Russian Air Force stalls tailspin

Cut adrift from the Soviet cash cow in 1991, military design teams have also been searching for ways to streamline the military as part of a sweeping, five-year overhaul announced last month. The plan halves Russia's 1,700 military enterprises and consolidates its aviation companies into two main groups.

"Putin has made up his mind that the old military-industrial complex was inefficient and corrupt, and this is a way to beat it into submission while making it more efficient," Herrspring says.

"The government should take steps to support this industry, or we won't be able to produce any new generation aircraft," says Maxim Pyadushkin, deputy director of the Center for Analysis of Strategies and Technologies in Moscow. "We are losing our scientific potential, our researchers and designers."

But some counter that the brain drain is exaggerated. "There have been rumors in the media and our factory that MIG is dead, that all the engineers have left, and that we can't build planes," says Lev Bolshakov, a senior MIG salesman, after showing off the cockpit of a MIG-29 to a prospective buyer from Southern Africa.

On the open market, MIG fighters are competitive, because of their low price. "If this were the only criteria, we would have won the world," Mr. Bolshakov says. "But there are also politics."

Political decisions are being made by several East European nations - who want to join NATO - about Soviet MIG fleets they inherited a decade ago. They have two choices: either upgrade MIG-29s to NATO standard (the cheaper option), or buy new or used American or Swedish planes at a steep price.

Most nations seem to be choosing the more expensive Western planes, despite a joint-upgrade business formed by MIG and the West European Airbus-maker, EADS. Germany, which has dealt with Russian MIG upgrades since taking over former East German aircraft, is leading the way. "We tell [the Russians] that the only possibility to move forward is partnership with Western companies," says Wolfgang Aldag, a Germany-based EADS sales director.

While experts say there are 1,500 MIGs worldwide - 400 or so of which can be upgraded this way - aspiring NATO candidates, such as Hungary, Bulgaria, and Poland, seem to be reluctant. Hungary's prime minister said its MIG-29s make it the "lame duck" of NATO.

"Of course it's cheaper to upgrade the existing fleet, but with Western aircraft, they will have some kind of Western support," says Mr. Pyadushkin. "It's not a commercial choice, but rather a political one."

Sukhoi, which last year accounted for half of Russia's overall arms sales, is pursuing a different tack. At the air show, it wheeled out agricultural planes, and talked up a planned $70 million supersonic business jet. It also signed a large deal last week with American airplane giant Boeing and Moscow-based Ilyushin to build civilian planes for Russia's domestic market.

"We are ready to build civilian planes," says Yuri Cherbakov, chief spokesman for Sukhoi. "There are no prospects ...in the military sector."

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