Once Ukraine gets Western fighter jets of 4+ generation, it will not only rise to a new level of warfare capabilities but also open broad prospects for the aircraft-making industry. It was mentioned not once, not twice that Ukraine's transition to Western aircraft is a long-term investment, therefore the issue of further development of this field of industry is more relevant than ever.
Denmark and the Netherlands are already poised to provide F-16 when Ukrainian pilots finish the training course. Maintenance, repair, and preserving combat readiness of this kind of equipment may become a serious challenge for Ukraine but also open new opportunities, as explained by Pavlo Verkhniatskyi, the director of COSA, a Ukrainian company that provides consulting services for international companies willing to enter a new market and specializes in compliance and strategic intelligence.
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The expert notes that production of components as part of international aerospace industry projects is one of the most promising fields of international cooperation between Ukrainian and foreign companies. Foremostly this is due to Ukraine having a great experience in this domain. Besides, Ukraine as a future operator of NATO standard aircraft will have to establish facilities for the maintenance and repair of the equipment supplied by Western countries. It will both allow Ukrainian businesses to acquire new competencies and open the doors for foreign partners.
"Manufacturers from those countries may be interested in accessing Ukraine’s resource base including titan, aluminum, uranium, lithium, etc.," Pavlo Verkhniatskyi notes, adding: "In a complex geopolitical environment, against the backdrop of trade wars, Ukrainian resources, especially the ones processed locally, can become an important leverage, or motivator, for foreign weapons manufacturers to enter our jurisdiction."
Director of COSA provided a few examples of successful cooperation of Ukrainian companies with big players of the industrial field. The expert pointed out that thanks to the correct approach of supporting local research and development programs, Boeing had found over a thousand skillful Ukrainian specialists from Progresstech-Ukraine. They work from Ukraine, contributing to various project design and engineering programs, including the Boeing 737 and prospective Dreamliner aircraft.
The state plays a prominent role in this process as it should ensure the favorable conditions for such cooperation, it applies not only to the mentioned research and development but also to international communication and state defense orders.
Another example is, without a doubt, the partnership of Ukraine and Turkiye in the domain of unmanned aerial systems production. Here we should recall that Turkish Baykar bears plans of opening a factory for making UAVs of the series TB2, Kizilelma, Akinci on the territory of Ukraine by 2025.
This partnership became possible due to the fact that engines for the mentioned aerial vehicles are supplied by Ukrainian companies Motor-Sich and Ivchenko-Progress, as well as the active support by the state government. The Ukrainian-Turkish agreement signed in February 2022 provided land benefits and tax incentives for the new drone-making enterprise and its investors.
Benefit policy may become one of the incentives that will attract international companies to the Ukrainian market, Pavlo Verkhniatskyi suggests. On top of that, the government should ensure easy access to resources, including convenient logistics, establish local manufacture of components, and develop a consistent system of state defense order, with understandable rules and requirements. Instead, Ukraine still lacks a strategy for defense industry development, the expert notes.
"The absence of a clear strategy of development even for specific enterprises in the industry. For example, it’s unclear why so much effort was put in the production of passenger planes when it was military transport aircraft that had an obvious competitive advantage on the international and domestic markets. Why channel resources into a demonstrably unscalable segment?"
One of the consequences of lacking a strategy for aircraft production development is the inconsistency of policies: large-scale projects emerged spontaneously but eventually "fizzled out" spontaneously, too, because of the absence of a clear vision of the goal, coordination between departments, or staff reshuffling. These and other issues are still among the reasons why foreign companies hesitate to enter Ukraine despite the prospects being great enough to welcome the world's defense giants.
We can see this trend on the example of joint initiatives of JSC Ukrainian Defense Industry with German Rheinmetall, BAE Systems, or even Lockheed Martin who is considering opening an F-16 maintenance and training center in Ukraine.
Full-length interview with Pavlo Verkhniatskyi, the Managing Partner and Director at COSA, in which we discussed what kind of prospects open up before international companies willing to enter Ukraine, what they should be aware of and what steps should be made by both the businesses and the Ukrainian government, is already available here.
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