Earlier this month Russian Helicopters delivered the 3,500th helicopter of the Mil Mi-17 series. Assembled at the Kazan Helicopters plant, the machine is one of 151 that India has ordered. However, at the same time, tensions with Ukraine are threatening the supply of engines.

Russian governmental arms vendor Rosoboronexport secured an Indian MoD contract for 80 Mi-17V5s in 2008, and over the last two years has firmed up options for 71 more. Most recently, India decided to convert part of the order so as to have a dozen Mi-17s delivered in VVIP transport configuration for Indian government use after the deal with AgustaWestland for AW101s collapsed.

Customized for India, the Mi-17V5 features a KNEI-8 glass cockpit and PKV-8 autopilot, making India the first international customer for the glass-cockpit version. According to Russian Helicopters general manager Alexander Mikheyev, India operates nearly 250 Russian-made rotorcraft and uses them in governmental roles that include combat and training, search-and-rescue, medical evacuation and natural-disaster relief operations.

Russian Helicopters reported revenues for 2013 at 138.3 billion roubles (approximately $3.81 billion), just short of the forecast 140 billion), a 10-percent increase on 2012. Rotorcraft sales generated 115.8 billion roubles and services 29.6 billion. EBITDA rose by 27 percent, to 26.3 billion roubles, and profit to 9.5 billion roubles, a rise of 1.3 percent. During the year 275 of 303 helicopters produced were delivered, 15 fewer than in 2012. Nine types of rotorcraft were shipped to customers in 10 countries. The order backlog at year-end stood at 808. Manufacturing costs per helicopter rose by 6.5 percent.

Mikheyev says the company will continue its efforts to reduce manufacturing costs for better financial efficiency. Capital investments last year grew by 25 percent, to 16.2 billion roubles, including those in the manufacturing base, by 8.5 percent to 8.3 billion roubles. R&D allocations grew by 48.4 percent to 7.9 billion roubles. Russian Helicopters has long been planning an initial public offering but has postponed it several times since 2008 in a bid to raise more money by demonstrating sustained and profitable growth to the market.

Despite encouraging figures, the recent escalation of tensions with Ukraine poses a major threat to Russian rotorcraft production. Ukraine has traditionally supplied turboshaft engines for both Mil and Kamov designs. According to Vyacheslav Boguslaev, president of Zaporozhie-based engine manufacturer Motor Sich, the company produced 1,000 engines for helicopters last year and supplied most of them to Russian manufacturing plants in Kazan, Ulan-Ude, Rostov-on-Don, Kumertau and Arseniev. About a hundred Ukrainian-made jet engines, locally developed D436 and AI222 designs, went to Antonov and Yakovlev aircraft assembled in Russia.

Both India and China operate hundreds of Russian-made helicopters powered by Ukrainian engines. In the past month Ukrainian ambassador Alexander Shevchenko said that more than 1,500 Ukrainian-made engines are operational in India. That number includes TV2- and TV3-series turboshafts in Mi-8/17/35 and Kamov Ka-28/31 helicopters, as well as AI20-series turboprops in Antonov An-32 tactical airlifters.