Russia to create aircraft monopoly?

From RIA Novosti:

MOSCOW, December 20 (RIA Novosti) – Last Friday, Prime Minister Mikhail Fradkov said he supported the creation of a unified national aircraft manufacturing company. It will combine such Russian aircraft manufacturers as Sukhoi, MiG, Ilyushin, Irkut, Yakovlev and Tupolev. The newly-formed monopoly will manufacture civil and military aircraft.

According to Commersant, the monopoly will be created in two stages. The first stage will include the restructuring of existing aircraft manufacturing enterprises and the creation of a state-private consortium and managing company. The state’s stake in the monopoly is expected to be 25.5%-51%. In the second stage, a holding company will be formed with equal participation from every company.

Practically every aircraft manufacturing company head agrees that the process will take a long time. “The valuation of consolidated assets alone,” a source at Sukhoi said, “as we know, might take a year or more. It will be difficult to assess intellectual property, as well. It is especially important for semi-state owned companies, where they will have to figure out the state’s share of intellectual property.”

Market analysts note that there are two major negative consequences of the merger. The participants will have to give up their world-renowned brand names. Most likely they will only keep them for current projects.

Second, the creation of a state-controlled monopoly might lead to a situation where projects are not selected based on market demands, although, at the same time, the internal rivalry between projects would be too strong and interfere with the company’s stable and efficient work.

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I have my doubts as to whether this will ever really happen – however, there has been quite a lot of talk about it over the last few years.