Russia showcases aviation ambitions at airshow

ZHUKOVSKY, Russia, Aug 21 (Reuters) President Vladimir Putin vowed to revive Russia's once mighty aviation industry today as he opened an airshow aimed at showcasing the country's industrial and military ambitions.

''Russia ... faces the task of maintaining supremacy in producing military aircraft,'' Putin said at the MAKS-2007 airshow at Zhukovsky airbase east of Moscow as two dozen military jets, passenger planes and helicopters roared past him in aerobatic formation.

''The show presents presents the unique potential of our country,'' said Putin.

The Russian president said last week Russia's long-range bomber aircraft would revive their Soviet-era practice of flying continuous patrols, some near NATO airspace.

Putin's announcement was the latest in a series of moves apparently designed to show off Russia's new-found assertiveness.

As part of that trend the military is receiving a major injection of cash to modernise ageing equipment -- including new planes -- after years of under-funding and neglect since the Soviet Union ceased to exist.

Russia is also seeking to revive production of civilian aircraft as part of its strategy to promote high-tech industry and reduce dependence on oil and gas exports.

Manufacturers like Tupolev and Ilyushin used to turn out hundreds of jets a year but that has been reduced to a handful as Russian carriers switch to more comfortable and economical Boeing and Airbus airliners.

In a bid to reverse that decline, Putin ordered Russian aviation firms to merge into the United Aviation Corporation (UAC), which is intended to compete with foreign rivals.

Interfax news agency quoted UAC President Alexei Fyodorov as saying the company would offer up to 1 billion dollar in shares in a private placement next year and planned an IPO by 2010.

One of its biggest projects is the Sukhoi Superjet regional airline, which will be the first all-new airliner model produced in Russia since the fall of the Soviet Union.

A senior Russian aviation executive, speaking on condition of anonymity, told Reuters that deals to order Superjets could be announced at the airshow.

''There are lots of talks going on. We hope to have something to announce by the end of the airshow,'' said the executive.

This year's show, the biggest yet, involved around 800 participants including delegates from Boeing and Airbus.

Other deals and announcements made at the airshow on Tuesday included: *VSMPO-Avisma, the world's biggest titanium maker, announced the formation of a joint venture with Boeing to produce parts for the U.S. aircraft maker's 787 Dreamliner jets.

*VSMPO-Avisma said it planned to invest between 800 dolalr and 1 billion dollars to increase output of titanium products, and may list shares abroad in 2010. Its products are widely used in aircraft production.

*The defence arm of planemaker Sukhoi signed a contract to supply Indonesia with 6 fighters, worth 300 million dollars, which will increase Jakarta's Russian-made fleet to 10 planes.

*Rosoboronexport said it was planning to issue shares in its helicopter-making unit Vertolyoty Rossii before 2012.

Tomorrow, new Airbus CEO Tom Enders is scheduled to speak to reporters at the show, while Russia's Tupolev civilian jet maker is expected to unveil new models.

REUTERS GT RK2320