Ural Works of Civil Aviation (UWCA) of Russia and Diamond Aircraft Industries (DAI) of Austria signed an agreement on Monday at the Paris Air Show to design and produce a series of diesel-powered 19-seat utility airplanes in Russia. The companies estimate that demand for these aircraft in Russia currently exceeds 200.

“Today, local aviation in Russia undergoes a severe crisis as there are no state-of-the-art, quality light airplanes of affordable prices,” said Sergey Chemezov, CEO of Rostec, which is planning to create a leasing program for the new aircraft. “Creating a principally new aircraft will fulfill this niche and allow to replace the obsolete fleet,” he said. UWCA is a subsidiary of Oboronprom, which is a subsidiary of Rostekhnologii State Corporation (Rostec), comprising more than 663 companies that are established in eight military-industrial and five civil-industry holdings.

“We would like to offer diesel-engine airplanes with airframes made of composite materials,” said Aleksey Fedorov, Rostec managing director of aviation projects. “They will be powered by kerosene jet fuel.”

DAI will facilitate the manufacturing of the airplanes while the Russian government restores the country’s airfield network and allocates subsidies to develop new routes. “It is generally recognized that the Russian market can be quite profitable once it is highly developed,” said Christian Dries, president of Diamond Aircraft.

In the first phase of the plan the aircraft and engines will be assembled in Austria. The second stage involves partial component production in Russia. Eventually, all the airplane components and diesel engines will be manufactured in Russia at UWCA facilities. The goal is to have the first Russian light-utility 19-seater in service in 2016.