Aircraft manufacturing without support: how a strategic industry loses development opportunities

Before the full-scale invasion of Ukraine by Russia, the aviation industry remained one of the few high-tech sectors that maintained a full production cycle. Ukraine remains in a limited club of states capable of designing, manufacturing, modernizing, and servicing aircraft. With the start of the full-scale war, enterprises partially reoriented themselves to defense needs and, despite everything, are trying to preserve their potential in civil aircraft manufacturing. But today they find themselves in conditions that are more like a struggle for survival than for development, and for them, the return of state support is important, writes UNN.

Reorientation to war and preservation of the full production cycleFebruary 24, 2022, changed the country, reorienting it to a military footing and working to strengthen resistance to the enemy. Aviation industry enterprises were no exception, quickly adapting to the new reality. Despite the closed sky for civil aviation, they continued their work.

Most of them began to fulfill defense orders — modernization and installation of weapons on helicopters, manufacturing of components for drones, repair of combat aircraft received from our international partners.

At the same time, enterprises did not abandon work with civil aviation — those aircraft that remained outside Ukraine before the full-scale invasion require maintenance, supply of parts, and technical support. And it is Ukrainian enterprises that can provide this, simultaneously replenishing the budget of Ukraine and preserving technologies, qualified personnel, and technical capabilities.

A striking example that the aircraft manufacturing industry is not just alive but continues to function is that for the first time in a long time, a plane that gives hope was seen in the sky over Kyiv region. The legendary and unique An-124-100 “Ruslan” transport aircraft was transferred from Ukraine to Germany a few days ago, reported the state enterprise “Antonov”.

Already abroad, “Ruslan”, like many other Ukrainian assets, will work for the interests of our state and help Ukraine’s partners.

Disappearance of benefits — disappearance of prospects?It should be noted that until January 1, 2025, the aviation industry, strategically important for the state, enjoyed tax and customs benefits and preferences that for years allowed aircraft manufacturing enterprises to develop. However, with the expiration of their validity, companies were left alone with wartime challenges. The lack of state support for them means a loss of competitiveness, outflow of personnel, and suspension of projects, as production costs significantly increase, and opportunities to earn money due to the war are almost non-existent.

The Verkhovna Rada Committee on National Security and Defense understands the problem and agrees that the aviation industry needs state support. At the same time, according to Fedir Venislavskyi, head of the subcommittee on state security, defense, and defense innovations, his colleagues from the Committee on Finance, Tax, and Customs Policy do not notice these problems.

My subjective point of view is that aviation industry enterprises need to be supported, but, as far as I understand, this point of view of mine is unlikely to find support in the tax committee for now. Therefore, I will personally try to propose changes in the Defense City bill to take into account the aviation industry. Will they be supported? We’ll see

The MP is convinced that aircraft manufacturing enterprises should be granted the benefits and preferences provided for by the bills on the creation of Defense City, which will help support the industry.

I believe that this is one of the drivers of our potential economy. And moreover, Ukraine is one of a very limited number of countries that can fully build aircraft. And the enemy is trying to destroy these capabilities of ours. Therefore, I believe that the aviation industry should be supported.

Aircraft manufacturing remains outside Defence City: industry warns of risks of losing potential14.07.25, 16:34 • 76781 view

Military expert Vladyslav Selezniov shares a similar opinion. According to him, the technological capability of the state is critically important in wartime conditions.

The war currently raging between Russia and Ukraine is increasingly acquiring the characteristics of a 4th generation war, where techniques, technologies, and unmanned systems are fighting. It is quite likely that the component that can be helpful for us on the battlefield in the production of drones, in particular, long-range, strike drones, those that we use for deep tracks, perhaps it is precisely here, first of all, that we should focus our attention on creating certain preferences.

According to him, efforts should now be concentrated on ensuring that Ukraine ceases to be a resource country, or that its economy is based solely on the agricultural sector. Efforts should be directed towards the development of industrial production and, accordingly, there should be preferences and benefits from the state for this.

All these decisions must be thoroughly substantiated and researched by relevant experts and analysts, so that the industry that brings financial benefits, reputational benefits to the country, develops and, accordingly, receives state support, in particular.

Post-war economyUkraine will reopen its skies for aviation after the war ends. At this moment, having its own aviation industry is not only a matter of prestige but also of strategic security and an opportunity for economic recovery. Without its own aircraft, competencies, and production capacities, the country will be forced to depend on external suppliers instead of continuing to produce aircraft and parts for them and selling them abroad. Therefore, preserving and developing aircraft manufacturing is a chance to become a powerful player again in the global market, where Ukrainian aviation equipment is well-known and respected.

For this to be possible again, state support for the aviation industry is needed not sometime in the future, but now. Otherwise, after the war, it will be necessary to restore not only the infrastructure lost due to enemy shelling but also the very ability to manufacture aircraft. Moreover, it is obvious that aviation will play a key role in the post-war reconstruction of the occupied territories.

RecallIn the current version of the Defense City bills, the aircraft manufacturing industry may find itself outside the scope of new benefits and preferences. As explained by Ruslan Melnychenko, head of the legal committee of the Aerospace Association of Ukraine, none of the specialized enterprises — including “Antonov” or “Motor Sich” — meet the proposed inclusion criteria, as they are not purely defense-oriented, but are aircraft manufacturing entities that are engaged not only in scientific, scientific-technical developments, engineering, manufacturing of parts, but also in servicing civil aviation. The Association proposes to include enterprises from the already existing government list of aircraft manufacturing entities, which undergo strict verification, in the list of Defense City residents.