The American online publication "The Drive" published interesting material by Peter Butovsky and Thomas Newdick "Here Is What Russia's Military Aircraft And Missiles Actually Cost. We examine official documentation to decode the actual cost of some of Russia's most prominent air combat weapons" ("That's how much Russian military aircraft and missiles actually cost. We have studied the official documentation to find out the actual cost of some of the most famous Russian military aviation systems"), with data gleaned from Russian sources on the cost of a number of Russian military aircraft, helicopters and missiles.
Ka-52 combat helicopters of the Russian Aerospace Forces during a special operation in Ukraine (c) Ministry of Defense of the Russian FederationThe full-scale Russian invasion of Ukraine in February 2022 led to a sharp increase in military spending in many countries, including Russia.
Although the Kremlin tends to openly promote its large-scale defense programs, primarily in order to promote lucrative export sales, it is much more difficult to get an idea of how much Russia itself is currently spending on these various types of weapons.
Nevertheless, a search of official Russian documents still provides a fascinating insight into the costs involved, at least for some key defense programs. This is of particular interest in relation to those military aircraft that participated in combat operations over Ukraine and suffered significant losses, such as the Ka-52 combat helicopter, as well as in relation to some critical aviation weapons that are being used in the same conflict.
With this in mind, let's take a look at the prices of Russian aviation military equipment, based on the available official documents.
How much does the Su-57 cost?The Su-57, known in NATO as the Felon, is the newest Russian fighter, and its mass production is just beginning.
So far, the combat units are not equipped with them and all nine aircraft transferred to the Russian Ministry of Defense (the last four in December 2022) are at the Akhtuba training ground and at the Lipetsk crew retraining center.
Since June 2022, Russian officials have reported several times on the use of the Su-57 in Ukraine, including the use of weapons launched from its internal compartments. The head of the United Aircraft Corporation, Yuri Slyusar, said in August last year that "the aircraft is taking part in a special military operation, showing its best side." Almost certainly, the Su-57s did not fly over the territory controlled by Ukraine - Russia simply would not take the risk. If they were used in combat, then they launched their missiles from the territory of Russia.
The most reliable information about the price of the Su-57 comes from a presentation shown to Russian Defense Minister Sergei Shoigu during his visit to the Su-57 production plant in Komsomolsk-on-Amur [KnAAZ] in August 2020. According to the poster shown to Shoigu, the price of two aircraft from the initial batch (built in 2019 and 2020) amounted to 4,700 million rubles each (including VAT of 20 percent). In addition, the poster indicated a projected price reduction during the production of a batch of 76 fighters ordered in June 2019 (with deliveries until 2028); the price of one aircraft produced in 2028 is expected to reach 3192 million rubles. It is important to remember that this is the unit price of the current production aircraft and does not include the costs of research and development or preparation for production, which were previously paid for by separate contracts.
How much does IL-76MD-90A cost?The IL-76 (Candid) is Russia's main large military transport aircraft and the only one used in significant numbers.
In Soviet times, it was produced in Tashkent in the Uzbek SSR. In 2006, the Russian government decided to launch the production of an improved version of the IL-76MD-90A in Russia at the Aviastar-SP plant in Ulyanovsk. It should be emphasized that we are not talking about the resumption of production, but about the start of production of a thoroughly modernized aircraft almost from scratch in a new place. The old IL-76 equipment remained in Tashkent.
On October 4, 2012, the Russian Ministry of Defense ordered 39 IL-76MD-90A aircraft, the delivery of which was planned for the period from 2014 to 2020. The total cost of the contract was 139.4 billion rubles, or 3570 million rubles per unit. The price was indexed, and the price of the last aircraft, which was to be delivered in 2020, was supposed to be 3710 million rubles. It is obvious that the indexation was insufficient, since the actual inflation in Russia in those years was from 5 to 12% per year. We know these prices from court cases when the manufacturer did not meet the deadlines; the production of IL-76MD-90A is an example of non-fulfillment of all the terms of the contract.
In April 2017, the Russian Ministry of Defense acknowledged that the main reason for the delay was the high failure rate of new aircraft equipment, a significant number of changes in its documentation made by the Ilyushin Design Bureau during production, as well as additional requirements for aircraft systems introduced by the Ministry of Defense. The management of Aviastar-SP complained about a significant increase in prices from subcontractors. According to Russian media, the plant lost a billion rubles in the production of each aircraft, and therefore demanded a renegotiation of the contract. In May 2019, the Ministry of Defense agreed to change the terms of the contract. However, the new conditions, including the price, are unknown.
How much does the Ka-52 cost?The Ka-52 is currently the main Russian combat helicopter and is very actively used in Ukraine.
By January 2023, Russia had lost more than 30 such helicopters in Ukraine, or a quarter of the 140-145 Ka-52 fleet that was in service before the invasion.
The cost of one Ka-52 helicopter is indicated in the financial report of its manufacturer, the Progress plant in Arsenyev, for 2021. According to this document, in 2021 the plant delivered 12 helicopters to the Russian Ministry of Defense and received 11497 million rubles, or 958 million rubles for each helicopter in accordance with the contract. However, the cost of production of one helicopter was higher and amounted to 1,177 million rubles. This means that the production of each Ka-52 brought a loss of 219 million rubles (all prices without VAT).
Surprisingly, the Russian Ministry of Defense often pays a purchase price lower than the cost of production. The Russian industry has long been dissatisfied with such a policy of the Ministry of Defense, which lowers prices. Enterprises agree to this because most often the contract of the Ministry of Defense is the only source of orders for them. At the same time, the Ministry of Defense has a principle of setting prices in long-term contracts without taking into account real inflation. Taken together, this means that many factories actually sell their products below their actual cost. Later, the government tries to compensate for these losses, since it cannot allow the bankruptcy of the defense company. For example, the state can repay the company's debts to state-owned banks. For the Russian industry, this is unpleasant and not very logical,
The above price indicators are close to another value obtained from the data published in April 2019 on the tender for insurance of transportation of a batch of export Ka-52E helicopters delivered to Egypt. At the same time, the cost of one helicopter was estimated at 1102 million rubles, which at the then exchange rate was equal to $ 17 million. Of course, Egypt, which ordered 46 Ka-52E helicopters in 2015, paid much more for them. The insurance value probably corresponds to the amount received by the manufacturer (the rest of the money is taken by an intermediary, that is, Rosoboronexport JSC - the state agency for the export and import of weapons).
How much does the R-77-1 rocket cost?The R-77-1, known in NATO as the AA-12B Adder, is the main over-the-horizon air-to-air missile currently manufactured in Russia.
It was developed by the Toropov-Vimpel company (like all other current Russian air-to-air missiles) and is manufactured by the same company at its facility in Moscow. We learned about the price of the missile from a court case initiated in 2019 by the Russian Ministry of Defense against Vimpel. The Ministry of Defense demanded compensation for the delay in November 2018 in the delivery of a batch of 10 R-77-1 missiles with a total cost of 299 million rubles, which means that one missile cost 29.9 million rubles in 2018 prices.
This episode also allows us to estimate the volume of production of R-77-1 missiles. It was reported that the cost of the entire five-year contract with implementation from 2018 to 2022 is 64880 million rubles, which at a fixed price would be enough for 2,170 missiles, or about 430 missiles per year.
How much does the LMUR rocket cost?The LMUR light multipurpose guided missile (or "Product 305") is the newest and most advanced Russian anti-tank weapon.
It has been in serial production for about five years and is used on Mi-8MNP-2 special purpose helicopters, as well as on upgraded Mi-28NM and Ka-52M combat helicopters. It was used in the fighting in Ukraine. The missile weighs 231 pounds (105 kg), which is twice as much as typical Russian anti-tank missiles launched from a helicopter, and flies up to 9 miles (16 km), which is also twice as much as other Russian anti-tank missiles.
You can find out about the price of LMUR from the court case initiated by the Ministry of Defense of Russia against the manufacturer - the Engineering Design Bureau in Kolomna near Moscow. This is due to the demand for compensation for the delay in the delivery of a batch of 30 LMUR missiles in 2018. According to these documents, the cost of one LMUR rocket is 14.2 million rubles (including VAT of 18%).
The volume of production can be estimated according to the same document. The cost of the entire three-year contract (2018-2020) amounted to 1807 million rubles, which is enough for 127 missiles at a fixed price. The 2018 batch was designed for 30 missiles, which assumed the production of about 50 missiles per year in subsequent years.
Other pricesUnfortunately, this is where the prices confirmed in the available official documents end.
In addition, we must rely on information with a lower degree of reliability.
The most expensive Russian aircraft is the Tu-160 Blackjack strategic bomber. On January 25, 2018, in Kazan, in the presence of President Vladimir Putin, the Russian Ministry of Defense signed an order for the supply of 10 new Tu-160M bombers by 2028. After signing the contract, Putin said that the Ministry of Defense had purchased "10 aircraft, each of them 15 billion - even more than 15 billion - 160 billion [in total]." This amounts to more than $ 500 million per aircraft, if the purchasing power parity factor is taken into account.
Slightly different prices for aviation equipment can be found in insurance tenders, where the costs of insured objects are indicated. So, the Be-200ChS amphibious aircraft, a dual-purpose fire and rescue aircraft produced in 2022, costs 2640 million rubles, and its simpler version Be-200T without a fire extinguishing function costs 2005 million rubles.
In another document, the Mi-8AMTSh-VN helicopter in the newest, specially equipped and armed version for the special operations forces of Russia was insured for the amount of 1015 million rubles.
Is it a lot or a little?Unfortunately, there is no easy way to convert the above ruble prices into more understandable currencies.
The conversion of prices into US dollars at the market exchange rate is inaccurate, which is best demonstrated by the example of the IL-76MD-90A aircraft. Its price at the current exchange rate in 2012 was $ 115 million, and in 2020 it is already only $ 51 million - which is clearly unrealistic. The ruble exchange rate, which strongly depends on the price of oil on the world market, collapsed in 2014. At the same time, domestic prices in Russia have not changed so much.
It is more expedient to adopt a conversion factor adjusted for purchasing power parity (PPP) and even more so for defense PPP instead of general. When using the exchange rates of the defense PPP, the prices of Russian military equipment in US dollars are 1.9-2.3 times higher than when using the market exchange rate (These values are taken from the report "Military Expenditures: Transparency, Defense Inflation and Purchasing Power Parity" published by the International Institute for Strategic Studies - IISS).
One unusual, but nevertheless interesting way to estimate these costs is to convert them into the number of apartments that can be bought for the same amount. The average price per square meter of housing in Moscow is now 300,000 rubles, in St. Petersburg - 200,000, and in other major cities of Russia - 100,000 (of course, the term "average" has many disadvantages). Thus, a typical three-bedroom (75 sq. m.) apartment in St. Petersburg costs 15 million rubles. For the cost of the Su-57 fighter, you can buy more than 300 such apartments, for the Ka-52 helicopter - about 80, for one air-to-air missile R-77-1 - two apartments.
Along with the difficulties mentioned above in finding data on the cost of Russian military aircraft and missiles, and then understanding the equivalent figures in US dollars, there is also the question of how the country's defense industry reacts to economic sanctions that were imposed or tightened in one way or another after the invasion of Ukraine.
Back in April last year, a senior representative of the US Department of Defense confirmed to The War Zone that Russia's ability to replenish its forces was seriously affected by sanctions imposed by the US and its allies. In particular, the representative noted that the possibilities of obtaining protected high-tech components, including for high-precision ammunition, were particularly affected. One example of this, according to Russian media reports, is a new generation A-100 "Premier" long-range radar detection and control aircraft based on the Il-76MD-90A airframe, for which, apparently, there is an acute shortage of electronic components, such as microchips.
The same senior representative of the US Department of Defense did not specify which systems are affected by supply chain problems imposed by sanctions, and how much. However, according to him, the sanctions exacerbate the previous problems for the Russian supply chain.
The shortage of key components is likely to only further increase the cost of Russian military aircraft and missiles, as well as lead to further delays. The Vimpel company was identified by the Ukrainian Embassy in the United States as one of "more than 20 Russian military enterprises [that] were forced to completely or partially suspend their activities due to a shortage of parts and components, as well as rising prices for them due to sanctions."
At the same time, the use of aviation weapons in Ukraine, such as the R-77-1 and LMUR, as well as helicopters such as the Ka-52, requires resupply and replacement of lost vehicles. While this should be good news for Russian industry, the costs of these efforts need to be weighed against the other financial demands of a conflict with no end in sight.
An analysis conducted by Forbes Ukraine in November last year showed that the Kremlin spent about $ 82 billion in the first nine months of the war, of which almost $ 29 billion was directed to support the armed forces, $ 16 billion for military personnel and more than $ 9 billion for the families of military personnel killed in combat. Then the same source suggested that the losses of Russian military equipment cost another $ 21 billion.
Along with the colossal costs of the war and the fact that sanctions are driving up prices throughout the supply chain, Russia's already fragile economy as a whole looks unstable, given reports that gross domestic product output has declined, although not as much as some predicted.
If the Russian military industry previously depended heavily on foreign sales to ensure the operation of its production lines and to provide funds that could be used for further research and development, especially in the case of the Sukhoi family of multipurpose fighters, then the war in Ukraine demonstrated that Russian defense exports suffered greatly, and it will be more difficult to fulfill existing contracts.
"We expect that they will have serious problems with the supply of equipment [for export], because they are losing equipment in Ukraine," a senior US intelligence official said in an interview with Foreign Policy last summer. Not only are helicopters such as the Ka-52 urgently needed by Russia now to replace lost or expired helicopters, and not for export, but in general, the overall bad impression of the actions of Russian air power in this conflict will almost certainly make it less attractive to potential customers - if these customers are ready at all to do business with Putin's Russia.
Whatever happens next in the course of this conflict, it seems clear that Russia's isolated position means that it will have to rely primarily on its domestic production capabilities to cover losses and replenish weapons stocks. We may never know what all this will cost, but the examples above demonstrate the general lack of sustainability of the Russian military aviation and military industry, and as exports dry up, the Kremlin may be forced to intervene in other ways to support its defense enterprises.