Investments in the sky: how the aviation industry will be developed

Underfunding is a pit in which Ukrainian production is permanently drowning. And this applies not only to aviation but also to food, machine-building, and other industries. Today I will pay attention to the aviation industry of Ukraine. And there is even good news here. This year the government has paid special attention to the aviation industry. What exactly do I mean?

In 2021, the Cabinet of Ministers approved the State Target Scientific and Technical Program for the Development of the Aviation Industry for 2021–2030 with a total expected investment of UAH 35.93 billion. It must ensure the development of the production, design, research, and human resources potential of the country. The state plans to build a production of competitive aircraft, in particular, by concluding agreements on strategic cooperation with foreign partners to promote the products of the domestic aircraft industry in foreign markets. In addition to all of the above, one of the priority tasks is to improve the organizational structure of the management of the aircraft industry and the adoption of measures for import substitution in the aircraft and helicopter industries.

The Ministry of Strategic Industries will be obliged to submit information on the status of the program to the Cabinet of Ministers and the Ministry of Economy by March 1 annually. The project will be implemented with funds from the state budget, as well as foreign investments. The program defines the following areas of development:

• “Legal” — UAH 10 million;
• “Aircraft” — 22.37 billion UAH (passenger and cargo aircraft, UAVs, general aviation, flight simulators — 18.49 billion, domestic helicopters — 3.88 billion)
• “Engines” — UAH 8.71 billion;
• “Systems and units” UAH 3.26 billion (aviation systems — UAH 1.77 billion, aircraft units — UAH 1.40 billion)
• “Standardization” — UAH 1.29 billion;
• “Social and legal direction” — UAH 300 million.

It is predicted that the annual volume of sales of domestic aircraft products in the period 2021–2030 will be about $1 billion in equivalent, for the entire period — $10 billion.

In the world, the United States occupies a leading position in the production and supply of aircraft. The largest aerospace suppliers are United Technologies. But the country not only produces but also creates a whole economic area, which consists of millions of jobs in the industry, the list of services supplied by SMEs, airport maintenance, etc. Air transport facilitates the flow of goods, investments, and people. $2.2 trillion is the export of aircraft for 2017. The development of this area earns $7.8 trillion in foreign direct investment for the United States. Just imagine!

The successful reform of the aircraft industry will become an indicator of Ukraine’s investment attractiveness. Why is it important? Because it will generate a flow of foreign direct investment. I have written about the progress that FDI is bringing in previous blogs. If the state implements an approved project, our country can make a confident step forward towards an attractive investment ecosystem.