August 31, 2025
Economic driver: why Ukrainian aviation needs more than partial attention within Defence City thumbnail
Economy

Economic driver: why Ukrainian aviation needs more than partial attention within Defence City

Economic driver: why Ukrainian aviation needs more than partial attention within Defence CityThe Defence City initiative is designed to restart the defense industry, but the aviation industry, which is an economic driver,
is only partially taken into account. Its development requires separate targeted support mechanisms.

”, — write: unn.ua

The new Defence City initiative aims to restart the defense industry and give Ukraine an advantage in weapons production and testing. However, experts warn that the aviation industry, which can elevate the economy to new heights, has only been partially considered so far. With unique aircraft manufacturing capabilities – from creating aircraft and engines to modernization and international transportation – Ukrainian aviation can become one of the main drivers of innovation and competitiveness in the country, but this requires separate targeted support mechanisms, writes UNN.

DetailsThe Defence City initiative has been launched in Ukraine, aiming to become a catalyst for strengthening the defense-industrial complex. As noted by the head of the parliamentary Committee on Finance, Danylo Hetmantsev, Ukraine’s unique advantage lies in its ability to simultaneously produce weapons and test them in real conditions. This, he said, increases competitiveness and stimulates innovation.

At the same time, experts emphasize that not all strategic directions have received full support within Defence City. In particular, the aviation industry – both as a transport component and as a high-tech industry – has only been partially considered, despite traditionally remaining one of the strongest sectors of Ukrainian industry. For example, MP Fedir Venislavsky noted that Ukraine is among the top ten countries in the world capable of independently creating aircraft, and the developments of domestic enterprises have repeatedly proven their superiority over many foreign counterparts.

Economist and aviation expert, aviation sector manager Bohdan Dolintse explains that the strength of Ukrainian aircraft manufacturing lies in its comprehensive production cycle – from aircraft creation to their maintenance and modernization.

“Ukraine provides these functions, including key components such as aircraft engine manufacturing. Unlike Russia, which, for example, does not have its own engine manufacturing for civil aviation. If we talk about competitiveness, Ukraine is among the leading countries in the aerospace industry thanks to the technologies, developments, and base it has – both scientific and technical, and industrial. And all this can become a powerful driver for economic development,” says Bohdan Dolintse.

The expert adds that Ukrainian air transport aircraft are unique in their segment, and this is confirmed not only by characteristics on paper but also by market practice.

“For many years, Ukraine has been one of the main executors of international transportation agreements, including agreements with international organizations such as the UN, where the unique characteristics of our aircraft are used even in countries with poorly developed aviation infrastructure or a lack of ground facilities for servicing certain aircraft. And, of course, they demonstrate high reliability,” notes Bohdan Dolintse.

At the same time, to maintain the high level and leading positions of Ukrainian aviation in the world, systemic state support is necessary. It will allow maintaining competitiveness and further unleashing the unique potential of aircraft manufacturing in the conditions of a new security reality.

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The partial consideration of the aviation industry in Defence City is a positive step, but Bohdan Dolintse emphasizes that the initiative provides only a special tax regime and indirect support for all participants. For aviation, however, additional, more targeted mechanisms are needed that will truly ensure the development and strengthening of the industry. Among the examples of such tools, the expert names the State Target Scientific and Technical Program for the Development of the Aviation Industry.

Such tools allow for a wide range of measures aimed at supporting and developing the aircraft manufacturing industry. They allow for the introduction of tax regimes and the provision of financial resources, for example, for modernization or the creation of new production facilities at aviation enterprises.

Regarding the loss of preferences for aviation from 2025, the expert explains that previously the Ministry of Economy was responsible for these programs. After the creation of the Ministry of Strategic Industries, they transferred to its competence, but due to the liquidation of this department, they may return to the Ministry of Economy or be transferred along with other functions to the Ministry of Defense. The further fate of these instruments will be determined by the relevant authorities.

RecallThe aviation industry has already proven that even in the most difficult conditions, it is capable of working, modernizing, and delivering results. The benefits that were in effect until 2025 have shown their effectiveness – they allowed for development and at the same time provided significant budget revenues. Now, with these mechanisms gone, enterprises are holding on thanks to the experience and professionalism of people, but their margin of safety is not limitless.

The head of the Aerospace Association of Ukraine, Viktor Popov, emphasizes that to preserve and develop the aviation industry, new program documents must be adopted with the restoration of tax preferences until at least 2035, the expansion of state orders, increased funding for research and development work, and the integration of Ukrainian aircraft manufacturing into European and world programs for the creation of modern aviation equipment.

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