United Engine Corporation (UEC) intends to increase the price of SaM146, which powers Sukhoi SuperJet 100 (SSJ-100) aircraft, in order to compensate its losses. As a result the price of SSJ 100 jets will also be increased, Kommersant reports.

It is specified in the draft development strategy of UEC for the period until 2020. The engine is manufactured by PowerJet (joint venture between NPO Saturn and Snecma), but the authors of the strategy confirm that the signed contract is a losing one: the marginal losses of NPO Saturn in the network of SaM146 project almost reached 15 billion rubles in 2012.

The losses are connected with “disproportion in the area of income-splitting” between Safran (parent company of Snecma) and NPO Saturn, and high cost of production. According to UEC, Sukhoi Civil Aircraft Company (SCAC) pays 78 million rubles to PowerJet for one SaM146 engine. NPO Saturn gets only 17% - 13 million rubles (at that the cost of materials and direct costs are assessed at 28 million rubles), the rest 65 million are paid to Safran. The projected share of SaM146 engine in the total revenues of UEC in commercial engines segment (a total of 142 billion rubles) for the 2013-2020 period is 14% — about 20 billion rubles.

One of the measures for improving the UEC’s indicators is “increasing the price of SaM146 engines to break-even point”. UEC may also opt out of SaM146 program after completion of its main part and focus on military engines. The second scenario (UEC focuses on military engines while keeping a share in commercial engines segment) assumes preservation of SaM146’s serial production; however, NPO Saturn will reduce the production capacities involved and focus on gas-turbine power plants and components. Only the third scenario (“maximum backlog” in the civil and military segments) assumes expansion of the engine’s serial production.

UEC explains that abovementioned income-splitting is caused by the absence of certified Russian suppliers of the power plant’s most expensive components – engine nacelle and aggregates.

At that UEC assured that “the agreements with the airframer will not be reconsidered”. The SCAC’s business plan assumes the sale of 1000 SSJ-100 aircraft. According to UEC, the possible increase of the engine’s price is caused by the increasing demand for the aircraft.