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Excerpts from transcript of meeting with aviation industry representatives

President of Russia Vladimir Putin: Colleagues, good afternoon.

We are meeting on the 100^th anniversary of Russian civil aviation. I would like to sincerely congratulate you, all your colleagues, veterans and those who are just joining the industry, on such a significant milestone in the development of Russian domestic aviation, in this case civil aviation.

Today we have many important events, such as the completion of an air terminal in Novosibirsk and renovation of the airport in Novy Urengoi. We will also discuss the upgrade of the Unified Air Traffic Management System.

I want to thank everyone who took part in carrying out these projects which are important for Russia. Investors, managers, designers and builders have done everything necessary to implement them successfully.

This means that the number of passengers the renovated airports can serve will increase significantly, the geography of flights and route networks will expand, passenger service and safety will reach a new level, the economy and the social sphere of the regions I have just mentioned will get an extra boost, and most importantly, the lives of millions of people will become more comfortable.

I would like to note separately the upgrade of the Unified Air Traffic Management System. This work was carried out under the relevant federal targeted programme, and the Unified System’s enlarged regional centres will increase Russia’s airspace capacity and improve flight safety.

Let us give the floor to head of the Russian transport industry Vitaly Savelyev and then turn to the regions.

Please, Mr Savelyev.

Minister of Transport Vitaly Savelyev: Mr President,

First of all, on behalf of all civil aviation employees and on my own behalf, allow me to thank you for the difficult decision that you made amid the sanctions, that is, to retain aircraft in Russia.

Vladimir Putin: It was you who retained them, and I merely agreed.

Vitaly Savelyev: I agree with this correction, but nothing would have come of it without you. Thanks to all this, we saved the civil aviation sector and continued to work stably.

In this hall today we see civil aviation representatives: our pilots – Heroes of Russia, flight attendants, managers and employees of aviation enterprises and airports, representatives of education institutions who train our staff for their subsequent work in the aviation sector.

What would I like to say? I would like to remind everyone that Russia has been and remains a mighty and great aviation power. We recall vividly how Aeroflot carried 139 million passengers in 1990, and it was rated by Guinness World Records as the top air carrier in this respect. Later, this country fell apart, and Aeroflot also disintegrated into 400 tiny companies. In 1994, Aeroflot was carrying just three million passengers annually, with all remaining companies carrying 33 million. This came as a sharp decline, compared to the 139 million mark. State regulation of civil aviation allowed you and us to virtually restore the operation of the entire sector.

Today, we will look at new facilities. Each year, we open over ten new infrastructure facilities, and companies also emerge. On behalf of all pilots and our personnel, I would like to thank you for the unprecedented assistance that we received last year. I am talking about the impressive and unprecedented 174.2 billion ruble subsidies. Of course, this allowed us to accomplish a lot and to fulfil the tasks that you had set us.

I cannot help but specifically mention Pobeda, our low-cost air carrier. If it were not for your personal involvement and all that legislation that we adopted for this purpose, it would have failed to get off the ground. I would like to tell you that it has been operating successfully for over eight years. Indeed, Pobeda has achieved unique and outstanding results. Since early 2014, Pobeda has carried 65 million people, including almost six million passengers, nearly 10 percent, who had never flown before.

I am also referring to Pobeda’s low rates. Pobeda is operating in difficult conditions, including the pandemic and the current period of sanctions. It is working virtually in the black and posting profits. In 2022, it carried over 11 million people and became the third-largest national air carrier.

I would like to tell you that we are eagerly expecting our MC-21 and Sukhoi Superjet aircraft from our aviation industry. As you know, we are expecting these aircraft. Along with the Ministry of Industry and Trade, we are expecting more than 1,000 Russian-made aircraft by 2030, and we will acquire them. I am confident that we will be able to implement this project through joint efforts.

Mr President, on behalf of all our employees and the entire civil aviation sector, I would like to assure you that all tasks and goals that you have set us will be achieved.

<…>

Vladimir Putin: Let's get an update on the Unified Air Traffic Management System as it applies to the regions and the efforts to create regional centres.

Please, Mr Bobylev.

CEO of the State Air Traffic Management Corporation Dmitry Bobylev: Good afternoon, Mr President.

The State Air Traffic Management Corporation ensures safe, regular and cost-effective flights in the Russian Federation.

As you said earlier, the programme for creating regional centres of the Unified Air Traffic Management System was completed in 2022 with 14 centres currently providing safe air traffic services from Kamchatka to Kaliningrad, including two ocean sectors, Magadan and northwest Russia.

The centres are equipped exclusively with the latest Russian-made equipment, including automated air traffic control systems manufactured by the Almaz-Antey concern which meet the best international standards, no question.

The implementation of the programme has significantly increased the capacity of our airspace, cut operating costs for air navigation services and improved the transit potential in Russia’s airspace.

The sanctions imposed by unfriendly states have significantly lowered the amount of foreign air traffic. Under these circumstances and in order to ensure uninterrupted business for the corporation, the Government has allocated a subsidy from the federal budget of the Reserve Fund in the amount of 17.9 billion rubles.

On behalf of the state corporation’s thousands-strong staff, I would like to thank you, Mr President, for the financial support provided to the company, which allowed us to ensure steady operation, to pay salaries on time and to meet our social commitments. The enterprise stands ready to continue to fulfil the tasks assigned by the state.

Mr President, I congratulate you, our dear retired employees and colleagues on a wonderful day, the 100^th anniversary of domestic civil aviation.

Thank you.

Vladimir Putin: For my part, I would like to congratulate and thank everyone who took part in the implementation of the projects you have just mentioned.

I want to stress that we will continue to develop airport, transport and navigation infrastructure of Russia, build modern airports and renovate existing ones. These are, of course, large government plans that are in full accordance with our national development goals.

By the end of this year, 18 airports should be renovated, and another 16 next year. Significant funding is allocated from the federal budget for these purposes. In 2023, 40 billion rubles is allocated for the renovation of 18 airfields, and 35.5 billion rubles for the renovation of 16 more in 2024.

Upgrading the airport network is a good boost to developing the regions and Russia in general. This means a more convenient life for people as it provides for easier movement across our enormous country. This is being done for people to travel more conveniently and cover this enormous space easier from the economic point of view.

I would like to once again thank everyone for your work and wish all the best and success to the employees in the industry. Thank you very much – including everyone who is in touch with us today.

What else would I also like to say? What would I like to elaborate on? The anniversary of civil aviation, as I said at the beginning, is not just an industry-wide event, it is an event of national importance.

Today, civil aviation, which holds a special backbone place in the national economy, employs almost 200,000 qualified specialists: a huge team. It is these people, you, colleagues, who are present here, and those who are not – it would have been hard to gather 200,000 here in one place – they are the foundation of the industry and, without exaggeration, the pride of the industry. Considering its importance, the government pays special attention to its support.

In total, 84 airports have been renovated over the past 20 years, and eight new regional and hub airports have been built. Ground navigation and engineering infrastructure is being actively updated. Airport terminals are also becoming more friendly and comfortable for passengers. A new logistics infrastructure is being developed and created.

Small aircraft should be taken to a new level as well. Mr Savelyev and I have engaged in this effort regularly for many years now. I hope passengers have started to feel it. At least, the number of local airlines in the Far Eastern Federal District is on the rise.

Undoubtedly, when addressing these issues, we will rely on our own capabilities and domestic producers. Our colleagues mentioned earlier that we are expecting the industry to come up in a timely manner with the fully Russian-made MC-21 and the Sukhoi Superjet, Il-114, Tu-214, the Baikal light multi-purpose aircraft, as well as the Ka-62, Mi-38 and Ansat helicopters. Ansat is widely used already, and the Mi-38, I hope, will be in service soon. It has good speed and capacity. A modern aircraft overall.

A new mechanism for low-cost leasing of domestic aircraft is being launched with funds from the National Welfare Fund which will ensure economic efficiency and, in turn, will keep airfares low.

Importantly, our manufacturers will need to ensure high quality in their work in order for us to be able to implement our ambitious plans to re-equip the domestic airlines’ fleets. I just mentioned this, but I want to say it again: this is a critically important part of our joint work. I have no doubts whatsoever that our plans will be fulfilled in a timely manner.

In turn, the state will continue to provide the industry with the necessary support and will push to make sure that our civil aviation is developing steadily. It is a complex but exciting industry with lots of promise which has ties with many manufacturing industries. This is, in the truest sense of the word, a high-tech sphere of activity.

Any airline and any airport is a complex operation. Your employees should work as a single, well-coordinated team. It has been like this so far, and I hope it will remain so as we move on. I have no doubt and I am sure that civil aviation workers will continue to fulfil their assignments responsibly.

Mr Savelyev, if there is anything we need to discuss or talk about, let’s do it. Please go ahead.

Vitaly Savelyev: Mr President, if I may, my colleagues are ready to ask some questions.

Vladimir Putin: Aviation is a complicated industry and requires highly professional knowledge. I hope you will be lenient and not ask me very difficult or professional questions. Address your professional questions to Mr Savelyev. He has studied this industry inside and out and is a real specialist. We have known each other for a long time, since our work in St Petersburg, but he has really become a specialist over the years. Now I am ready to talk with you on general issues.

Go ahead, please.

Former ALROSA Airlines pilot Andrei Lamanov: For me, civil aviation is not just my favourite job and profession. It is also my life, my family and friends. I talk with my veteran friends and they asked me to be sure to tell you that they fully understand the need for the special military operation and support you.

We also see that the state provides serious support for civil aviation. Are you planning to continue supporting airports and airlines? In principle, I heard your answer.

Vladimir Putin: Of course. In today’s conditions, we are simply compelled to do this. We cannot just keep the industry as it is and settle for small steps like maintaining things. We must ensure the development of civil aviation and we will do this.

Yes, top managers in the industry have done a professional job. They worked out their proposals and calculated everything. Mr Savelyev has already mentioned the level of support, but in the past eighteen months when we first faced the pandemic and then the events that evoked the need for the special military operation, the federal government allocated 229 billion rubles for the industry, if I am correct. This year, over 50 billion rubles will be earmarked for this purpose. So, funds will be allocated based on the realities we live in today.

As for support for the special military operation, I have talked about this many times. First, I would like to thank you for this – it is very important.

Second, I would like to repeat that we did not start any combat action – we are trying to end it. These combat actions were started by nationalists in Ukraine and those who supported them in 2014 when the state coup was staged – everything began with that. The events in Crimea and Donbass followed.

Since 2014, in violation of all the agreements reached, all the commitments undertaken, the regions of Donbass were basically subjected to a blockade. Heavy military equipment was used against them and large military operations were carried out. In other words, they started a war then that lasted eight years and was aimed at exterminating people who live there and feel vitally connected to Russia, Russian culture and the Russian language. How long should all this be tolerated? This is the root of the problem.

As for the difficulties faced by some manufacturing industries, yes, this was inevitable. But I think for many people – for those who were and are trying to create problems for us, it was surprising to see how effectively we countered the threats created for us in the economy and in some manufacturing industries. It appears that our financial system is fully functional, all manufacturing industries and services are operating – they are working rhythmically, without disruptions.

Moreover, international institutions had to admit that Russia had not only fended off the expected shocks – that is, a reduction in the scale of production, the level of the labour market and its condition, but we and the international institutions actually expect some growth across all indicators this year, general growth in the Russian economy. This means we have overcome – I hope – the most complicated stages of overcoming the obstacles that are being put in our way, and we will be moving forward.

In this context, transport in general and aviation in particular are certainly playing a very important role in national development. We have supported and will continue to support it. One of the most important principles, not the most important, but a very important principle is that air transportation must rely on domestic products, domestically made equipment.

I will not go over all our conversations with Mr Savelyev over the years now. We have known each other for a long time, but I will reveal a little – we were having disagreements with him, serious disagreements. I always said and Mr Savelyev won’t let me lie, that it was necessary to pay more attention to the purchase of domestic equipment. If we had done this in previous years, it would probably have been easier now. That is, we are going through everything at once.

Mr Savelyev made a voluntary decision – he decided and left everything with us. And he did the right thing because if they behave so badly with us, then to live with wolves, we have to howl like wolves. He maintained the industry, the fleet and the traffic volumes – it has even started growing again. Importantly, we are not being hostile to anyone, we are ready to pay, and that's it, but we simply cannot allow the industry to collapse.

However, we must place our stake on domestic aircraft while achieving quality in all indicators: noise, fuel consumption – everything. I won’t list everything now. You know this better than me. It is necessary to ensure quality and competition and take these products to international markets. Maybe we will talk about this later.

We can do this and we will certainly do it. Of course, we will support the industry – there is no other way. This is what we will do.

<…>

General Director of Aeroflot – Russian Airlines Sergei Alexandrovsky: Mr President,

Sergei Alexandrovsky, Aeroflot CEO.

Thank you again for the state support and your personal attention to civil aviation. Thanks to these support measures, we managed to keep airfares at an affordable level in 2022, which is very important for transport accessibility and the mobility of the population inside the country.

I wanted to ask you the following question: what priorities do you see for Aeroflot, the national carrier?

Vladimir Putin: Mr Alexandrovsky, you know all this yourself. Mr Savelyev sets these directions as does the Prime Minister. The main priority is to ensure growth in passenger traffic volumes, and guarantee safety in the industry. Maybe, safety should even come first.

Of course, it is necessary to develop the regional network and, as I said recently, aircraft orders must be primarily tailored to the potential of domestic producers.

How many orders have you placed? 300?

Sergei Alexandrovsky: 339.

Vladimir Putin: This is a good, stable order and it will be the right load. You and I understand that with such a solid order, without a big production run, it is impossible to ensure cost effectiveness, a cost that is acceptable for the economy or for a given company.

What was the problem before? Why did Mr Savelyev and I argue? Because if there is no big order for a domestic company, the cost will always be high. It will be individual custom production, as it were. But with a big order, the cost goes down and the final price goes down. In this case we are talking about a complicated product, an aircraft. A good, large order will certainly support the manufacturer of domestic aviation technology.

To sum up, the priorities are clear, and now the main thing is to follow through. It seems to me you are doing fine, and I am sure this will be the case in the future, too. I can only wish you success.

Sergei Alexandrovsky: We will follow through on everything and work everything out.

Vladimir Putin: Thank you.

<…>

Vladimir Putin: I would like to congratulate you once again on your centenary and wish you all the best.

Mr Alexandrovsky asked me about goals and priorities. As for the economic component, these are the things of everyday life. But there are also other issues. This, of course, includes safety and the quality of service – in the good sense of this word. The quality of working with people, respect for passengers, respect for people depend on all members of the crew, on everyone – from flight crew to airport services, ground services. I would like to ask you to always keep this in mind.

I know that the level of your work, your work culture in the broadest sense of the word is at a high level, and I would like to ask you to hold the bar high.

As for safety, it is always necessary to make decisions in favour of safety. You know, it’s the same as on the road – better safe than sorry. Safety must always come first. I remember, this has happened to me more than once, but it was on an airplane. A bird was sucked into an engine on a twin-engine aircraft and the engine went down. We asked the captain what he could do about it. He said, “We’ll make it.” I asked, “Maybe it’s better to turn around and land?” Eventually, we landed at an intermediate airport. Decisions like this should always be made in favour of safety.

Once on a helicopter, there was no visibility at all but we badly needed to get to our destination point. I said, “Let’s try to make it.” I was already the President at that time. The captain came out and said: “I am the captain of this aircraft. I make the decisions, and I won’t fly.” He turned and went back to the cockpit.

This is very important. You are in charge of not only your own life but the lives of dozens of people. This is an interesting, responsible and very important job not only economically but also politically because the connectivity of territories is important for strengthening statehood and for state-building, without exaggeration or excessive pathos. I congratulate you and wish you all the best. Goodbye for now!

Vitaly Savelyev: Thank you very much, Mr President. Thank you for this warm and sincere conversation, I think, from all of us.

I would like to use this opportunity to present you with this book that was published for the centenary of civil aviation. This is an advance copy. It has historical photos showing what stages aviation has passed through over these hundred years. I would like to give it to you, if I may.

Thank you very much.

Vladimir Putin: Thank you.