Russian Military Aerospace Throttles Up, Eyeing Export Opportunities

Irrespective of how the war in Ukraine unfolds in the coming months, Russia is set to ramp up military aerospace activities and reassert its position in the export market.

Russia paused most arms exports after its invasion of Ukraine in February 2022 turned into a prolonged conflict. But increased military aircraft production coupled with sustainable—albeit not trivial—aircraft losses are allowing the country to shift its focus abroad again, as evidenced by the Sukhoi Su-57 fighter’s international air show debut in November at the China International Aviation & Aerospace Exhibition in Zhuhai.

• Tactical combat production has recovered from 2021 lows
• The R&D spending slump could spell trouble for Russian industry

Alexander Mikheyev, director of Russian arms export agency Rosoboronexport, said at the Zhuhai show that the first Su-57E export contracts have been signed.

Some analysts and Western officials argue that the poor showing of Russian equipment in Ukraine could hamper those export ambitions, but Moscow puts a different spin on the situation. Deputy Prime Minister Denis Manturov in September said that after prioritizing its own military needs, Moscow is ready to rebuild its export sector. “There is currently a huge demand in the world for our military products that have been tested in real combat operations,” he told a local newspaper.

Russian export efforts likely target countries that have backed its war in Ukraine, including China, Iran and North Korea. According to one observer, North Korean pilots are already in Russia learning to operate new combat aircraft.

Iran said in November 2023 that it planned to buy Sukhoi Su-35 fighters, Mil Mi-28 attack helicopters and Yakovlev Yak-130 jet trainers. The first trainer aircraft are already in the country, although the status of the remaining deliveries is uncertain.

Algeria, historically a top purchaser of Russian military hardware, could represent a test case of whether Moscow can regain export momentum beyond its closest war partners in the face of Western sanctions. Algiers could become the first export customer for Su-34E fighter-bombers.

Russia’s military aircraft production has recovered from a low in 2021 and is set to advance in 2025. Tactical aircraft production fell to about 14 aircraft in 2021 but has bounced back to roughly 3-4 times that number.

Moscow’s decision to strengthen its war economy is aiding that revival. Russia now spends about three times more on its military than it did in 2021. The country’s 2025 draft budget calls for national defense to make up 33% of all federal budget expenditures and 6.3% of GDP, although external sources estimate that number to be more than 8% of GDP.

A big issue for industry is Russia’s high inflation rate. That makes it hard for companies to take out loans to build the export equipment and then to service the loans before buyers receive and pay for that hardware. There are also longer-term concerns about Russia’s ability to develop next-generation systems and remain competitive.

In Ukraine, Russia is betting on both high-end and lower-end equipment. It is set to increase use of the Su-57 fighter and, despite an early loss, the Sukhoi S-70 Okhotnik stealthy uncrewed aircraft system. Moscow is also upgrading the UMPK bomb wing kits that give its aircraft standoff distance from Ukrainian air defenses, reducing losses.

Russia is poised to expand serial production of advanced missiles it has used extensively to strike Ukraine, such as extended-range Kh-69 cruise missiles. Another tactical aircraft weapon that might soon enter serial production is the supersonic Kh-41 air-to-surface missile, a higher-speed and longer-range version of the Kh-31. Moscow also appears close to introducing into service an improved version of the Vympel R-77M medium-range air-to-air missile.

The Russia-Ukraine war is also pushing Moscow to maintain mass production of loitering attack munitions, decoys and similar low-cost systems to sustain its waves of attacks on its neighbor. The conflict and pace of aircraft use are driving readiness spending as well. According to United Aircraft Corp. financial reports, production of spare parts for aircraft increased 80% in 2023 and 92% in just the first half of 2024.