Russian aviation stocks skyrocket
Shares of the Russian state-run aerospace giant, United Aircraft Corporation (UAC), experienced a remarkable surge of 45% on Tuesday, driven by the historic maiden flight of Russia’s first fully domestically-built aircraft. The soaring shares reflected the market’s enthusiastic response to the achievement, as well as positive developments in the Russian aviation industry as a whole.
Earlier in the day, the Russian Industry Ministry had announced a significant milestone: the successful maiden flight of an SSJ-100 aircraft equipped solely with domestically-produced components. The aircraft, named SSJ-NEW, soared to altitudes of up to 3,000 meters (9,800 feet) and reached speeds of 343 kilometers (213 miles) per hour during its maiden flight.
This achievement had a palpable impact on the stock market. By 16:48 Moscow time, shares of both UAC and the Yakovlev Design Bureau, responsible for designing the groundbreaking jet, were trading approximately 30% higher compared to the previous day’s closing prices.
The excitement in the aviation sector extended beyond UAC, as other aviation-related stocks also witnessed an upswing. This boost was largely attributed to news that the Russian government was actively considering funneling over 650 billion rubles (equivalent to $6.8 billion) from the National Welfare Fund (NWF) to bolster the country’s aviation industry.
An anonymous source with insights into the government’s deliberations revealed that a substantial portion of this funding—about 410 billion rubles ($4.3 billion)—is earmarked for an extensive long-term program aimed at upgrading the existing fleet of aircraft and helicopters. The remaining 240 billion rubles ($2.5 billion) will be dedicated to expanding the production of civil aircraft, engines, and essential components across the industry.
The SSJ-NEW aircraft itself is being meticulously crafted at the Komsomolsk-on-Amur facility, situated in Russia’s remote eastern regions. According to the Russian Industry Ministry, approximately 40 systems on the new aircraft have been replaced with domestically-manufactured components, showcasing the nation’s commitment to self-sufficiency and technological advancement.
An intriguing aspect of this achievement is the remarkable speed with which it was accomplished. A mere four years transpired from the preliminary design phase to the aircraft’s inaugural flight—a timeline that Deputy General Director for Civil Aviation of UAC and Head of the Yakovlev Design Bureau, Andrey Boginsky, deemed close to a record in the industry.
The initial Sukhoi Superjet 100 (SSJ-100) aircraft, introduced in 2008, served as a stepping stone for the recent accomplishment. However, it relied on foreign components, including its engines, which makes the maiden flight of the SSJ-NEW a significant leap forward for Russian aerospace technology.
As the aviation industry witnesses this landmark event, the Russian government’s commitment to supporting domestic aviation endeavors is propelling the sector to new heights. The successful maiden flight of the SSJ-NEW not only invigorates UAC’s market performance but also symbolizes a transformative moment in Russia’s aerospace journey, marking a shift towards self-reliance and technological autonomy.
