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President Vladimir Putin: Dear colleagues,

Today we are discussing one of the most serious issues of the country’s economic development. How we solve this task will to a large degree affect the current image of Russia and its outlooks. How we solve this problem will affect whether Russia will exist as an intellectually sound country and whether it will have an intellectual future at all, or rather, as the colleagues have mentioned today, we will really continue to slide into the category of third-rate countries and become a raw-materials producing appendage for other countries and so on.

Industries such as the aviation and space industry, in which billions of dollars and the intellectual resources of entire generations are invested, naturally require special attention from the state. And indeed, these decisions will be difficult, and sometimes even painful.

Here, the governor of the Nizhny Novogorod Region has passed me a note from a person who I do not think is connected with administrative work or business, but whose entire life is probably connected with aviation – test pilot Nazaryan. It is interesting that though he has not been present at our meeting today, he mentions almost everything that we talked about. For the sake of fairness, he writes, it should be noted that the difficult situation of aviation has its roots in Soviet times. Although the foundation of the aviation and space industry was laid in Soviet times, the problems we are trying to solve today also originate from there. Frequently, everything that had been planned and manufactured was put into operation. There were no strictly set task requirements for engine designers on economy and noise reduction, for plane designers on interior design and comfort for passengers, or for electronic developers to create cut-edging systems of navigation and targeting. Quite objectively, these aircrafts could not be competitive.

At the same time, our respected test-pilot writes: “When the independence of the country is concerned, bargaining is not appropriate, and any arguments for economising in the industry are unsound.” It is difficult to agree with this, he is becoming emotional — Governor Gennady Maksimovich [Khodyrev]’s proposal was also emotional — so our respected test-pilot writes: “A general client is needed to buy our national technology. This can only be a major state transport company.” That is, essentially, a company that will buy everything without worrying about the quality. At any rate, this will also lead to the same situation that we had in the past.

But for the sake of fairness, I would like to note that modern methods for supporting the national aviation industry do exist, they are used by the state and the Government. Perhaps this is not enough, but 138 planes have been ordered by our national carriers by 2008. I would like to remind you that these decisions were indeed made.

In conclusion, I would like to say the following. Gennady Maksimovich [Khodyrev] and other participants of today’s meeting returned many times to the role of the state in this industry. Undoubtedly, this role should be significant. And if we realise the plan that has been discussed today – and I have no reasons to doubt that this will happen – then we achieve the desired result. This involves the creation of a special corporate structure, a holding which should contain the following main elements: civil aviation, military-transport, and special aviation structures, an engineering centre, a leasing company (in which we, by the way, pump $250 million a year, and will continue to do so), a testing centre, a scientific and technical centre and a training centre. If this becomes a strong, powerful force in the developing of national aviation industry, then we will achieve the desired result. But to make sure that this happens, we must make a definitive decision that we will do this. Judging from what I heard today, no one has any doubt that this is the right choice. So we will assume that this decision has been made once and for all.

I hereby ask the Government to prepare a draft decree with a plan of action for carrying out this entire strategy.

There are other necessary decisions which need to be passed soon, but they will be of a local nature – I mean decisions on the MiG, and other issues. But there should be a single plan according to which we will all work.

Thank you for your attention.