Our company currently has some 160 aircraft in our portfolio: 130-140 of them are Antonov models and about 30 are from the Tupolev Tu-204 family. We are likely to keep this proportion in the future, as it reflects the market situation. There is not much demand for aircraft seating 210 passengers, at least not from our traditional customers. Therefore, our current focus is on jetliners in the 75- to 100-seat category, which are a great deal more popular at the moment.

Our plans for the next five years remain unchanged: we intend to move into the top 20 of the world's largest aircraft lessors. To get there, we need to have some 250-300 airliners in our portfolio, mostly Russian types. In essence, we must multiply our current 30 aircraft by 10. Such is the massive task we are facing. If we want to accomplish it, we must buy aircraft at a rate of 30 or even more a year. Of course, it will be difficult to meet this target in five years. Seven or eight years sounds more realistic. Nevertheless, our current plan is to achieve it in five years.

Ilyushin Il-96 production continues. We are now marketing the Il-96-400T freighter version. It has been in successful operation with Polet Airlines. This model had its fair share of teething problems with the powerplant and airframe, which are now being gradually rectified. The aircraft is entering normal operation. In general, it has lived up to the design specifications. Unfortunately, though, the Il-96 production rate is too slow - at just one or two airframes a year. We could be selling more of them but the VASO plant is backlogged for four years with orders both from ourselves and other customers, including the Russian Presidential administration. This is why we have now focused on other aircraft types.

We believe that further development of the Tupolev family is possible in the form of the Tu-204SM aircraft, which must be more advanced and more popular with carriers. The first prototypes are now being built, with the maiden flight scheduled for late summer.

We expect the Tu-204MS to be a good aircraft. As for its performance, we have to wait until the testing is over. I hope this model confirms its design parameters so we can market it, at least in the years preceding the Irkut MS-21.

I think that, if everything goes according to plan and the MS-21 project develops successfully, we may become United Aircraft Corporation's [UAC] partner in promoting the MS-21.

Our other field of interest is the general aviation/ business aircraft market. This segment is currently severely underserved in Russia, although there is huge demand. Unfortunately, there is nothing off-the-shelf in this niche. So far we are looking at proposals in the 10- to 50-seat segment, at the level of market studies. We consider both Russian-made and foreign-built aircraft - any aircraft in fact, because we feel this market is huge but there are simply no adequate products. These are the things we will be dealing with in the next eight years.

Our primary focus now is on the An-148 family, including the An-158 and An-168 models. I believe that in the foreseeable future, a freight aircraft will emerge on the basis of the An-148 - the An-178. If it proves a market success, I do not rule out a commercial application for this model.

At the 2010 Farnborough Airshow, Antonov is planning to reveal its new aircraft, the An-158. We expect to sign up for several such airliners and start marketing the model. We will keep buying Ukrainianbuilt Antonov aircraft and marketing them in Russia and other countries.

What is to be done to bring the An-148 to the level of a commercial product? I see three aspects here. The first one is the quality of production at the Voronezh VASO plant and its suppliers. We see the need for introducing automation of the riveting, casting and machining processes. Naturally, most thorough attention should be given to production tooling, for the purpose of considerably improving the assembly quality. All this can be done within a relatively short time. This task is essentially up to UAC.

The second aspect has to do with aircraft documentation. We need to work out a comprehensive MMEL (manufacturer's minimum equipment list) that would allow for transit flights with APU and other system-level items unserviceable. Corresponding work is now under way (and we have already settled the APU issue), but in the early days, such things seriously impeded effective operation of the type.

The third aspect is that we must complete the construction of a full-flight simulator. This is the most pressing operational concern today.

There is a significant shortage of An-148 type-rated pilots. As a result, the aircraft we have delivered to GTK Rossiya airlines are not being used to the best of their performance; they are not logging enough flight hours.

IFC has paid simulator specialist Transas Group a total of 300 million rubles [about $10 million] from its own budget for an An-148 simulator. It shall be a level D device with 3D visualization and full motion.

Now, we are seeking outside credit. We already have an approval from the credit committee of a large bank, one of Russia's top five. We are at the end of selecting a partner for the installation of the simulator, which is almost ready, albeit without a motion system. We hope to be able to install it this summer so that we can begin providing crew training services to airlines in autumn. Simultaneously, we will be working on a cabin simulator and a procedural trainer.

Where these simulators eventually will be deployed is not to be at our own training facility; rather, it will be a certified training center run at an airport. We are currently considering three locations - Pulkovo, Vnukovo and Domodedovo. Our role here is to procure the equipment, and the role of the training center will be to provide training services with the use of that equipment.

And there is also a fourth aspect. Additional spares inventories need to be set up at the base airports. IFC has prepared relevant proposals for Rossiya and other carriers. We believe that a consolidated spare parts pool must be set up jointly with UAC. Let's hope that the first phase of this effort will be finished this year.

It is now clear that support for operators must also be rendered at the airport level. This includes relevant certification of ground personnel and bringing in the minimum required equipment. An example would be buying An-148 tow bars and leasing them out to airports.

The initial An-148 operational experience met our expectations, although we had thought there would be fewer defects and teething problems. Nevertheless, in the words of Rossiya General Director Sergey Belov: "The An-148 has proved worthy of airline service". All four such aircraft currently in the Rossiya fleet are operable, they fly on scheduled passenger routes carrying passengers, each airframe making up to three flights a day. This is not bad for an all-new airliner that just entered revenue service.

On the other hand, we must keep working on the problems I have mentioned - crew training, further expansion of the number of airports that can accommodate the type, setting up an easily accessible spare parts pool at Pulkovo that could cater for any needs. We will work on this, but it requires financial resources. In fact, raising additional capital towards this end is one of the targets of our IPO plan.

We proceed from the premise that an IPO is integral to our further development. To implement it, we must first buy out shares from our largest private stockholder, the National Reserve Bank, owned by Alexander Lebedev. We are currently negotiating with them, and I hope that in the next month or so we will find a solution, and will make new proposals to Mr. Lebedev. We expect to attract at least $250 million, maybe even as much as $300 million. We will then look at the demand for our shares to decide what to do next. Anyway, we are not going to do the IPO until autumn 2010.

Our effective leasing rate stands at some 3-4 percent a year, which means it correlates well with the rates charged by foreign lessors. In this respect our proposals are competitive.

UAC is now preparing its ideas on this topic, including the introduction of a domestic aircraft subsidy system modeled on the Brazilian ProEx program. I personally think it would be better to leave everything as it is now. Where we really need an equivalent of ProEx is in exporting; in that area it could actually help encourage export sales. We hope that our current system is preserved, and that the effective rate will go down now that interest rates on the credit market have dropped.

The exports support program, on the other hand, truly needs to be modernized. It is built on different principles, and foreign crediting agencies today lend money at half our rate. So we now have certain problems exporting Russian products; the current system is not effective and requires interest rate subsidizing.