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Introduction:Since its inception in the early 1930s, IRKUT Corporation (IRKUT) had traditionally
manufactured military aircrafts that constituted 90% of its total production. However, with
the collapse of the Soviet Union in 1991, the Russian government reduced its spending on
military aircrafts.
To sustain itself, IRKUT began to foray into the profitable commercial
aircrafts, although, the company's major revenue source was from jet fighters like Sukhoi-
30 and Sukhoi-27, which had total sales of $522 million and earnings before tax of $94
million3 in 2003. To fund IRKUT's product line expansion, President of IRKUT, Alexey I.
Fedorov (Fedorov), decided to launch IRKUT's IPO by the end of March 2004, the first ever
IPO in the defense industry of Russia.
Although in 2004, IRKUT had an export order worth
$4.5 billion from countries like India and Malaysia and it was planning to expand into the
US market. IRKUT's long-termvision was to make civil aircrafts an equal contributor to its
revenues by 2010, thereby reducing the dependence on military aircrafts.
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