comment. Jet Airways and Air Deccan executives confirmed that the company had approached them. "They made a presentation on the product features and its advantages. We are yet to take a decision," said a Jet Airways executive.

Sukhoi will be entering a tight segment of the Indian aircraft market, which is currently dominated by Toulouse-based ATR with an over 80 per cent share. Bombardier and Embraer have also been making aggressive moves to grab market share.

At present, about 20 per cent of India's 400 civilian aircraft are in the 100-seater or below category. By 2020, this number is expected to more than double to 200.

Sukhoi's small jet might find it tough to break into the market because its 95-seater model has a take-off mass of 40,000 kg, which puts it outside the purview of a sales tax break on aviation turbine fuel (ATF) for small jets that was offered in the Union Budget. Both Embraer and Bombardier benefit from this provision, which could result in a saving of almost 30 per cent on ATF costs.