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Ta-dah; here comes Sukhoi

30/06/2014 by Cdr. Bud Slabbaert

Gulfstream’s Russia based business jet fleet grew more than six-fold in the last six years. There are 53 customer-operated aircraft in Russia and a combined 76 in Russia and the Commonwealth of Independent States (CIS). The number of Dassault Falcon jets in the region has doubled over the past five years, with currently more than 60 Falcon jets in operation. Airbus delivered more 25 corporate jets to Russia and the CIS which 15% of all Airbus business jets. By the end of this year Boeing will have 25 Business Jets in VIP service in the CIS of which 21 in Russia alone. Embraer has 40 business jets in Russia.

Expectations? The market will continue to grow steadily and all are optimistic about increasing their share. Airbus estimates that Russia is the second top region after the USA for high net worth person. Bombardier goes as far as suggesting that Russia could become the driving force of the world market for business aviation. According to their research Russia and the CIS countries have a share of 22% of the global portfolio of business jet orders and in that regard it is currently the third region in the world after North and South America.

Ta-dah, here comes Sukhoi
On August 19, 2013 the Director General of the United Aircraft Corporation, of which the airplane manufacturer Sukhoi is a subsidiary, announces that the VIP version of the Sukhoi Superjet 100 will be displayed for the first time at the upcoming International Aviation and Space Salon, MAKS 2013 in Moscow. Four days later the media report that the right to demonstrate the airplane is disputed in a US court by an American designer and manufacturer of aircraft interiors, claiming that the company’s interior was allegedly borrowed illegally. It should also be noted that the aircraft on display was not new either but rather a passenger SuperJet that was to be delivered in 2012 by the now bankrupt Armenian Armavia. It was not a full Sukhoi Business Jet variant with increased range, but a light-configuration airframe to just show the advantages of the SSJ 100 VIP cabin. The interior was a mock-up produced by Moscow-based Aerostyle. Yet, the Sukhoi SBJ business jet product brochure says that a SBJ cabin will have the luxury of bespoke Italian interior design?

How it began
At the 2011 Le Bourget Airshow, Sukhoi Holdings, one of the most renowned Russian aviation companies and its Italian partner Alenia Aermacchi, member of the Finmeccanica group announce that a new Business Jet will be launched at the NBAA 2011 and it will be called the SBJ. Sounds a bit like the BBJ for Boeing Business Jet. Nowadays, Sukhoi calls it the SSJ100VIP. In the 2011 announcement the manufacturer forecasts to sell about one hundred of these aircraft in the next 2 decades. A year later, the forecast was reduced to 80 planes. What a difference one year makes in a 20 year prediction; a 20% difference. A proud announcement at the MAKS Aviation and Space Salon 2011: the Indian company Aviotech is to become the launch customer of the new business jet. A Letter Of Intent (LOI) for 10 SBJs in VIP configuration and 10 aircraft in option was signed. Aviotech commented that it chose Sukhoi Business Jet for its excellent economic advantages and technological features. In the nearest future, the companies plan to start negotiations on the technical layout of the aircraft to be delivered. Thereafter things remain silent around this Indian corporate and defense aerospace specialist, who was supposed to be Sukhoi’s first big customer. In fact they were not mentioned any more. An LOI may resemble a written contract, but is usually not binding on the parties.

She loves me, she love me not, she loves me, she….
Shortly thereafter and still in October 2011, great news; a new launch customer is announced. Comlux will purchase two jets and complete the VIP versions of the SuperJet at its Comlux facility in Indianapolis, USA. The company also took options for two more. They will likely be used for charter service in Europe and deliveries are planned for 2014. However in August 2013, an aviation magazine reports that Sukhoi’s launch customer Comlux has decided not to complete the first two aircraft and could back out of its deal to buy the aircraft altogether. The completion deal is definitely off, according to the President of Comlux USA, because the Indianapolis completion center is too full and the deal to acquire the jets is pending on whether Comlux’s requirements for aircraft performance criteria can be met. A Superjet executive countered that they are in the process of setting up their own VIP and corporate shuttle completions capability in a dormant hangar that was once home to the Alenia Aeronavali MRO in Venice, Italy. However, the Comlux-Group President told another aviation magazine that the implementation of the contract for acquisition and option will remain in accordance with previous agreements. The interior design and installation will be done in Indianapolis. He further stated that Comlux is confident that the SBJ will provide performance and reliability of operations to its VIP-customers. The aircraft will likely be operated by Comlux Kazakhstan. Thus not Europe. A month later the same Comlux Group President tells the media that he expects delivery of the two jets in 2015 and the Indianapolis completion center will not be producing the cabin interiors.

Virtue of origin
It is difficult to keep track of this story without little note stickers with dates an numbers all over one’s desk. Mind that the Sukhoi communication comes from the United Aircraft Corporation of which Sukhoi is part, from Sukhoi Civil Aircraft (SCAC) or from Superjet International. Anyway, in 2011 it was announced that the deliveries for Comlux were planned for 2014 and but now it will be 2015. In February 2012 the Sukhoi president reports that the company will start deliveries of business-jet version next year; thus 2013. Deliveries to who? At MAKS 2013 there is a converted passenger Superjet airliner that was delivered in 2012 but not paid for and thus taken back. It was equipped with a mock-up interior made in Moscow just to show the advantages of the VIP cabin. The aircraft has the colors of Rosoboronexport, a Russian defense export agency as it is due to go to this client. Then at Jet Expo 2013, “RusJet” announced that in the first quarter of 2014 it will begin operating the VIP jet belonging to the “Rosoboronexport”. The General Director of Rusjet states that the Sukhoi SBJ has similar characteristics as the Brazilian classmate Lineage 1000, but in Russia it will have a competitive advantage by virtue of its “origin.”

Appeal
In marketing it is important to realize that there are things that are needed and things that are wanted. Airlines buy aircraft because they need them. In private aviation owners buy them because they want them. In private aviation mediocrity of anything related to the passenger’s comfort and feeling well is unacceptable. Wannebees and governments are willing to accept something else if the price is lower or conditions are more favorable. Sukhoi may be selling Superjet airliners, however the executive jet market is a different league. It also requires a different marketing performance and a different communication style and strategy. Appeal makes a deal. It is not easy anyway to go on the market with a new product right now. Embraer, Gulfstream, Dessault, Boeing, and Airbus have been present in the business aviation market and trusted for many years. They have a considerable production portfolio and a clear progress of development. They also have reliable products, always kept promises, and they have a track record. Business aviation clients tend to look at well-established OEMs. And when it comes to financing such an investment, a question that comes up is: what will the airplane be worth ten years from now.

Facit
There is no doubt that Sukhoi knows how the build an airplane. Their biggest problem seems to be poor and problematic communication. Many different things have been said by many different sources over a considerable period of time. To say it in a popular manner: it is a quagmire of uncoordinated comments and every next time they seem to stumble over what they said the last time. If corporate communication and product promotion is not credible how can one expect to be successful in marketing and sales?