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“We are delighted that the decision has been made to produce regional jets, including in the Ulyanovsk special economic zone, and that a budget of seven billion rubles [$215 million] is envisaged for the purpose by a draft governmental decree,” the Ulyanovsk region administration quoted a Russian presidential envoy as saying in a statement.
A cooperation agreement was signed earlier this year in June between Russia’s Ural Civil Aviation Works, a subsidiary of state corporation Rostec, and Austria’s Diamond Aircraft International.
The special economic zone where the plant will be constructed is now being built at the Ulyanovsk-Vostochny international airport.
According to Boeing estimates, the number of passengers carried by Russian airlines rose 15.5 per cent to 74 million last year.
Russia, once a global aviation power, is facing huge challenges in transport links to its remotest areas.
There is a surge in demand for air transport in remote areas where there are no rail or road links, especially in Siberia.
Russian national carrier Aeroflot in October announced plans to launch a low-cost airline in 2014, aiming to make air travel more affordable in the world’s largest country with fares up to 40 per cent cheaper than its current prices.
The Russian government has made the revival of regional aviation services a key priority, and has started a programme to redevelop airports and subsidise air services.