Can Ukraine's Biggest Plane Maker Beat Lockheed Martin and the C-130?

By Markets Fool.com

Ukraine has lost Crimea, and much of its eastern border region as well, to invading troops from Russia. But could this beleaguered country soon book a win in the airplane market? Several recent news items suggest that it could -- and that it could do this at Lockheed Martin's expense.

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Antonov's new An-178 military transport. Image source: Artem Batuzak via Wikimedia Commons.

Last month, we relayed to you the shocking news that Ukraine had officially shut down its Antonov Aviation Concern (AAC), the holding company that owned the Antonov Company, which builds the world's largest transport aircraft. We also pointed out, though, that just because AAC is going out of business, this doesn't necessarily keep Antonov Company from continuing to build airplanes.

In fact, they're doing just that.

Call it "the Slavic C-130"
In particular, Antonov is continuing development of its vaunted An-178, a two-engine, short-range, medium-lift transport aircraft that first flew just last summer-- and is already winning admirers around the globe. Designed to replace aging An-26 "Curl" and An-32 "Cline" military transports, An-178 may also pose a threat to rival jets such as Alenia's C-27J Spartan, Embraer's KC-390, and even Lockheed Martin's own C-130.

The An-178 boasts the ability to carry up to 99 soldiers or up to 10 tons of cargo as far as 4,000 km unrefueled -- or to carry greater masses on shorter hops. In particular, Popular Science reports that the plane is capable of hauling an 18-ton armored personnel carrier such as a Stryker APC. Relative to Lockheed's C-130, that means An-178 can carry more troops, and only slightly less cargo.

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Like the C-130, Antonov's An-178 can both launch from and land on unimproved surfaces such as unpaved and gravel runways. Also like the C-130, the An-178 can be modified for missions including electronic warfare, aerial command, and airborne early warning. Like Lockheed's C-130, it offers designs tweakedfor every mission from surveillance to airborne refueling to gunship to Airborne Battlefield Command and Control Center (ABCCC). The AN-178 is a plane that could challenge Lockheed in many markets. In short, the An-178 is more than just a transport.

Instant popularity
As reported on airforce-technology.com, Antonov signed a deal with Abu Dhabi's Maximus Air Cargo to become the airplane's "launch customer." It's unclear how many Maximus will buy. But we know that Saudi Arabia has already signed on to buy 30 An-178s, and that Azerbaijan's Silk Way Airlines wants 10 more. China's Beijing A-Star Airspace and Technology Corporation is also interested -- in buying the plane, and getting a license to build it in China.

Thus, even with only one An-178 built so far, and no deliveries, the plane appears to have instant popularity among civilian operators, even before addressing the military market. But this plane looks admirably suited for a military debut as well. At a reported cost of just $45 million per plane, An-178 appears to be one of the cheapest planes in its class -- roughly half the cost of Embraer's KC-390, and just two-thirds the price of Lockheed Martin's C-130J variant.

An-178 appears to have just missed an appearance at Abu Dhabi's International Defense Exhibition and Conference last year. But we do know that Ukraine signed at least one significant defense equipment deal at IDEX last year. There's every possibility that, if Antonov brings the plane to IDEX next year,it could score its first military contract there.

How big of a deal is this?
With more than 400 units in service globally, the An-26 and An-32 -- two of the Antonov planes that An-178 could replace in world air fleets -- are already two of the top 10 most popular military transports. That fact alone suggests that Antonov's An-178 has a big "replacement" market ahead of it.

The multiple missions that An-178 is being touted for, meanwhile, suggest that Antonov may have even bigger markets in mind. Historically, Lockheed Martin's C-130 has always been the plane to beat in this class. The most popular military transport on the planet, there are nearly 1,000 C-130s in use around the globe today, in various configurations. Antonov would almost certainly like to get its hands on some of that market share, too.

Judging from the initial enthusiasm buyers are showing for its plane -- it just might succeed.


Antonov's An-124 Ruslan. The world's biggest mass production air transport. Image source: Dtom viaWikimedia Commons.

The article Can Ukraine's Biggest Plane Maker Beat Lockheed Martin and the C-130? originally appeared on Fool.com.

Rich Smithdoes not own shares of, nor is he short, any company named above. You can find him onMotley Fool CAPS, publicly pontificating under the handleTMFDitty, where he's currently ranked No. 270 out of more than 75,000 rated members.The Motley Fool recommends Embraer-Empresa Brasileira. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.