FLUG REVUE update: Week ending November 18, 2001

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UPDATE

Week ending November 18, 2001

+++ Space ministers go forward +++ Lufthansa outlook unclear +++ EU against US airline help +++ EADS posts strong third-quarter +++ Strategic reorientation of Austrian Airlines +++ News in brief +++

Space ministers go forward
Die neuen europäischen Raumfahrtpläne

The ministers responsible for space affairs in the countries that make up the European Space Agency - its fifteen member states and Canada - concluded a two-day meeting in Edinburgh of the Agency's ruling Council by endorsing the next stages in a series of ongoing programs and committing to new initiatives that will help keep Europe at the forefront of space science and technology, Earth monitoring from space, telecommunications, satellite navigation, launchers, human spaceflight and planetary exploration. In particular ESA and its member states made significant progress on shaping a range of future- oriented programs, with major decisions aimed at enhancing Europe's role in the space sector. The Agency signaled its strong commitment to closer cooperation with the European Union. A first Resolution highlighting the importance of a balanced, ambitious space program serving Europe's citizens was adopted unanimously.
The members agreed on a Declaration embodying financial commitments for the development of Galileo, Europe's satellite navigation system. ESA now looks forward with confidence to EU transport ministers' approval of their contribution to Galileo at their December meeting. Galileo is a major component of Europe's transport policy and will be deployed in partnership with the business sector. It will offer a wide range of independent navigation services for commercial and private users and promises to generate new commercial services in areas such as road vehicle navigation and air traffic control.
Further collaboration with the European Union will focus on the Global Monitoring for Environment and Security (GMES) program, which will address such issues as global change, natural and man-made hazards, environmental trends and monitoring of treaty commitments. Earth observation is today an essential resource for surveillance of the environment and the management of natural resources. GMES and a number of other Earth observation projects were approved as the first elements in a series of applications missions under the Agency's Earth Watch initiative.
The delegations also decided to back a program that will see the Ariane launcher, which for many years now has held more than half the world market for commercial launches, evolve in terms of power and versatility. ESA is confident that Ariane will remain the world's number one choice for carrying commercial satellites into orbit. The European strategy for independent and affordable access to space is based on the provision of competitive European launch systems. The ministers stressed that to make that strategy work the right balance has to be struck between the respective roles, responsibilities and financial commitments of the public and private sectors. Restructuring of the launcher sector in Europe would be another key factor.

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Lufthansa outlook unclear
Krise tritt auch Lufthansa

"Business at the Lufthansa Group up to September 11 was fully in line with our expectations. Our original forecast projecting an operating result of between 700 and 750 million euros in the business year in 2001 was realistic," said Lufthansa Chairman and CEO Jürgen Weber at today's presentation of the Group's nine-month figures. "However, September 11 has changed the world. It has changed international air traffic more profoundly than any crisis before. What is urgently needed now is consolidation in the airline business and not attempts to employ subsidies to revise outmoded industry structures."
From January to September, the Lufthansa Group attained an operating result of 290 million euros, maintaining its leading role in the airline business. That figure is, however, well below the year-earlier 794 million euros in the same period, since business developments at the Group were gravely affected by the effects of the terrorist attacks in the United States and the worldwide economic downturn. Lufthansa is having to contend with a steep decline in demand accompanied by rising costs. Under the impact of the terrorist attacks, earnings in September alone were depressed by 180 million euros. Pre-tax profits at the nine-month stage totalled 246 million euros. The net profit after taxes came to 65 million euros.

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EU against US airline help
US-Hilfen für Fluglinien kritisiert

Francois Lamoureux, the European Commission's Director General for Transport and Energy met November 8 in Washington DC with US Deputy Secretary of Transportation Michael P. Jackson to discuss matters of common interest in the area of aviation. The meeting follows expressions of concern by EU Transport Commissioner, Vice President Loyola de Palacio, to US Secretary of Transportation Norman Mineta about the effect of recent US measures on the functioning of the transatlantic aviation market. On behalf of Loyola de Palacio, François Lamoureux expressed the concern that the financial support extended by the US government to airline companies should not translate into distortion of competition on transatlantic routes. Data made available by European airline companies fully justify the need for transparency and exchange of information. François Lamoureux suggested that a 'code of conduct' be put in place to facilitate administrative co-operation. Contacts will continue with a view to finding the appropriate responses. François Lamoureux also expressed the wish that measures taken by either side in the area of security be as coherent as possible. In this regard, the plan under discussion n Washington warrants some concern on the side of the European Commission. It has been agreed that a group will be formed to follow the evolution of this dossier in a permanent fashion.

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EADS posts strong third-quarter
Umsatzzuwachs bei EADS

EADS European Aeronautic Defence and Space Company is on track to achieve revenues and profit targets set for the current year, thanks to sound company fundamentals, despite the challenging market environment. The world's second largest aerospace and defence company announced on Tuesday strong third quarter revenues representing an increase of 26% to EUR 6.6 billion over the third quarter of last year. Excluding the impact of the first time consolidation of Airbus UK in 2001, this increase represents a rise of 9% compared to pro forma figures for the same period last year. Year-to-date revenues as of September 30 amounted to EUR 20.7 billion, up 30%. Excluding the impact of the consolidation of Airbus UK, nine-months revenues increased by 12%. This double-digit growth in revenues was generated through increased deliveries by Airbus, revenues growth in all divisions but Space, and the stronger US-Dollar.
Philippe Camus and Rainer Hertrich, CEOs of EADS, stated: "Our growth forecasts for the full year 2001 are confirmed by our third-quarter figures. We expect to achieve our 20% revenue growth target for 2001, despite a now more challenging global economic environment. The company is on track for an EBIT increase of 15% for the current year on the basis of 320 Airbus aircraft deliveries."
According to the CEOs, "the company's fundamentals remain sound. Following the events of 11 September, we have taken active company-wide measures to maintain profitability. These include: the freezing of Airbus production capacity at the current level; the hiring freeze at Airbus besides the A380 project; and the implementation of on-going cost savings plans. These steps, combined with our highly flexible production system, will allow us to be profitable even with significant variation in Airbus production rates."

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Strategic reorientation of Austrian Airlines
Austrian plant Sparmaßnahmen

In the Meeting of the Supervisory Board that took place on 12 November 2001, the Chief Executive Officer, Vagn Soerensen, presented an extensive programme for the strategic reorientation of the Austrian Airlines Group and a range of short-term measures designed to counter the present difficult economic situation of the Austrian airline companies. In future, the core objective of the Austrian Airlines Group will be to guarantee corporate stability and to achieve a lasting increase in market value. Absolutely central importance will be given to value orientation, something which will demand the intensification of those corporate activities that create added value and the ending of any and all activities that result in value reduction. As an independent, competition-oriented Austrian group of airlines that is synonymous with quality and profitability, the Austrian Airlines Group will draw added benefit from its own strengths and those of the Star Alliance. As the preferred airlines for business and tourist travellers in Austria and Central and Eastern Europe, and as quality partners in cargo business, the carriers of the Austrian Airlines Group will continue to work in a targeted way to build Vienna into the most efficient and competitive hub for connecting flights from and to the key markets. By pursuing eight main strategies, the Management Board of the Austrian Airlines Group is seeking to achieve a long-term strengthening of the Group: Value Orientation, Focussing of Operating Areas, Network and Market Strategy, Customer Positioning, Employee Strategy, Communications Strategy, Alliance Strategy, Core Competences.
The difficult situation of the Austrian Airlines Group resembles that being suffered by many other airlines at present. Worldwide, the industry has now reduced almost 200,000 job positions, over 800 aircraft have been grounded, and the total annual loss is expected to top USD 10 billion. Drastic measures are being taken everywhere in an effort to counter the consequences of the international drop in demand, which is equal to around 10% compared to last year. Following a fall in demand on scheduled services of 3.2 % in September, the Austrian Airlines Group reported a further reduction in passengers of 9.1 % in October. In the present economic environment, a range of short-term measures will also have to be taken in addition to the strategic objectives defined above. Such measures will need to have the effect of increasing revenues and reducing costs simultaneously, so leading to an improvement in volume of around Euro 260 million.

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NEWS IN BRIEF / KURZMELDUNGEN

With freight for space exploration on board, the "Beluga" transport aircraft of Airbus, took off from Bremen heading for Amsterdam. In its cargo hold was the Structure Test Model of the Unmanned Space Transport Vehicle ATV (Automated Transfer Vehicle) that will supply the International Space Station. The model was built by the Space Infrastructure Division of Astrium. After arrival at Amsterdam's Schiphol airport, the ATV "Spacecraft", consisting of the propulsion and avionics (on-board electronics systems) module, will travel on to Noordwijk by ship. Then the ATV spacecraft will be brought together with the Integrated Cargo Carrier (payload part) in the ESA test center ESTEC and subjected to extensive load tests as well as thermal and acoustic tests until the end of 2002. On behalf of the European Space Agency ESA, the Launch Vehicles Division of the EADS European Aeronautic Defense and Space company is responsible for developing the ATV and the Astrium Division Space Infrastructure is responsible for its production.
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JMC Airlines received its first Airbus A330-200, becoming a new operator of the A330/A340 Family. The arrival of the A330-200 into JMC marks a new area for the airline. It is JMC's first modern widebody aircraft and the platform on which the carrier will develop its long-haul services. JMC Airlines, which is part of the Thomas Cook group, will use the A330-200 to fly to holiday destinations such as the Caribbean Islands and the US east coast. Through this delivery Thomas Cook shows a clear commitment to JMC and its future. It also highlights the role of the A330-200 as the preferred aircraft of holiday carriers on long-haul routes. The A330-200 is leased from Tyco Capital. It is powered by Rolls-Royce Trent 700 engines.
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China Southern Airlines, the largest airline in The People's Republic of China is proud to announce its massive construction plans at the new Guangzhou Baiyun International Airport - which when completed may rank among the largest civil aviation projects in the world. At the groundbreaking ceremony Mr. Yan Zhiqing, Chairman, Southern Airlines Group outlined the extensive civil aviation project which is being constructed some 30 Kilometers north from the current Baiyun International Airport - all facets including the immense China Southern complex - is slated to open in October 2003:
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Boeing successfully completed an initial flight demonstration of its EA-18 Airborne Electronic Attack (AEA) concept aircraft. The test used an F/A-18F Super Hornet to carry three ALQ-99 jamming pods and two fuel tanks while measuring noise and vibration data and assessing aircraft flying qualities. The EA-18 is one of the platforms under consideration in a Department of Defense analysis of alternatives to replace the EA-6B Prowler electronic warfare aircraft. The U.S. Navy has an operational need to start replacing the Prowler by 2008. "The EA-18 will perform full-spectrum electronic surveillance and electronic attack of enemy threat radars and communications nets," said Paul Summers, director for Boeing's F/A-18 derivative programs. "The EA-18 leverages the U.S. Navy's investment in the F/A-18E/F Super Hornet platform and Northrop Grumman's Improved Capability III radar receiver system, which represents a significantly reduced risk approach over other unproven platforms and systems."
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Boeing and Airbus completed the second of two co-hosted Global Aviation Bar Code Forums to educate suppliers and airlines about the benefits and requirements of using permanent bar code identification on parts installed on commercial airplanes. At the first forum last month in Amsterdam and the second forum that ended yesterday in Chicago, both companies shared their progress and vision for permanent bar code identification on parts with airlines, aviation suppliers, third-party maintenance providers and military logistics interests. During the past year Boeing informed approximately 500 suppliers about the technologies available for bar coding commercial airplane parts. Airline customers wanted to increase the efficiency of their parts tracking and asked the two manufacturers to implement bar coding on line-replaceable units (parts replaceable during airplane line maintenance) and life-limited parts. These parts typically are included in an airplane's readiness log -- a listing of serialized components that are on the airplane at time of delivery.
+++
The new Board of Management of the Austrian Airlines Group, Niki Lauda and his private foundation have decided to settle all remaining unresolved points of dispute, and to work towards a conjoint solution. This agreement covers the following fundamental points: Austrian Airlines is to take over the private foundation's entire remaining interest in Lauda Air, meaning that AUA will now control approximately 99% of Lauda Air. Lauda Air is to withdraw from Lauda Air Italy. The three Boeing 767 aircraft that Lauda Air Italy has operated and leased from Lauda Air will now be transferred to Lauda Air Italy. Maintenance of the aircraft will continue to be guaranteed by Lauda Air in Vienna. Niki Lauda is to purchase one aircraft from the Executive Jet fleet of Lauda Air. All unresolved legal disputes are to be conjointly settled. It was agreed that further details of the agreements reached should remain confidential. Vagn Soerensen, Chief Executive Officer of the Austrian Airlines Group, had this to say of the settlement: "I am very happy that, working quickly and pragmatically, we have been able to arrive at a solution with Niki Lauda that is acceptable to all. We must now look forward and invest our energies in the future." Niki Lauda made the following comment: "We have drawn a line under this situation, and look forward to making a new start. I shall be doing everything in my power to support the success of the Austrian Airlines Group, and naturally that of Lauda Air."
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Raytheon Company announced that Robert L. Horowitz has been named chief operating officer of Raytheon Aircraft Company, reporting to Raytheon Aircraft Chairman and Chief Executive Officer Jim Schuster. Horowitz, a Raytheon Company vice president, was previously vice president of operations and quality for Raytheon's Electronic Systems business in El Segundo, Calif.
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A successful new qualification test firing of the SAAM/FR system took place in Toulon on 30 October, at the Naval Test Center (CEM). This firing, from the "Ile d'Oléron" platform marks the end of the qualification phase for the SAAM/FR. The firing simulated the missile intercepting a subsonic aircraft attacking at low altitude. The test results indicate that all the firing objectives were successfully achieved. All the system components were used in this successful firing. Fire control used the Arabel multifunction radar to detect the target and engage it using an Aster 15 missile fired from the Sylver vertical launch module. The Aster missile - self-guided in its terminal phase - intercepted the target 10 kilometres from its launch point and 15 seconds after launch. The C22 target simulated an aircraft travelling at Mach 1, 100 metres above water level. The SAAM/FR, SAAM/IT and SAMP/T programmes, including the Franco-Italian variant of PAAMS, are managed by G.I.E. EUROSAM, a joint venture between Aérospatiale Matra Missiles, Alenia Marconi Systems and Thales.
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The Minister of Defense, Federico Trillo-Figueroa presided over the delivery of the first CASA C-295 aircraft to Wing 35 of the Air Force at the air base in Getafe. Alberto Férnandez, chairman of EADS CASA, made the delivery of the first aircraft, out of a total of 9 units under a general purchase plan of the Ministry of Defense, to the State Commander of the Air Force. The planned performances of the ceremony included a flight exhibition of the CASA C-295 aircraft where it showed, once again, its brilliant performance with the execution of a series of what where spectacular maneuvers for an aircraft of these characteristics. The aircrew was composed of a mixture of pilots from the Air Force and EADS CASA.
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United Industrial Corporation announced that its AAI Corporation subsidiary has been selected by the Eurofighter Industry Consortium to provide Advanced Boresight Equipment (ABE) to harmonize operational EFA 2000 Typhoon aircraft. The contract, valued at $4.6 million, calls for the production of eight ABE systems to support Eurofighter EFA 2000 Typhoon aircraft flown by the air forces of Spain, Italy, German, and Great Britain. Delivery is scheduled to begin next year. The contract has potential for more than 30 additional ABE systems to support expansion of EFA 2000 Typhoon air wings over the next 10 years. The Eurofighter Industry Consortium previously purchased four other ABE systems to support harmonization during Eurofighter production in each of the four consortium member countries -- Spain, Italy, Germany and Great Britain.
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The following is a statement by NASA Administrator Daniel S. Goldin on the President's intent to nominate Office of Management and Budget Deputy Director Sean O'Keefe as his successor. "I would like to offer my congratulations to Sean as he begins the nomination process to become NASA's next Administrator. I look forward to assisting in the transition of my leadership of America's space program to Sean.
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The Interplanetary Monitoring Platform (IMP 8) spacecraft has retired after 28 years on duty being buffeted by the solar wind and zapped by cosmic rays. Launched on October 25, 1973, IMP 8 was built and operated at NASA's Goddard Space Flight Center in Greenbelt, Md., and provided important space physics data as part of NASA's Sun- Earth Connection research program. Last commands were sent to the spacecraft on Oct. 28. "We will miss IMP 8 because it reliably provided unique data for so long," said Dr. Joseph King, project scientist for IMP at Goddard. "However, due to the failure of the IMP 8 magnetometer during the year 2000, a senior review panel of Sun-Earth Connection scientists advised NASA's Office of Space Science management that continuing IMP operations may inappropriately divert funding from more science-effective missions."
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The Lufthansa "AIRail" pilot project has landed the European Intermodal Award at the "Intermodal 2001" in Hamburg. Lufthansa, which initiated the project in cooperation with German Rail, and the Fraport airport company in Frankfurt, won the prize in the "International Intermodal Transport Services" category. Among others on the jury were members of the European Commission and European Parliament. At the presentation ceremony, Wolfgang Weinert, Lufthansa Networking Systems Project Manager, underlined that AIRail is an essential element in Lufthansa's sustainability strategy. "With AIRail, we are the first in the world to realise the dream of seamless travel between rail and air. We are confident that the project will be successful," he said, highlighting the good cooperation between the project partners. "None of the three could have realised this project on its own." Since March 2001, Lufthansa passengers on the Stuttgart to Frankfurt route and back have been able to pick up their boarding cards at Lufthansa check-in counters at Stuttgart main railway station for all connecting flights at Frankfurt airport. Their baggage is through-checked to journey's end and all customs formalities are settled. "After handing in their baggage, passengers do not see it again until arrival at their final destination, be it in Europe, Asia or America. The train-to-plane service eliminates driving by road to the airport and raises travel quality by taking baggage off a passenger's hand," said Weinert, explaning the benefits. On the train, the passengers travel First Class in specially reserved seats and enjoy the complete Lufthansa service. With AIRail, travelling at "zero altitude" is convenient, reliable and fast.
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Unfavourable conditions for the aviation industry showed their effects also to the financial results of the Austrian Airlines Group for the three quarters 2001. In addition the awful terrorist attacks of 11 September have also had economic consequences of some magnitude for the Austrian Airlines Group. Furthermore various special factors had a negative effect: profits from the disposal of fixed assets were sharply down (EUR 6.9 million, after EUR 37.1 million), losses - the majority of which were not realised - resulted from the valuation of foreign currency liabilities at the reporting date. When adjusted to account for these special factors, the EBITDAR of EUR 207.0 is EUR 24.1 million above, the EBIT of EUR -19.3 million, by contrast, is EUR 36.1 million below last year. Profit before tax totalled EUR -75.0 million, after EUR -7.2 million last year. For the full year 2001 a profit before tax of approx. EUR -150 million is expected. Scheduled and charter traffic of the Austrian Airlines Group - Austrian Airlines, Lauda, Tyrolean Airways and Rheintalflug - showed 6,723,756 passengers, 1.6% more than in the corresponding period last year. The passenger load factor increased by 1.7 percentage points to 70.7%. Following the terrorist attacks in the USA, however, passenger numbers on scheduled services (-3.2%) and load factor (-4.5pp) fell sharply in the month of September. Cargo traffic was influenced by the slowing economy. With 87.320 tons figures were down by 5.3% compared to 2000.
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The first three U.S. Army Black Hawks slated for upgrade to the new UH-60M configuration have arrived here for teardown and evaluation at Sikorsky Support Services Inc. (SSSI), a subsidiary of Sikorsky Aircraft Corp. Sikorsky is a unit of United Technologies Corp.. The two UH-60As and one UH-60L mark the first aircraft officially inducted into the Army's comprehensive Black Hawk recapitalization program, which will eventually overhaul some 1,200 aircraft over 25 years. The rebuilt aircraft will have improved payload, new digital cockpit displays, a strengthened fuselage, new composite spar wide-chord blades, and more powerful engines. These recapitalized UH-60 aircraft will have an additional 20 years of service life with lower maintenance costs than the current fleet.
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Since 1 March 2001, the Bavarian Ministry of the Interior, the Bavarian Police Helicopter Squadron and the Military Aircraft Business Unit of EADS European Aeronautic Defence and Space Company have been working together under a cooperation agreement on the project AUTOPOL (AUTomatic Object Recognition for POLice Helicopters). This is a process by which the images recorded by the onboard infrared camera are scanned for predefined objects such as persons or vehicles, these being marked with appropriate symbols upon recognition. In an intensive trial phase using a demonstrator installed with the Police Helicopter Squadron at Munich Airport, the EADS-developed object recognition software was initially tested on the ground after each relevant mission, using the image data recorded on video cassettes.
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Gulfstream Aerospace Corporation, a wholly owned subsidiary of General Dynamics, in partnership with its Japanese trading company, Marubeni Aerospace, has been selected to supply two Gulfstream V special mission aircraft to the Japan Coast Guard. Gulfstream won the bid -- worth approximately $100 million -- in an open competition to provide Japan with an all-new ocean surveillance and rescue capability. In addition to the two aircraft, the program includes dedicated engineering support for modification and integration of the mission systems.
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A 55 million pound training facility for RAF Sentry E-3D (AWACS) aircrews, who have been taking part in operations against Taliban forces in Afghanistan, was unveiled. The facility, based at RAF Waddington, near Lincoln, has been developed to provide training for the Royal Air Force and French Air Force. Sentry E-3Ds provide early warning and fighter control systems and play a critical role in air-based military operations. Britain has seven E-3Ds and the French four, most of which are deployed across the
globe.
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Boeing established a new organization to coordinate its efforts in the expanding unmanned systems market, and named Mike Heinz to lead that organization as vice president and general manager, Unmanned Systems. Heinz, based in St. Louis, will report to both Jerry Daniels, president and chief executive officer of Boeing Military Aircraft and Missile Systems, and George Muellner, president, Boeing Phantom Works, the company's advanced research-and-development unit. "Unmanned systems are the future of aerospace," Daniels said. "We intend to lead the transformation they will bring by leveraging the best from across Boeing. That's what Mike's organization will do."
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United Industrial Corporation today announced that its AAI Corporation subsidiary has completed a series of major milestones in its ongoing work on the $106 million Tactical Unmanned Aerial Vehicle (TUAV) program for the U.S. Army. These include a group of highly successful demonstrations that exceeded expectations and have advanced the TUAV's development, from testing new technology and capabilities to demonstrating the TUAV system's interoperability with other systems. Among the highlights was the successful 5-day government-conducted test of the Operational Tempo (OPTEMPO) requirements of the TUAV system. The completion of this exercise, which evaluated the TUAV's ability to conduct surveillance over its target for a required period of time, helps pave the way for incremental contract awards as early as January 2002.
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