Away From War For A Moment.

One of the things needed to be remembered while talking about SMO--life still continues. And here is an interesting video related to commercial aviation which stumbled upon today, and it discusses Air Koryo and situation with North Korean civil aviation. 

Indeed, a very practical question is asked. Most of those old Soviet-built aircraft will eventually begin to simply disintegrate, because no matter the maintenance, the air-frame fatigue cannot be stopped. The author does make a number of correct observations about Air Koryo fleet, with one exception, since TU-204 (214) is a very decent and not an ancient aircraft. In fact, it is a modern aircraft powered by very respectable PS-90A high bypass turbofans, and Air Koryo has two of those and they are not ancient: one is of 2007, another of 2008 years of production.  

But the issues the author of the video raises go well beyond the fate of a rather small air company from hermit kingdom of Juche. Apart, of course, from being deadly wrong on the issue of Antonov, which was able to produce only 47 regional AN-148 since 2004, peaking with 9 in 2013 and producing exactly ZERO aircraft in the last 5 years, while managing to defraud both Azerbaijan and Peru through prepayment by selling them... non-existent An-178. In other words, 404 has a commercial aviation industry which is 404 and it is never coming back. Author's arguments re: Chinese COMAC are precise--this is what I write about for years--unless you have your own competitive engines and advanced avionics (and systems), you are still in the state of being yet another Embraer. For all its famous aircraft--all of them are motorized by Western engines and fly using Western avionics. 

Here is the hope for North Korea--against the ongoing implosion (controlled demolition that is) of Western "rules-based order", North Korea will increasingly find its hands untied insofar as continuing to buy indigenous Russian-made commercial aircraft which do have both Russian engines and avionics. TU-214 comes to mind immediately, as is coming SSJ New. 

Irkut prepares the first flight of the SSJ-New regional jet for 2023 in hopes of starting series production of the aircraft by the end of next year. The SSJ-New is an improved version of the SuperJet 100 (SSJ100), a commercial jet with around 100 seats. It is a project in which the Russians wanted to compete in the global commercial aviation market, but which failed due to the low availability of the aircraft, among other problems. With the onset of economic sanctions on Russia since the invasion of Crimea in 2014, the state-owned UAC (United Aircraft Corporation), which controls the country’s main aeronautical manufacturers, decided to develop a variant with indigenous components. The list of replacements includes everything from avionics to components such as the landing gear and even the PD-8 turbofan engine, in place of the PowerJet SaM146, a joint venture with France’s Safran.

Superjets proved themselves not only as robust performers on "regional" routes, but fly freely on such traditional very high density routes like Moscow-Sochi or even longer St. Petersburg-Sochi and even Astana-Moscow. In fact, many do not even count them as merely regional jets with their range well within 4,500 kilometers. PD-8 and KRET avionics is what does the trick making this iteration of SSJ export friendly and, in case of Air Koryo, it will be naive to expect fully russified MC-21 being sold to them, not least because of MC-21 being a premium world-class aircraft not needed for specifically North Korea both geographically (route Pyongyang Beijing is 810 kilometers long, to Shanghai--935) and price-wise. Yet, there is a lesson in here once one considers a real state of the global economy, and dramatically accelerating collapse of one of the major pillars of Pax Americana--its soft power, it becomes clear that the export potential of both SSJ New and MC-21 is very impressive. 

But, of course, voluminous Russian commercial aviation market is a priority. That goes without saying--through 2030 Russia's market of commercial aviation needs 1,000 aircraft (in Russian). Aeroflot alone, contracted in September this year 339 Russian-made aircraft (in Russian) through 2030. So, do not forget all those other major carriers, such as S7 with its (for now) new fleet, or Ural Airlines, among many others. They will need to put away those A-321s and B-737s away fairly soon, 2-3 years, and then start replacing them with Russian-made aircraft. Even if to imagine (for the sake of experiment) that combined West moderates itself and even lifts some sanctions--there never, in several generations, will be any trust in any commercial or government institution either from the US or EU, period. I heard Biden today got lost in the space-time continuum, again. You cannot talk to entities who elect themselves Bidens, Johnsons, Trusses, or Sholtzes... waste of time.

There Is Always A Price To Be Paid.

We have been over this in this blog several times. It is good to repeat it yet again.

DUBAI (Reuters) - IranAir is looking to buy planes from any company not requiring U.S. sales permits and may consider Russia's Sukhoi Superjet 100, the flag carrier's head was quoted as saying, as Iran tries to renew its aging fleet despite facing U.S. sanctions... IranAir had ordered 200 passenger aircraft - 100 from Airbus, 80 from Boeing and 20 from Franco-Italian turboprop maker ATR. All the deals were dependent on U.S. licenses because of the heavy use of American parts in commercial planes.

I don't know if Iranians learned their lesson, after all Russian proverb the orient is a very delicate business applies fully here, but it is about time they started making some proper decisions. Especially with this in mind:

Most modern commercial planes have more than 10 percent in U.S. parts, the threshold for needing U.S. Treasury approval. But Russian officials have been reported as saying Sukhoi is working on reducing the number of U.S. parts in the hopes of winning an Iranian order for up to 100 aircraft. 

Big power politics does not work on mere trade contracts, however important they are.

The European Union, China and Russia backed a mechanism to allow “legitimate” business to continue with Iran, a plan aimed at sidestepping American sanctions and allowing international trade to continue unimpeded as President Donald Trump pursues his "America First" agenda. The push for such a channel, announced by EU foreign affairs chief Federica Mogherini in New York late on Monday, reflects growing calls in countries such as France and Germany for the EU to adopt tools that will allow it to pursue its foreign-policy goals with less recourse to an unpredictable U.S. ally. A chief catalyst was Trump’s decision to withdraw from the Iran nuclear deal even as world powers urged the U.S. to stick to its mandate.

Bloomberg gives a decent representation of Iran's main export's (oil) distribution:

As you can see, if push comes to shove--new "instruments" or not, the United States can "kill off" Iran's deliveries to Europe and Asia easily. I do not have any faith with EU, which, I think, can be forced to do US bidding, especially when one talks about "defense" issue, which are important to Europeans (after all, aggressive Russkies are planning to harm Europe for...no apparent reason). This could be a disaster for Iran but... enter Russia. 

First, the reason Iran is still not bombed, as many in Tel Aviv (and D.C.) sleep and (wet) dream about, is because of, no, not China, but Russia. After all, even Iranian assets in Syria are breathing much easier as member of Knesset's Committee on Foreign Policy and Defense Xenia Svetlova (obviously of Russian Jewish descent) admitted today (in Russian). 

Since Russia supplied S-300s to Syria, Israel didn't fly a single mission into this country and this delivery changed the balance of power in region. 

Isn't it what I preach for years now? How many more empirical evidences are needed before people start to take in basic facts of great power behavior. Especially if this great power (or superpower) is Russia who loves peace and quiet. Iran, sure as hell, now better start thinking very clearly regarding her trade relations with Russia, because it is her who is selling this most important and desperately desirable product in the world--political stability. Hence the question: can Iran be slightly more patient for Russians finishing SSJ-100s to fully Russian specs, same goes to MC-21, which goes into series production next year, and so on? There is, after all, another dimension to this whole regional dynamics once one considers that almost 40% of Iranian population are ethnic Azerbaijanis and that brings into focus the issue of Caucasus and Turkey, which herself is somewhat in limbo right now, albeit I expect her to fall back into the NATO fold eventually. In the end, Iranian oil deliveries also rest on arrangements which Russia, who doesn't really gives a damn about sanctions, will make. 

So, no matter how important for Iran her regional ambitions are, she will have, at least for a little while, to dance a little bit to Russian tune, whose music sheet ranges from trade to military assistance to the alternative to SWIFT which eventually will be killed by the US, to...well, guarantees of Iran's safety which is a direct function of Russia's military might and geopolitical weight. It is what it is and for the time of this great turbulence, Iran will have to do a slight accommodation with Russia who is sincerely interested in keeping Iran stable, prosperous and peaceful. In the end, it was Iran who, once sanctions have been lifted, immediately signed contracts for 200 commercial aircraft NOT with Russia, who at that time hoped that Iran will consider Russia's support. But, as they say in Russia the orient is a very delicate business. It looks like Russians finally learned their lessons and that is what matters most at this point of time.

It Is The Devil You Know--II.

Let's continue a bit of rationalization and reasoning which we started in the previous post with the same title  and get back to our global commercial airspace matters. Here is the MC-21 cockpit:

here is more:

This is largely Honeywell avionics and Honeywell is extremely proud to be a part of MC-21 program as main avionics and some other aggregates provider. For now. Honeywell is proud to be part of Chinese aviation too. For now.

This is how MC-21 or, for that matter, any other commercial aircraft flies. Straight and slow.

For this kind of flying commercial aircraft need all kinds of computerized on-board systems which control all mechanics and engines, which also provide monitoring and representation of the state of on-board systems visually. They also require radar, collision avoidance system, altimeters, navigation (usually inertial navigational complex with various correction systems, GPS, GLONASS Et all)  and the list goes on and on this is what Honeywell, plus some Israeli and French avionics companies pride themselves on doing it better than anyone in the world. When speaking about Russian commercial aircraft, however, one should be fully aware of the presence of Western avionics and some other systems not because Russians are so dumb and can not make their own, but primarily because having Western "partners" helps the process of certification and of reaching foreign markets. After all, there is also a reasonable want of many potential customers to deal with avionics, aggregates' and engine packages they got used to. But let us continue:

Here is a standard cockpit of SU-35:

 here is more:

This, meanwhile, are SU-35 (and SU-30SM) engines, or rather engine exhausts:

And this is how this damn aircraft flies:

If you want to get the point without watching the whole thing, get to 6:30 mark and try not to drop your jaw to the floor. Avionics of SU-35 presented in the photos above is 100% Russian-made and overwhelmingly, including elemental base, including processors, Russian-designed and produced. So now, let's cut to the chase. Not only modern combat aircraft such as SU-35 can do any commercial aircraft type flying easily (well, without passengers, of course) but they fly in such a way and carry an astonishing array of cutting edge sensors and weapons, that any commercial aircraft avionics and what it can do compares to SU-35 avionics as a horse and buggy compares to the top of the line Ford truck. In other words, try to develop AI based software and then realize it in own produced hardware for all-aspect thrust-vectoring engines. I can tell you immediately, it is much harder than producing pretty much unified and fairly boring avionics package for commercial aircraft. 

Here we are coming to this very important juncture at which we have to ask this straight-forward question: if KRET (part of Rostec mammoth corporation) is capable to make avionics which makes SU-35 fly like an alien spaceship while simultaneously using fully integrated sensor and weapons suite which commercial pilots (unless they are former military) have no grasp of, isn't it reasonable to assume that, say, KRET and UAC will have no serious problems removing US (or Western) made avionics from Russian made aircraft, together with 100% Russian designed and made engines, thus removing them from the sanctions which are coming? What sanctions you may ask? Well, the US has the right to prohibit any sales of aircraft to anywhere if they contain more than 10% of US-made parts. And this is the next step Trump Administration will take against Russian airspace.  

Russian know it. But once you remove P&W engines and Western avionics and aggregates from MC-21 (and, accidentally, SSJ-100) you get almost fully Russian-made aircraft which will not be affected by sanctions, at least not this way. And here is the trick. Look at PD-14--not a single foreign piece in it. In fact, this engine pushes boundaries of what is possible and promises enormous savings for customers. Some say as high as 17% over any Western analogue. Well, even if it is 10%--it is gigantic in commercial aviation terms. US plane makers know it. Moreover, PD-14 already launched another mini-revolution of sorts in commercial engines design (is it possible that it is somehow connected to Russian combat aviation, wink-wink) and materials. So, make your own conclusion if the makers of avionics and aggregates for SU-35 or SU-57 will be able to replace western parts on commercial jets? I guess it is always harder coming up in complexity than down and that is your answer. But perspective is even more threatening for the end of the next decade once PD-35 and CR-929 go on-line. 

If Russian commercial aviation market is large--its loss for Western commercial aircraft manufacturers is painful but survivable, the loss of Chinese market, on the other hand, talk about tectonic shift in commercial aviation and that is what CR-929 will do. Well, that plus I have some difficulty believing that all issues with COMAC 919 will be solved in timely manner (they will be solved eventually) but one way or another it is not real competitor to MC-21, A-320 Neo or B-373 Max 8. So, it's impact will be limited. The reason? China does not have modern engine, Russia does and, in fact, it is being certified as I type this. So, the trend is being set and, considering the fact that DJT doesn't control his own government, there is very little necessity of any kind of cooperation, especially with upcoming November sanctions and, I don't think, Putin really believes Trump anyway. But it was stated many times before--sanctions are good for Russia, well, except for the last vestiges of some so called liberal (in reality criminal) and so called "business" (mostly money making and laundering) circles of Russia who, as I said many times before, should worship Putin who is the only obstacle between this public and lamp posts on which they might be hanged the minute he steps down if they trespass. But that is a separate topic altogether. 

To Be Continued...

It Is The Devil You Know.

I wanted to post it a week ago, when it just came out but I got overwhelmed with work. Now is as good of a time as any. Listen attentively to what Putin has to say at 5:55 at Russia's Energy Week summit. The whole piece is worthy of attention but what Putin says about sanctions is massively important in a grand-strategy framework:

Fact is, for a leader of a nation to state that it is preferable to be under the most severe simultaneous actions, since it unties the hands, is a wowser of a statement and it gives some insight into Russia's political and economic kitchen. Well, this plus Putin speaking in the beginning (from 2:00) about failing to comprehend why the United States destroys the US Dollar. I too, to be frank, fail to understand from a basic rational position why the US works so hard to finish off the last vestige of its power--the trust in US Dollar. But that is if one uses basic principles of rationality. But, of course, Putin does know why and I, at the risk of sounding as an arrogant a-hole, also have an idea. Obviously not as comprehensive of an idea as Putin has (after all--he has one of the best, if not the best, intelligence-analytical apparatuses in the world working for him), but an idea nonetheless.    

Only sublime people (or morons) would deny that today we face a gigantic geopolitical shift and global turbulence--all that, the resulting effect of an implosion of a liberal capitalism (aka globalism) which has no national and cultural attachment other than to itself and to the process of making money, while increasingly failing to deliver an actual value. Indeed, consumerism ran into the most horrifying (for shareholders) financial wall--it reached consumer plateau. People, some people, either "overate" in developed countries or will never be able to afford standard of living so well "presented" in commercials--it does not work like this anymore and the American Dream is, frankly, dead. It was dead for sometime. I know, I remember America of 1990s and I can compare. The contrast is startling and not for good reasons. Fact is, I have all reasons to suspect that the situation is even grimmer than it is being reported.

So, is there any chance that America will improve? Some think so, by applying the very same methods that are in the foundation of collapse of liberalism. One of them is, in Russian-American case, the fight with competition for the markets by means of sanctions against Russia. This is not to mention a rabid Russophobia of Western elites, which helps them commit irrational and suicidal acts. One of those suicidal acts is precisely squandering of own reputation as business entity worthy of trust. All that is in the past for the US and the same is approaching US Dollar.

Consider $5.43 billion Russian-Indian contract for S-400s. Let us be frank here and I understand that it may sound harsh but in simple language the US has nothing comparable to S-400. Not even close. In other words--US wants India as US own market but has nothing competitive to offer.  So, what does it do? US does "convincing" (well, blackmailing) of other nations to not buy Russian weapons. It is pretty much the same situation as to offer a car buyer with $40, 000 budget a brand new top of the line Toyota or used Tesla with broken batteries. It is kinda obvious what normal rational people would choose. The same goes for Russian-Indian other aerospace projects and technology transfers. Absolutely the same situation is with energy supply with US being in a constant bipolar state threatening and then recanting, then threatening again and recanting yet again, to impose sanctions on Nord Stream 2. Any companies which want to cooperate with Russia on extraction are under the threat of sanctions. Good for Russia, since she was able to substitute key imports in hi-tech extracting and gas liquefaction equipment with Russian-made equally good analogues. 

So, not only Russia remains immensely competitive on gas market, she continues to supply the US with LNG. Thus the question: are they that dumb in D.C. that they do not understand that sanctioning half-of-the-world left and right they exhibit not US power but ultimate weakness to compete and doing so destroy reputation of US (well, it has been destroyed) as a reliable partner? With Russia in particular, the US is not competitive anymore across the whole spectrum of crucial military (and not only) technologies. In some, US simply has nothing, zero, to offer--such as non-nuclear submarines, cutting edge missile technologies and it increasingly falls behind in combat aviation. Now comes this MC-21 "thingy". 

One of the massive fields in which the United States remains highly competitive and a global leader is commercial aviation. I do like Boeing commercial aircraft, I will be missing a beauty and a queen of the skies B-747 once it is removed from the passenger service, I recall warmly B-727 and I have no problems with taking ever-reliable B-777 over Atlantic. In other words, I am a fan and admirer of the American (primarily Boeing) commercial aviation. But the juiciest part of Boeing's commercial contracts is medium range B-737 and it is precisely this segment where main money to be made. Now get this: Boeing fights with Airbus (with its A-320 series) for this immense market. Russia is not Boeing's significant market but Russian carriers surely bought many B-737s. Enough to take a look at Aeroflot fleet--42 B-737s, fewer than A-320-1, but still. But the rightmost column of Aeroflot shows 50 of Sukhoi Super Jet 100s which increasingly begin to fly (there are other carriers operating them) routes which used to be serviced by Boeing and Airbus mid-range aircraft. Here is Russian carrier Azimuth flying its SSJ -100 from St. Petersburg to Krasnodar. So, the shorter mid-range routes in Russia already see SSJ-100s substituting Western mid-range aircraft (B-737, A-320+1). Now imagine what happens when MC-21, especially with Russian PD-14 engine makes it to market? Yes, the removal of B-737s and A-320s will start in earnest. 

MC-21 is enormously competitive and it is significantly cheaper that either B-737 or A-320. So, the Russian state will have to do very little convincing of Russian carriers to buy MC-21. In fact, Russian commercial aviation is in full anticipation of this aircraft which was created specifically for this purpose--to compete with Western mid-range commercial aircraft and, eventually, come out on the global market. 

This video gives a pretty good feel about advantages of MC-21 over its direct B-737 Max competitor. It is very clear that MC-21 will have home field advantage in Russia, but MC-21's potential global appeal where the real danger to Boeing and Airbus monopoly is. How? Very simple: start from Iran and then, even despite own COMAC-919 (very slow and troubled development) there will be takers (possibly) in China and even in Europe. After all, nobody took SSJ-100 seriously too, initially. Now this aircraft flies in Europe and Mexico and people love it.

MC-21 is a much more serious competitor for a much bigger market segment and latest sanctions on Russian companies involved in MC-21 program are just a first salvo. But at this point, one has to understand why Putin wishes all sanctions, all of them severe, now. Russia, it seems, has already found or is very close to an economic model which works and this one has nothing in common with liberal capitalism. This model has no title yet but it is clearly some kind of fusion between state capitalism, socialism and free enterprise and it will be very interesting to see how this model will evolve. But all seems to point to the fact that it is already largely in place. After all, Russia openly proclaimed she will become number one arms supplier in the world and this, ladies and gentlemen, is as high tech and cutting edge as it comes. Ah, yes--dedolarization is in full swing, while President Trump threatens (in Russian--fresh) India and Russia. Evidently they have no idea of effects of a quicksand in D.C. For some odd reason this comes to mind:

To Be Continued...