News & Publications
Rosaviaconsortium Presents Frigate Ecojet Project Feasibility Report
03 June 2013
FPG Rosaviaconsortium presented a feasibility report on the Frigate Ecojet mid-range wide-body jet airliner series outlining the financial model of the project. The event marks the completion of the design concept stage of the aircraft and the beginning of the second stage focused on attracting external investment. Russian and international development institutions, industrial corporations and field-oriented strategic investors are considered possible sources of financing.
“The feasibility report proposes putting the Frigate Ecojet into commercial operations in 2020,” said Frigate Ecojet project leader Alexander Klimov. “This is precisely the period that, according to IATA research, global carriers will be considering mass fleet renewals. We expect that the new aircraft, with a new technological design, will be a competitive alternative for the replacement of existing jet aircraft. The feasibility report also demonstrates the investment attractiveness of the Frigate Ecojet project for the state as well as for other potential investors.”
FPG Rosaviaconsortium has been focused on the development of technologically ambitious and competitive Russian Frigate Ecojet aircraft since 2009. Serial production of the aircraft is slated for 2020 with a production forecast of 250 aircraft to be built by 2030. According to IATA research the demand for the Frigate Ecojet aircraft to 2020 could reach 450 units. Should such demand be realized, it would guarantee an increase in Russian aircraft industry's share of the global market for wide-body aircraft accommodating up to 400 passengers from 0% up to 6% in 2020.
According to the feasibility report, the estimated volume of investment for the project is forecasted at $3.5bln. Approximately 63% of this sum accounts for capital investment such as R&D for development and aircraft certification, post-sales support and the construction of facilities and equipment for serial production. Investment in the working capital component will constitute up to $1.3bln. The peak load for project investment is expected in 2019.
The preliminary vision of share capital structure for the project is comprised of 50% investment, 30% from Russian Federal budgetary resources and 10% from FPG Rosaviaconsortium. The projected volume of state investment required is approximately $895.2 mio. Return on investment is expected in 2029, some 17 years after the launch of the project. This projection is supported by tax breaks made available for the program.
The overall tax liability for the project is estimated at $1.6bln to 2030. The total volume of net profit between 2013 and 2030 is expected to be approximately $4.9bln.
In March 2013 specialists of the Central Aero-Hydrodynamics Institute (TSAGI), evaluated and approved the results of the concept design stage. In particular experts remarked on the outstanding aerodynamic design features of the Frigate Ecojet that support the integrity of the aircraft’s overall structural design given the parameters of the size and weight of the aircraft.