Russia's commercial aircraft manufacturing industry is in deep crisis and will be unable to establish a significant presence in the world market in the near future, many experts say.

"There is no reason why we should play down the [seriousness of the] situation," said Yury Koptev, head of the Russian Aerospace Agency, which is in charge of the aviation and aerospace manufacturing sector. "The aviation manufacturing industry is in critical condition."

He said that inconsistent economic reforms, unfair privatization and the drying up of state subsidies to the industry have led to the dire situation.

Among companies now facing difficulties are such famed names as Tupolev – which owns the Voronezh Aviation Plant –and Ilyushin, which operates the Ulyanovsk-based Aviastar plant. Russian manufactures must compete with the world's two powerhouse airplane makers, Boeing of the United States and Europe's Airbus Industrie, among others.

According to Koptev, only 14 of 300 Russian manufacturing, research and design companies in the industry are making profits. Many of the remaining firms could collapse completely unless there is help from the state, he warned.

"If there's no support from the state, we will not only lose the industry, which would throw its 500,000 employees out of work, but eventually foreign carriers will take over the market," he added.

In 1990, Russia's aerospace industry– originally established to supply the Soviet military with its air power – accounted for more than a quarter of the world's aviation production and employed some 1.5 million people.

The civil aviation sector's output dropped dramatically in the 1990s, from 500 airplanes and 215 helicopters manufactured in 1990, to only 14 and 40, respectively, in 1998.

Many aviation plants are struggling with a shortage of work, with some operating at 10 percent of their capacity, industry observers point out.

The horizon looks cloudy in both the domestic and export markets, say experts.

At home, Russian airlines lack cash to buy new aircraft and there is no reliable leasing system that would allow them to acquire domestically made planes.

As for exports, Russia's prospects in the world market are grim, said an expert with the State Research Institute for Civil Aviation who declined to be identified.

Also, he added, the purchase of aircraft is often a political issue with Western governments, who pressure domestic airlines to buy locally made aircraft to help preserve jobs.

According to Julia Zhdanova, an industry analyst with the United Financial Group in Moscow, Russian aircraft manufacturers face a turbulent route in the world market.

She said that Russian airplanes still have a bad reputation and lack compatibility with some international standards.

"Russia might be able to supply non-high-tech components, but not entire planes," she said. According to Zhdanova, the Third World is the market to which Russian companies could increase exports in the near future.