.....Russia's recently rejuvenated aerospace industry has slightly better prospects than China's. It has a far richer aviation history--the world's first commercial supersonic airliner was Soviet-made--and is more prepared to share the risk with Western companies. Sukhoi, the company behind the Superjet-100 project, again a regional jet rather than a 150-seater jumbo, is 25%-owned by Italy's Finmeccanica and had a helping hand from Boeing during development. This will make the plane look more attractive long term, as services and manufacturing support are important parts of the equation that a purely Russian-made design might lack.
But Doug McVitie, managing director of consultancy firm Arran Aerospace, is also skeptical when it comes to the Superjet's commercial prospects. "The Russian design is based on a 40-year-old airplane, the McDonnell-Douglas DC-9," says McVitie. "It's like comparing a Lada to a Porsche." He also thinks that Finmeccanica's investment, as well as Italian airline ItAli's order of 10 Superjets, won't be enough to make the plane a big hit internationally.
Opinion is divided over how much opportunity there is for new players in the regional jet market. Teal Group's Aboulafia says there is a glut of regional jets, and that the segment has produced anemic growth, even in boom times. The more bullish McVitie expects annual growth of around 4% to 6% eventually from the segment, but doubts China or Russia will be able to capture it.
Analysts think a better model for China and Russia to follow is not an Asian tiger but an old-timer--Japan. Partly because of Japan's historic ties to America and Boeing, and partly because of sheer pragmatism, the country has spent decades building up partnerships and strategic alliances with outsiders and cultivated a diverse aerospace industry. This is part of the reason why McVitie thinks that a forthcoming regional jet from Mitsubishi Heavy Industries ( MHVYF.PK - news - people ), the MRJ, will do better than either Russia or China's offerings, and could potentially take the No. 2 spot from Embraer...
