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Aeropolitics, Airline Management, Commercial Airliners, Major Airlines, Other Aviation Issues, Regional Aircraft, Regional Airlines, State Owned Airlines, UPDATES

ABSTRACT: Sukhoi’s 93 seat, $35 million SSJ-100 has received 30 orders this year already (Aeroflot x 20, Interjet x 10) and is looking to a new stretched version by 2018, is this aircraft a real competitor to Embraer, Bombardier and Mitsubishi ? or just a ‘niche’ aircraft mainly for the Russian Federation ? it’s Snecma SaM146 engine is a CFM56 derivative which is being phased out in the industry as new generation engines come on line on the Boeing MAX, CSeries, MRJ Embraer E2’s and Airbus neo aircraft, with published SSJ fleet aircraft utilization at 8 operators between a low 93 to 166 hours per month this has to be worrying for any operator, is there a problem with support ? reliability ? or the operators ? delivery to its first Western European customer, VLM Airlines of Belgium is delayed until 3Q/2016 due to cerification, as well the aircraft’s future international success depends on Russia’s foreign policy, if new sanctions have to be added they will target the Russian aerospace industry, crushing Russia’s dream of being a serious international commercial aircraft player with the SSJ-100 and future Irkut MC-21, without international orders, no company can be a major player in this industry, no matter how big its domestic market is.

The SuperJet International SpA (a joint venture between Alenia 51%, Sukhoi 49% on the Sukhoi SSJ-100 SuperJet) with 182 orders, has received a follow on order from Mexico’s Interjet for 10 more of the aircraft for a list price of $US 350 million, though no one pays list price for commercial aircraft today, not at Sukhoi for sure, and not at Boeing, Airbus, ATR, Bombardier, Mitsubishi and Embraer, more on that topic in a up-coming blog. I would be very surprised if Interjet paid more than $24.5 million per unit (30% off).


Interjet of Mexico now has 13 of the 93 seat $US 35 million list price SSJ-100’s in its fleet, it is the BIG international customer now with 17 more to be delivered. The airline chose the SSJ-100 due to its attractive price and its ability to operate from its Toluca, Mexico hub (8,466′ ASL), which apparently the E-190 could not do without a major payload range penalty. The airline also has 46 x A320’s with 40 x A320neo’s on order as well as 10 x A321Neo’s. The airline says it is happy with its SSJ’s and has a 99% reliability so far.

In a May 2014, a SSJ service statistic showed Interjet with 6 SSJ’s flying only an average of 166 flight hours per month per aircraft, 5.1 flights per day on an average sectors of 1.1 flight hours.  Flying a brand new regional jet for less than 2,000 hours per year is not economical, and either the aircraft has a reliability issue or management is not efficiently utilizing the aircraft, as a new jet must fly at least 3,000 flight hours per year (250 FH/month), I am sure the A320’s are flying at least 10 hours per day, so why is the SSJ doing half that ? 

Looking at the aircraft utilization of the 4 airlines that went bust operating the aircraft, it is obvious the aircraft were greatly under utilized and with the high fixed cost an airline is saddled with, your cost of operation at too low of a utilization increases CASM beyond PRASM. (Armavia 122 FH/month, Sky Aviation 111 FH/month, Lao Central 28 FH/month, Moskovia 93 FH/month). 


This order is on top of an earlier order by Interjet for 15 plus 5 options which have been converted to orders, and presently 13 SSJ’s are in service with “excellent operations and dispatch reliability of 99%” according to Interjet, the 1st western customer for the aircraft. This makes Interjet a very high profile international customer, after the first 3 international customers went bankrupt early on in their SSJ-100 operations (Armavia of Armenia, Sky Aviation of Indonesia and Lao Central of Laos) and 1 Russian airline also failed (Muskovia).

ssj-armaviaLao Central received its first Sukhoi Superjet 100 this month. Credit: Sukhoissj100pkecnskyaviation_alexeydemin

The 3 international airlines that went bankrupt using the Sukhoi SSJ, Armavia of Armenia, Lao Central of Laos and Sky Aviation of Indonesia. Utilization was one reason they went bust, was it the operator or the OEM at fault ? Anyway, by 2014 only 84 SSJ-100’s have been delivered, less than 2 per month since its EIS (entry into service) April, 2011. There is a plan for a stretched version by 2018.



The aircraft is going to get caught up in the political and economic crisis that Russia is in today, due in large part to its annexation of Crimea and its current efforts to do the same in SE Ukraine, on top of Russian annexations in Abkazia and South Ossetia (Georgia) and Transnistria (Moldova).

While Russia’s flag carrier, Aeroflot returned the first “lite” 10 SSJ-100’s to Sukhoi, which paid $19 million to Aeroflot for each one (NOTE: indication of actual price paid by Aeroflot though Sukhoi has confirmed a price of $16.6 million to Aeroflot, the extra $2.4 million per aircraft was for operational lost revenue), the early ‘lite’ version was problematic and will be replaced with the LR ‘full” version, Aeroflot just ordered 20 more in January, 2015, and will operate 50 SSJ’s in due time.

Apparently Sukhoi will use those ‘lite’ versions for their corporate VIP aircraft conversion program, as they think they can sell 8-10 VIP versions, the cabin is big, but range is too little and will have to be at least equal to the Embraer Lineage 1000E at 4,600 nm to be attractive (currently 2,950 nm is the max. range).

Aeroflot had 4 of its first 10 SSJ100’s grounded by the Federal Agency for Air Transport due to reported failures with landing gear and wing slats. The ‘lite’ version is gone and the LR version is much better. In March 2012, all 7 delivered SSJ’s were grounded due to technical issues, and in May 2012, a factory demonstration flight in Indonesia crashed killing all 45 on board.

The program has cost Sukhoi $1.09 billion of which $414.3 million came from the state treasury, yet comments by Sukhoi’s VP of Finance, Yevgeny Konkov was that $2.0 billion was spent on the initial stages of production alone ! Clearly this is a very important program for Russia’s civilian aerospace industry, which is in shambles, none of its commercial aircraft can be termed anything close to success, basically ALL are BIG money losers, with little if any airline appeal.



Aeroflot just ordered 20 more SSJ’s and will have a fleet of at least 50 in due course. It has suffered many problems with its early ‘lite’ version, eventually returning them back, and getting $19 million for them on their return when they paid $16.6 million originally. Even Aeroflot had a low utilization rate with its SSJ100 of only 113 flight hours per month per aircraft, while surely its A320/321’s fly 250-300 flight hours per month ?

Moscow’s drive to have Russians flying on Russian aircraft, means this SSJ will be a big hit in Russia, on the international front it will be a niche player, its success will depend on international politics, more sanctions on Russia and the program internationally will be a dud, and if we get peace in Ukraine, then a few dozen will be sold around the world.

The the clock is ticking, right now it can compete on price and economics, but the new Embraer E2’s, Bombardier CS100 and MRJ90 with new generation engines, will blow it away, its Snecma SaM146 is a modified CFM56 of the older generation of B737-300/700’s and A320ceo’s that are now being replaced by the new Boeing MAX and Airbus neo lines. Will the SSJ be re-engined as well to compete ? with a Russian engine ?


The SSJ-100/95 LR seats up to 98 passengers (93 in Interjet aircraft), and has a MTOW of 109,019 lbs., Maximum fuel of 27,976 lbs. and a Maximum payload of 26,995 lbs., Cruise speed is 870 km/hr, MAX Altitude is 40,000 feet.

With a maximum passenger range of 2,475 nm (with 98 passengers at 220 lbs./each), the aircraft has long legs.

The SSJ-100 is the first commercial aircraft Russia has ever produced that has some appeal to western operators, and is to open the international market for the Irkut MC-21 narrowbody aircraft to follow in 2020 at best.

The first delivery of the SSJ-100 was made to Armavia (Armenia) in April, 2011, since then only 84 SSJ-100’s have been delivered by the end of 2014 (in 44 months), or 1.9 aircraft per month (average). There must have been some delays at Sukhoi as serial number 95081 should be the 20th aircraft for Interjet and delivery was for 12/2014, yet the 13th aircraft just arrived in Toluca, Mexico, but that is normal given the fact that Sukhoi had to deal with a great deal of problems with the SSJ-100 early on I guess.

Having 4 failed airlines operating it is not a good recommendation either. Presently the SSJ-100LR that was to be delivered to VLM Airlines of Belgium 2Q/2015 is delayed by till 3Q/2016 due to certification issues and getting its performance to meet steep approach approval into London City and Antwerp’s 5,000 foot long runway, VLM is the first Western European customer for the aircraft (2 orders plus 10 options), seems some claims were not exactly true about the aircraft.

The SaM146 engine from Snecma of France claims to be 10% more efficient than current GE CF34 line of business and regional aircraft jet engines, I will dispel that false claim further down, but for sure the new PW1000G geared turbo fan engine line for the Embraer E2’s, Bombardier’s CSeroes, Airbus’s A320neo line and Mitsubishi’s MRJ, will be 10% – 15% more fuel efficient and lower on operating costs.

The aircraft is going to get caught up in the political and economic crisis that Russia is in today, due in large part to its annexation of Crimea and its current efforts to do the same in SE Ukraine, on top of annexations in Abkazia and South Ossetia (Georgia) and Transnistria (Moldova), and economic sanctions against Russia will hurt its market potential.

Interjet plans to fly the SSJ-100 to the United States from October 2015, a chance for the Americans to look at this aircraft very carefully. The SSJ-100 is the first commercial aircraft Russia has ever produced that has some appeal to western operators, but how good is it against western competitors ? It is hard to get ‘real’ numbers on economics, the Sukhoi people off course claims it is very economical and reliable, and I will now explore this.

The economics of the SSJ-100 is hard to compare to western aircraft, as Sukhoi does not release any numbers just broad marketing statements like “the SSJ delivers its operators more profitability through easily accommodating their many operational needs in a crucial and demanding market with best in class economics” really? No data to support that ?

Like Bombardier it uses cash operating costs per flight, which is misleading as it keeps the acquisition price out of the equation, which is not realistic for a real evaluation, the life cycle cost of any aircraft is acquisition cost (-), operational costs (-) and residual value (+) and then that needs to be all subtracted from the revenue the aircraft will generate over its life with the operator, which needs to be maximized through highest possible utilization, load factor and yield over its operational lifetime with the airline.

In short, the value of the aircraft to an operator over a set period can be calculated as Total Revenue generated – Acquisition & Financing cost – DOC (direct operating costs) – allocated IOC (indirect operating costs) + resale value. A commercial aircraft MUST make money for the operator, and some aircraft are better than others in doing this.

Let’s look at price, the SSJ is $35 million list price today, but discounts are huge around 45% off to Aeroflot, and surely 30% at least to Interjet so $24.5 million, that is a huge discount versus the $43 million for the 97 seat (2 class) Embraer E-190 list price and $40 million for the $40 million Bombardier 79 seat CRJ-900, it should be pointed out that both Embraer and Bombardier discount their aircraft, Embraer because it needs to sell 400 more E-Jets before the E2 models are ready for delivery while Bombardier needs to discount to US regionals to win over the E-175 in the battle in the 76 seat market (current pilot scope clause limit).

So on acquisition price we can assume an advantage for Sukhoi SSJ, by $ +/- 7.0 million per aircraft vs Embraer and Bombardier products. On the financing front, SuperJet International has arranged multi export credit guaranteed financing, using the export credit agencies of France, Italy and Russia to finance SSJ-100 sales. This is due to the fact that 70% of the content on SSJ-100 is non-Russian by value, from the SaM146 engine (Snecma/Safran of France), APU (Honeywell), fuel system (Zodiac), Hamilton Sundstrand (power supply system), Messier-Dowty (landing gear), B/E Aerospace (cabin, cockpit oxygen system), etc.

Another part of the life cycle costs that go against the SSJ-100 is residual value, and here UAC (United Aircraft Corporation) of Russia is offering residual value guarantees (RVG) on new jets, which will allow for the lowering of the lease rates. The RVG will kick in when a jet’s market value at the time of selling the aircraft is lower than the estimated one (roughly 60%), the difference will be compensated by the fund, as currently banks and lessors cannot calculate the residual value of a SSJ.

Presently AVN (Aircraft Value News) estimates the following on the SSJ, a E- rating is the worst one can get, as RV is just impossible to calculate:

2011 model, mid value $18.9 m, low value $15.1 m, high value $20.8 m, 2024 value of $10.3 m.

2013 model, mid value of $20.8 m,low value $16.7 m, high value $22.9 m, 2024 value of $11.7 m.

This export financing helps as does the RVG, BUT this is something that may end if the western countries move on the next round of sanctions against Russia, the ceasefire is holding in Ukraine for now.

On operating costs, I have what it costs per flight hour and per cycle for the main regional aircraft, CRJ-700/900’s and the E175/190/195’s, but little on the SSJ, other than fuel burn of 1,605 kg (543 USG) per hour or 2,284 Kg (748 USG) on a 500 nm sector, well I have the fuel burn numbers for the competitors:

  1. CRJ-900, 88 seat (CF34-8CB1) = 2,100 Kg (8% less fuel burn than SSJ).
  2. E-175, 76 seat (CF34-8E) = 2,016 Kg (11% less fuel burn than SSJ) with IP.
  3. E175-E2, 80 seat (PW1700G) = 1,875 (18% less fuel burn than SSJ).
  4. E190, 97 seat (CF34-10E) = 2,656 Kg (16% more fuel burn than SSJ) with IP.
  5. E190-E2, 97-106 seat (PW 1900G) = 2,231 Kg (2% less fuel than SSJ)

The SSJ does burn a bit more than current regional airliners and with the new PW1000G’s the SSJ will be at a major disadvantage, especially on a fuel burn per seat basis. Maintenance costs on the GE CF34’s is surely lower, it is a mature engine with millions of hours on it, versus the old generation Snecma SaM146 which is based on the CFM56 engine which is used by the classic B737’s which are all being replaced by the new PW1000G and GE Leap engines which are both advertising 10-12% fuel efficiencies versus existing engines and lower operating costs.

So with lower fuel burn and lower maintenance costs, the SSJ is surely more expensive per seat to operate than current Embraer and Bombardier products.

As for reliability, well Russian airliners were never built for high utilization rates, which today is a must for any new and expensive jet airliner. While Interjet and Sukhoi talk of 99% reliability, my investigation shows that this may not be the case. Most of the aircraft are in Russia where data is hard to find, but I have been able to SSJ-100 commercial service statistics by May 1, 2014 and it is not pretty for the trained airline analyst, this is NOT information Sukhoi should have released, its raises major red flags about the reliability and productivity of the SSJ :

  1. Interjet (MEXICO), 6 aircraft, 4,616 flights, 5,089 flight hours, monthly utilization per aircraft of 166 flight hours, flights per day of 5.1 and average flight 1.1 flight hours.
  2. Aeroflot (RUSSIA), 10 aircraft, 19,859 flights, 29,897 flight hours, monthly utilization per aircraft of 113 flight hours, flights per day of 2.5 and average flight 1.5 flight hours.
  3. Armavia (ARMENIA), 1 aircraft, 956 flights, 2,384 flight hours, monthly utilization per aircraft of 122 flight hours, flights per day of 1.7 and average flight 2.4 flight hours. BANKRUPT
  4. Yakutia (RUSSIA), 2 aircraft, 1,456 flights, 3,693 flight hours, monthly utilization per aircraft of 120 flight hours, flights per day of 1.6 and average flight 2.5 flight hours.
  5. Moskovia (RUSSIA), 2 aircraft, 513 flights, 1,258 flight hours, monthly utilization per aircraft of 93 flight hours, flights per day of 1.6 and average flight 2.3 flight hours. BANKRUPT
  6. Centre-South (RUSSIA), 1 aircraft, 29 flights, 79 flight hours, monthly utilization per aircraft of 59 flight hours, flights per day of 0.7 and average flight 2.7 flight hours.
  7. Sky Aviation (INDONESIA), 3 aircraft, 2,262 flights, 2,340 flight hours, monthly utilization per aircraft of 111 flight hours, flights per day of 3.6 and average flight 1.0 flight hours. BANKRUPT
  8. Lao Central (LAOS), 1 aircraft, 493 flights, 317 flight hours, monthly utilization per aircraft of 28 flight hours, flights per day of 5.1 and average flight 1.1 flight hours. BANKRUPT, but starting up again with 1 SSJ for now ?

It is totally unacceptable for a brand new $24.5 to $35.0 million regional jet to fly less than 250 hours per month (3,000 flight hours per year), its new, should be reliable enough for 10-12 hours per day as finance changes/lease payments will be anywhere between $208,000 to $300,000 per month, high utilization reduces the cost per hour of fixed costs. In this case flying 166 hours per month at Interjet can cost $1,255 per flight hour in finance/lease costs (assuming $208,000 per month), yet be only $833 per flight hour at 250 flight hours per month, a reduction of 33.6% in your finance/lease costs.

Anything less than 250 hours per month, is unacceptable, as it will drive CASM (costs per ASM) to be very high as an airline has many fixed costs, in this scenario, the reduction of $422 per flight hour in finance/lease costs by flying 250 instead of 166 can reduce CASM by 14% (e.g. $3,000 per flight hour to $2,578 per flight hour) that is a huge difference in CASM, and a large improvement in profit.


This aircraft went from bankrupt Armavia to now bankrupt Moskovia, who is next ?


An airline’s productivity is measured by ASM’s (available seat miles), so with a 93 seat SSJ-100, 250 hours per month, should generate around 111 million ASM’s per year, fly only 166 and its only 74 million ASM’s. If you have a yield of 14 cents and an average load factor of 75%, which is a PRASM of 10.5 cents your annual RPM will be 83.7 million at 250 hours per months versus 55.8 million RPM’s per month, so the difference in revenue per year is $7.8 million from an aircraft flying 166 hours per month versus $11.7 million for an aircraft flying at 250 hours per month. Now through in lower unit costs at higher aircraft utilisations, and you can see that CASM of 9.5 cents can be lowered to 8.17 cents (14%) just through lowering the finance/lease costs.

In the end with the above scenario, an aircraft flying at 250 hours per month can will have costs of $9.11 million versus $7.03 million for the 166 flight hours per month aircraft, but with more revenue the 250 hours a month aircraft will generate a profit of $2.6 million (11.7m – 9.11m), while the 166 hours a month aircraft will generate only $770,000 in profit (7.8m – 7.03m), a 246% increase in profitability-ALL ELSE being equal.

In short, there is something not right with the SSJ-100 utilization numbers, and no way can an airline make money at such low utilizations, which drive CASM up. Is it reliability ? support ? airline management ? whatever it is, from the above service statistics it is evident why 4 airlines have gone bust using the aircraft !

Anyway, politics will determine this “niche’ aircraft’s future, more sanctions on Russia will bring industry targeted sanctions not just the current one where individuals and specific companies are targeted. The Aerospace industry will be targeted, and that should end Sukhoi’s quest to break into the western market. Even without sanctions, the EU especially should not allow the SSJ-100 to be operated by EU airlines, like Belgium’s VLM which now plans to have theirs in 3Q/2016 and will fly from Antwerp to Geneva, Hamburg and Hamburg to Rotterdam, and the good people of the EU need to boycott any such operation, just NOT acceptable at this until Russia’s aggression against Ukraine and NATO cools down, too much at stake, WW III is not an option, re-drawing European borders is not an option either.

Thank you for reading my blog again, till next time


About Aviation Doctor - Helping aviation companies to transform the present into a more profitable tomorrow

I am a Canadian and EU national with an MBA and 33+ years experience in aviation business development with 20 years overseas and work in 30+ countries. A former investment/merchant banker (mergers and acquisitions to corporate turnarounds). airline and OEM senior executive and past owner of 6 successful aviation companies in 3 countries (executive jet charter/management companies, aircraft sales, aircraft broker, airline/aerospace consulting to aircraft insurance). I have a very diverse aviation background with 75+ aviation companies (50+ airlines of all sizes, OEM's, airports, lessors, MRO to service providers) as consultant, executive management, business analyst and business development adviser. Excellent success track record in International Business Development. Most work with airlines is with new start-ups and restructuring of troubled carriers. I sold new business jets, turboprops and helicopters for Cessna, Raytheon, Gulfstream to Eurocopter as an ASR as well as undertaking sales and marketing of commercial aircraft for Boeing, de Havilland, Dornier, Saab and Beechcraft. Brokered everything from LET-410's to B747's and from piston PA31 to G550 business jets. I look beyond the headlines of the aviation news and analyze what the meaning and consequences of the new information really means. There is a story behind each headline that few go beyond. Picked the name Aviation Doctor, as much of my work has been with troubled companies or those that want and need to grow profitably. I fix problems in the business for a better tomorrow. You can reach me with comments or suggestions at: Tomas.Aviation@gmail.com I write a lot of Articles and Posts on LinkedIN: https://www.linkedin.com/in/tomas-chlumecky-3200a021/


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