In the end of 1999 the latest crisis started in the Russian aircraft engineering corporation “MiG” when the major designers quit what suspended the most perspective military projects as multifunctional MiG-29SMT fighter and modernized MiG-31 interceptor. Contrary to the previous crisises caused by the fight between competing political, economic and bureaucratic groups the recent one will have consequences first of all in institutional and technological sphere.

The personnel crisis is a part of multifactor conflict that includes personal competition between the national aviation industry leaders supported by different political and bureaucratic groups, economic competition between “Russkaya avionika” and “MiG” Corp. for MiG-29 fighters modernization, conflict on MiG modernization technical strategy, infrastructure level, connected to the system crisis of the national aviation industry.

The phenomenon of different groups competition is the result of the oligarchic political and economical system, developed in Russia. Causing personnel and institutional instability it makes impossible to take rational decisions and seriously damages the economy and in particular the military-industrial complex. Using non-economic competition methods “Russkaya avionika” has the advantage in receiving the orders from the Defense Ministry. But only the choice of foreign clients defines the real competitive abilities of the Russian aircraft producers. The conflict between “Russkaya avionika” and “MiG” shows two visions of MiG-29 fighter modernization. The upgraded version can be demanded by the countries that already have our aircrafts at service.

But the market success of MiG-29 can be limited by the fact that by 2010-2012 American producers are to present the fifth generation light fighter that will make the forth generation aircrafts obsolete. Unfortunately this factor is underestimated by the Russian military industry that remains at least ten years behind the USA in developing the similar project. The question is whether it is rational for the long-term perspective to reject new projects in favor of out-of-date armaments modernization.

(To be continued)