FLUG REVUE update: Week ending February 1, 2004

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UPDATE
Week ending 1 February 2004

+++ Airbus beats Boeing in UK tanker competition +++ US Mars rovers update +++ New EU passenger rights opposed by IATA +++ CHC delivers AS 332L to Bundesgrenzschutz +++ New supplies for the ISS +++ Boeing results helped by military branch +++ Ryanair shars dive on profit warning +++ News in brief +++

Airbus beats Boeing in UK tanker competition
A330-Tanker für die Royal Air Force

The UK Ministry of Defence announced on 26 January that AirTanker Ltd has been judged the consortium most likely to offer a value for money Private Finance Initiative (PFI) solution to meet the RAF's future air refuelling requirement. The MoD will now enter into detailed negotiations with AirTanker, a consortium comprising Rolls Royce, EADS, Cobham and Thales, to validate its proposals for the Future Strategic Tanker Aircraft (FSTA) project. A final decision on whether or not to proceed with a PFI contract will not be taken until these discussions have been successfully concluded - a process that is likely to take a number of months.
The FSTA programme is planned to replace the RAF's fleet of VC10 and TriStar Air Refuelling / Air Transport aircraft. Under a PFI contract, AirTanker would own and maintain the aircraft and provide training services, while the RAF would be responsible for military operations. Geoff Hoon, Defence Secretary, said: "This announcement marks an important milestone on this major project. Our evaluation of the two PFI bids has been extremely thorough and has clearly identified that AirTanker's bid offers the best prospect of securing a value for money PFI service. This is, however, a highly complex PFI deal and a number of important issues remain to be resolved before we will be in a position to confirm the PFI route. We will now take forward negotiations with AirTanker aimed at concluding a PFI contract. We will need to ensure that the deal offers value for money for the taxpayer. Final decisions will not take place until the contract negotiations have been satisfactorily concluded."
Two consortia - AirTanker Ltd and the Tanker Transport Services Company (TTSC) Ltd submitted bids for this potential PFI contract last year. Under a PFI contract, AirTanker would own and maintain the aircraft and provide training services, infrastructure and some personnel, whilst the RAF would undertake military operations. A PFI contract offers the potential for the contractor to make use of aircraft not required by the RAF in peacetime to generate revenue through commercial use. AirTanker Ltd comprises Rolls Royce, EADS, Cobham and Thales. TTSC comprises BAE Systems, Boeing, Serco and Spectrum Capital.

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US Mars rovers update
Neues vom Mars

On January 29, NASA's Spirit rover on Mars has resumed taking pictures as engineers continue work on restoring its health. Meanwhile, Spirit's twin, Opportunity, extended its rear wheels backward to driving position last night as part of preparations to roll off its lander, possibly as early as overnight Saturday-to-Sunday. Spirit shot and transmitted a picture yesterday to show the position of its robotic arm. "The arm is exactly where we expected," said Jennifer Trosper, mission manager at NASA's Jet Propulsion Laboratory, Pasadena, Calif. It is still extended in the same position as when the rover developed communication and computer problems on Jan. 22. A mineral-identifying instrument called a Moessbauer spectrometer, at the tip of the arm, is positioned at a rock nicknamed Adirondack. Engineers have been carefully nursing Spirit back toward full operations for the past week. They are sending commands today for the rover to begin making new scientific observations again, starting with panoramic camera images of nearby rocks. Today's commands also tell the rover to send data stored by two instruments since they took readings on Adirondack last week -- the Moessbauer spectrometer and the alpha particle X-ray spectrometer, which identifies the chemical elements in a target.
Halfway around Mars from Spirit, Opportunity's lander platform successfully tilted itself forward by pulling airbag material under the rear portion of the lander then flexing its rear petal downward. "What this did is drive our front edge lower," said JPL's Matt Wallace, mission manager. "The tips of the egress aid (a reinforced fabric ramp) are now in the soil. That makes egress look perfect. It's going to be an easy ride." The rover also retracted a lift mechanism underneath the rover, to get it out of the way for the egress, or drive-off.
During Opportunity's sol 6, the martian day that started today at 10:26 a.m. PST, the rover will be commanded to lower the middle pair of its six wheels and to release its robotic arm from the latch that has held it since before launch.
NASA's second Mars Exploration Rover successfully sent signals to Earth during its bouncy landing and after it came to rest on one of the three side petals of its four-sided lander. Mission engineers at NASA's Jet Propulsion Laboratory, Pasadena, Calif., received the first signal from Opportunity on the ground at 9:05 p.m. Pacific Standard Time January 25 via the NASA Deep Space Network, which was listening with antennas in California and Australia.
"We're on Mars, everybody!" JPL's Rob Manning, manager for development of the landing system, announced to the cheering flight team. Opportunity landed in a region called Meridiani Planum, halfway around the planet from the Gusev Crater site where its twin rover, Spirit, landed three weeks ago. Earlier today, mission managers reported progress in understanding and dealing with communications and computer problems on Spirit.

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New EU passenger rights opposed by IATA
Neue Entschädigungsregelungen umstritten

The European Union has now completed the revision of the rules that define assistance to airline passengers in the event of denied boarding, delays and cancellations. According to IATA, the legislation misses its mark. The spirit is more punitive than compensatory, and it will actually have a negative impact on consumer-friendly fares and global interline tickets, comments Giovanni Bisignani, IATA Director General and CEO. As it stands, the new rules will not necessarily provide efficient consumer protection and are potentially very damaging to the industry. Our industry is fully committed to assist and compensate its passengers, but these rules are exceedingly complex to implement, impractical and likely to cause confusion.
The vast scope of the regulation addresses both denied boarding situations where a few passengers are involved, as well as cancellations and delays where all passengers on a flight must be assisted. This completely changes the context, and the provisions of the regulation are likely to lead to conflicts at airports, posing problems between passengers, airline and airport staff. The new rules fix financial compensation amounts that bear no relation to the ticket price. This costly measure will inevitably force up fares and choke the reduced fare market, which is not in the consumers interest, says Bisignani.
Another far-reaching stipulation requires the carrier to offer a choice of compensation options, including a return flight to the original point of departure. This effectively means that on a multiple-coupon ticket, a carrier experiencing a delay on one portion of the trip could be held responsible for the entire ticket. If airlines stop interlining to avoid this costly risk, the traveler will face repeated check-in, and baggage claim procedures at each stop and higher fares. Bisignani concludes, This legislation is not only impractical for the industry, but also particularly detrimental to the consumers interest. We do not see any comparable restrictions being placed on other modes of transportation. Certain articles need to be revised if we are to ensure the passengers best interest.

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CHC delivers AS 332L to Bundesgrenzschutz
Grenzschutz erhält neue Hubschrauber

On 27 January, CHC Helicopter Corporation announced that its operating division Astec Helicopter Services of Stavanger, Norway, has signed a contract with the German Ministry of Interior for the provision and upgrade of 10 Eurocopter AS332L helicopters. This contract which was signed with helicopter manufacturer Eurocopter as co-contractor, will involve the sale and modification of five AS332L helicopters from CHC's European operations, and the modification of an additional five AS332L helicopters from Eurocopter during the contract period. These helicopters will be extensively modified and upgraded by Astec Helicopter Services and Eurocopter jointly to provide The Bundesgrenschultz (German Frontier Guard) with two different finished versions of AS332L1 helicopters to support maritime and police operations. The total value of CHC's portion of the contract is approximately $CDN 64 million. The contract will commence in April 2004 and be completed by 2007. A portion of the proceeds from the sale of the aircraft will be applied to CHC's successful fleet renewal program in Europe, allowing CHC to continue to offer its customers the most modern, advanced civilian helicopters available.

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New supplies for the ISS
Progess-Start zur Raumstation

Europe's scientific utilisation of the International Space Station (ISS) took an important step forward with the launch of an unmanned Russian Progress cargo spacecraft at 12:58 Central European Time (16:58 local time) from the Baikonur Cosmodrome in Kazakhstan. The Progress supply vehicle will take two days to reach the International Space Station, carrying experiment hardware for the Delta mission to be carried out by ESA's Dutch astronaut André Kuipers in April, Matroshka, a European experiment facility for measuring radiation levels to which astronauts are exposed in space, and hardware to allow the European Automated Transfer Vehicle (ATV) to dock with the Station.
Launched by a Soyuz rocket on mission 13P, the Progress spacecraft with the serial number M1-11 is due to dock with the International Space Station on 31 January at 14:19 Central European Time. The Progress-type spacecraft are currently serving as supply vehicles for the International Space Station and are also uploading European hardware and equipment in advance of European missions to be carried out on the International Space Station. Among other cargo, Progress is transporting scientific equipment which will be used during the upcoming Delta mission (Dutch Expedition for Life science, Technology and Atmospheric research). André Kuipers, who on 19 April flies out to the ISS on a 10-day mission, will be employing this equipment to carry out a programme of scientific and educational activities.

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Boeing results helped by military branch
700 Mio. Dollar Gewinn für Boeing

Boeing reported a net income for 2003 of $0.7 billion, or $0.86 per share, on revenues of $50.5 billion. The results include a $1.01 per share non-cash charge to revalue goodwill balances in the first quarter and a $0.87 per share gain related to a federal tax refund in the fourth quarter. "This past year was notable both for the solid performance turned in by most of our businesses, as well as the challenges we faced," Boeing President and CEO Harry Stonecipher said. "Integrated Defense Systems delivered strong fourth-quarter operating performance and over $50 billion of new orders for the year, which strengthen our revenue outlook going forward. Despite the most severe market challenges our industry has faced, Boeing Commercial Airplanes continues to perform well in terms of productivity and profitability. With the Board's approval to begin selling the 7E7, we are well positioned as the industry recovers with an airplane we believe will provide significant benefits to airlines and passengers," he added.
"While there is no doubt that the emergence of ethical issues during the year was deeply disappointing to all of us, I feel strongly that we acted quickly and aggressively to address the issues," Stonecipher said. "As we move into 2004, our focus is on execution, demonstrating our commitment to integrity, and raising our performance to a new level." The Company's 2003 earnings from operations of $0.4 billion reflect lower commercial airplane deliveries, commercial space charges, lower pension income, and the revaluation of commercial financing and goodwill assets. These factors were partially offset by continued growth and strong operating performance in the Company's portfolio of defense businesses and by continued improvements in operating efficiencies at Commercial Airplanes. Excluding the goodwill impairment charges reported earlier in the year, adjusted earnings from operations* were $1.3 billion for 2003. Cash flow remained strong as the Company generated $3.6 billion and $3.9 billion of operating cash flow for the fourth quarter and the full year, respectively. Discretionary cash contributions to the Company's pension plans reduced operating cash flow for 2003 by $1.7 billion, but were partially offset by a $1.1 billion dollar tax refund received in the fourth quarter.

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Ryanair shars dive on profit warning
Aktiencrash für Ryanair

Ryanair released financial results for the quarter ended 31 Dec'03 showing record profits and traffic figures, whilst passengers benefited from fares which were on average 11% lower than the equivalent period last year. Traffic for the quarter grew by 54% to 6.1m, whilst average fares declined by 11%. Total revenues rose by 37%, operating costs rose by 42% - significantly less than the rate of traffic growth - as unit costs fell by 8%, whilst after tax margins declined from 23% to 19% for the quarter. Adjusted net profit after tax rose by 10% to Euro 47.5m.
As we have consistently highlighted in previous quarterly statements, we remain very cautious in our outlook for fares and yields. Based on initial bookings for the first three calendar months of 2004 (Q.4 of 2003/04) we now expect that yields during this final quarter may decline by between 25% to 30% over those recorded in the comparable quarter last year. These reductions in fares are significantly greater than the 10% to 15% range recorded over the first three quarters. If these lower fares and yields occur (bearing in mind we have not completed even the first month of this quarter) then we would expect net profit before exceptionals for the fiscal year to reduce by up to 10% from a net profit of Euro 239m last year to approximately Euro 215m for the current fiscal year.
“There is therefore considerable downward pressure on fares and yields as many of these loss making airlines try to compete and survive. Despite this difficult market Ryanair continues to profitably develop new routes, new bases and grow market share. In many cases Ryanair is leading the downward pressure on prices and yields, but unlike our competitors we continue to generate world leading profit margins as a result of our aggressive cost management and lowest cost base. “Ryanair's strategy continues to be successful all over Europe. Traffic has grown by over 50% so far this year. We have launched 4 new bases in Europe, and 73 of our 146 routes are in their first 12 months of operation. While we now expect after tax profits for the current year to dip slightly, our annualised profit margin will still be in excess of 20% and Ryanair will continue – by some considerable distance – to be the world's most profitable airline by margin.

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NEWS IN BRIEF / KURZMELDUNGEN

The Czech Deputy Prime Minister and Minister of Interior, The Honorable Stanislav Gross, dedicated, in Prague, the first of a total of eight Eurocopter EC 135 light twin helicopters to service with the Czech Police Aviation Department in Prague today. This first aircraft will be used for helicopter emergency medical service (HEMS) missions. In line with the Czech Republic's "Integrated Rescue System" for the country's rescue and security services (HEMS, Police, Fire Fighting, Mountain Rescue and SAR), three of the eight EC 135s will be HEMS-equipped, four are tailored for police missions such as surveillance, anti-terrorist and crime-fighting engagements, and one will be reserved for flexible-response, "universal-mission" operations with quick interchangeability of interiors and equipment. In addition to the helicopter inaugurated today, two more will be delivered in 2004, two in 2005 and one each in 2006, 2007 and 2008.
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A Lockheed Martin/Northrop Grumman team has been awarded one of two industry contracts valued at approximately $472 million to enter the Risk Reduction and System Definition phase of the U.S. Air Force's Transformational Communications MILSATCOM (TCM) Space Segment. TCM will provide thousands of users with significantly improved, highly mobile, beyond line-of-sight protected communications to support the future battlefield. Under the contract awarded today by the MILSATCOM Joint Program Office, Air Force Space and Missile Systems Center, at Los Angeles AFB, Calif. two industry teams will conduct risk reduction demonstrations and system trade studies over a 27-month period. This effort will culminate with a multi-billion dollar development contract to be awarded to a single contractor in 2006.
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Raytheon has received a contract from Bulgaria's Air Traffic Services Authority (ATSA) to upgrade the country's FIRST Air Traffic Control (ATC) simulator to the FIRSTplus Integrated ATC radar and 2D tower simulator. Bulgaria ATSA purchased Raytheon's "FIRST" ATC radar training simulator in 1994. ATSA has commissioned Raytheon to upgrade its current active system to the FIRSTplus ATC training system, which will include a total of nine training positions. It will provide advanced ATC simulation for radar, 2-D tower application, and ground and advanced airport surface detection equipment training. Raytheon will provide hardware, software, training and support to upgrade and integrate the system, allowing for an easy transition for both ATSA staff and students.
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After much anticipation on the part of the aerospace industry, the U.S. Department of Defense (DoD) has approved the participation of all U.S. military services at the 2004 Berlin Air Show. The decision by the DoD highlights the importance of the transatlantic relationship with Germany, Europe, the NATO partners and the eastern European countries that will soon become members of an enlarged EU and NATO. Aerospace companies on both sides of the Atlantic stand to benefit greatly, while their international and European counterparts will have an opportunity to see displays of the latest U.S. technology that would not be possible without the commitment of the DoD. The U.S. military presence will enhance the already exciting flight program planned for ILA2004. Not least, the Berlin Air Show will benefit from U.S. participation at one of the most important events in the aerospace industry this year.
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Bombardier Aerospace announced that Mesa Air Group, Inc. of Phoenix, Arizona has placed a firm order for a total of 20 Bombardier CRJ700 and CRJ900 regional jets. The mix of models will be determined at a later date. The order is valued at an estimated $637 million U.S. ($837 million Cdn.) and represents the conversion of 20 of the 40 options that Mesa holds on the Bombardier CRJ700 and CRJ900 aircraft. Mesa Air Group currently operates 69 Bombardier CRJ aircraft including 43 CRJ200, 15 CRJ700 and 11 CRJ900 aircraft. In addition a further 11 CRJ200 from Midway Airlines will soon join its fleet. When the delivery of this recent order is complete Mesa Air Group will operate some 114 Bombardier CRJ aircraft and will have options on another 20 regional jets.
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The Northrop Grumman-built Fire Scout vertical takeoff and landing tactical unmanned aerial vehicle system has officially lifted off as the Class IV unmanned aerial system (UAS) for the U.S. Army's Future Combat System (FCS). Northrop Grumman received an eight-year, $115-million contract for the program's system development and demonstration phase from The Boeing Company and Science Applications International Corporation, the Army's FCS lead systems integrators. During this phase, Northrop Grumman's Integrated Systems sector will develop the Class IV UAS architecture, produce seven RQ-8B Fire Scout air vehicles, perform system tests and evaluations and help develop long-lead future requirements.
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Raytheon reported income from continuing operations of $535 million or $1.29 per diluted share compared to $755 million or $1.85 per diluted share in 2002. Income from continuing operations in 2003 was negatively impacted by performance issues in the third quarter at Network Centric Systems ($187 million or $0.32 per diluted share) related to cost growth on risk programs identified earlier in the year and increased non-cash pension expense of $319 million or $0.54 per diluted share. Including the impact of discontinued operations, the Company reported 2003 net income of $0.88 per diluted share compared to a net loss of $1.57 per diluted share in 2002. Total 2003 sales for the Company were $18.1 billion compared to $16.8 billion for 2002, an increase of 8 percent. The full year results include $384 million of sales resulting from the previously announced consolidation of Flight Options. Government and Defense sales for the year (after the elimination of intercompany sales) increased 7 percent to $15.5 billion from $14.5 billion in 2002.
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Boeing announced the successful launch of a missile defense interceptor boost vehicle from the Ronald Reagan Missile Site, at Kwajalein Atoll in the Republic of the Marshall Islands, at 9:23 p.m. EST. During the test, which is part of the Ground Based Midcourse Defense (GMD) program and called Integrated Flight Test-13B, a developmental, three-stage booster vehicle traveled from the launch site to a simulated intercept point about 800 miles away over the Pacific Ocean. “The successful completion of IFT-13B moves the Boeing-led GMD team one step closer to delivering the nation's first defense against the ballistic missile threat,” said Boeing Senior Vice President and General Manager of Missile Defense Systems James Evatt. “It's making the government's commitment to protect the U.S. homeland, forces overseas and friends and allies a reality.”
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FLIR Systems announced that it has entered into an agreement with Max-Viz to act as the exclusive distributor of Max-Viz's Enhanced Vision Systems (EVS) for use in selected rotary wing aircraft applications worldwide. "The EVS products designed by Max-Viz offer an effective solution to improve visibility in difficult environments," said Andrew Teich, FLIR's Senior Vice President of Sales and Marketing. "We are pleased to be working with the Max-Viz team on this important product." "FLIR's selection of our EVS products is another validation of our technology and a major step in the development of our company," said Roger Watson, Vice President and Chief Design Officer of Max-Viz. "This partnership allows us to take advantage of FLIR's strong worldwide distribution channels and superior reputation in the military and government helicopter market."
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In the course of requirements planning for Armed Forces XXI, the SA316B Alouette III fleet of the Swiss Air Force will be reduced by 32 helicopters until end of 2005. The majority of these will be canibalized to provide spare parts for the remaining fleet. A certain number of Alouette III helicopters and associated equipment are put up for sale. Since these helicopters are not approved for civilian operations, appropriate modifications and certifications need to be done for this purpose. In January 2004 the first "civilized" ex-Luftwaffe Alouette III could be handed over successfully to the customer.
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The capabilities of the first parabola antenna for the SAR-Lupe satellite reconnaissance system have been successfully demonstrated. In fact, Saab Ericsson, Göteborg, which developed and constructed the more than 3 m high parabola antennas on behalf of Bremen-based space technology company OHB-System AG, managed to exceed the target parameters. "We are very satisfied. The date for this milestone was defined two years ago and has been kept in spite of a very tight schedule," says SAR-Lupe project manager Dr. Ingo Engeln, who witnessed the testing in Göteborg. The antennas act as the "eyes" of the total of five identical satellites. When a satellite records a radar image, the radio waves are bundled via these antennas, transmitted and received again. The echo data collected is stored and processed by the radar system and the radar images sent to the ground station.
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Lufthansa Technik has made an additional equity investment and taken a majority position in the ownership of industry leading spare parts provider AirLiance Materials. Prior to the additional investment, Lufthansa Technik owned 41% of the company with the remaining percentage split between United Airlines (41%) and Air Canada (18%). The additional equity investment, which was approved by all shareholders and Management, gives Lufthansa Technik just over 50% equity in the venture with the remaining interest split between United Airlines and Air Canada. In a related statement, David Sisson, AirLiance Materials President and CEO said "AirLiance has achieved year after year revenue growth of 34% and the increased support from Lufthansa Technik will give us the opportunity to further increase our market share and expand our revenue stream. Lufthansa Technik is the largest independent MRO provider in the world and we are delighted that our relationship with them will be further enhanced." AirLiance Materials was formed in 1998 as a joint venture between Lufthansa Technik, United Airlines and Air Canada and has grown rapidly to become one of the top three providers of surplus material to the world's MROs.
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The NASA X-43A hypersonic research vehicle and its Pegasus booster rocket, mounted beneath the wing of their B-52 mother ship, had a successful captive-carry flight Jan. 26, 2004. A dress rehearsal for the subsequent free flight, the captive-carry flight kept the X-43A-and-Pegasus combination attached to the B-52's wing pylon throughout the two-hour mission. The flight originated from NASA's Dryden Flight Research Center on Edwards Air Force Base, Calif., flying over the Pacific Missile Test Range, and back to Dryden. "The flight went very smoothly. Our only concern was potential turbulence at high altitudes but as it turned out we didn't have any," said Paul Reukauf, Dryden's X-43A deputy project manager. "We met all our objectives for the flight now."
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With nearly 24.2 million passengers in 2003 – an increase of more than 1 million over the previous year's level – and approximately 343,000 take-offs and landings, Munich Airport set two new records in commercial air traffic in the past operating year. Passenger traffic was up 4.4 percent as compared with 2002, and the number of flights increased by 3.7 percent. Airfreight operations reported a slight gain of 0.5 percent. The total airfreight handled – including trucked goods – amounted to 247,000 metric tons. These results prove that Munich Airport was able to overcome generally bleak economic conditions to maintain its well-established growth path. While many other European air transport hubs reported stagnating or even declining passenger figures, Munich was among the few airports in Europe's top ten to achieve significant growth. This performance enabled Munich to move up again in the rankings of Europe's busiest airports to secure place number eight. At Munich Airport's annual press conference, Dr. Michael Kerkloh, CEO of the airport operating company, again stressed the importance of the airport expansion carried out in 2003. He described the start of operations of Terminal 2 on June 29, 2003, as a “historic departure point in Munich Airport's development, " adding that the "opening of Terminal 2 last summer has now firmly positioned our airport as a state-of-the-art air transport hub for connecting flights to destinations all over the world.”
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The Norwegian Ministry of Defence has selected the Javelin weapon system, manufactured by the Raytheon-Lockheed Martin Javelin Joint Venture, as its medium-range, anti-armor missile. This marks the fifth country to have selected Javelin in 2003, including the United Kingdom, Australia, New Zealand and Ireland. The contract, valued at approximately $86 million, calls for 526 missile rounds and 90 command launch units (CLUs), along with trainers, contractor logistic support and spares. Delivery is scheduled for mid-2006 to mid-2007. The announcement concluded a 15-month competitive procurement that pitted Javelin against a competitor with similar capabilities, and included very demanding head-to-head performance testing.
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The Transatlantic Industrial Proposed Solution (TIPS) industries concluded more than three months of coordinated efforts with the recent submission of their NATO Alliance Ground Surveillance Definition Study Report. The TIPS industries also briefed NATO AGS on specifics of their study.
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A landmark bill giving NASA greater flexibility to restructure and revitalize its work force cleared its final major hurdle today after being passed by the U.S. House. The NASA Work Force Flexibility Act of 2003 (S. 610, H.R. 1085) will be presented for the President's consideration. The U.S. Senate passed it in November. Sponsored by U.S. Senator George Voinovich (R-Ohio) and U.S. Rep. Sherwood Boehlert (R-N.Y.), the NASA Work Force Flexibility Act of 2003 builds on existing law. Among other reforms, it provides the agency additional tools to address the challenges of the 21st century. It provides NASA the ability to improve recruitment and retention, and to compete with the private sector.
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Lockheed Martin has upgraded two Spanish Navy SH-60B MKIII Light Airborne Multi-Purpose Systems (LAMPS), successfully completing a four-year, $55.4 million program to provide Spain with new state-of-the-art maritime helicopters for shipboard deployment. Lockheed Martin, working with Sikorsky Aircraft Corporation and subcontractor TECNOBIT of Valdepenas, Spain, performed the upgrades at Rota Naval Base in Cadiz, Spain, completing the first upgrade in July and the second in October. The Spanish Navy will upgrade four other SH-60B Block Zero helicopters using kits already delivered by Lockheed Martin, Sikorsky and the U.S. Government. The upgrades marked the third and final major task in the Spanish LAMPS program, which included delivery of six new LAMPS armed helicopters to the Spanish Armada fleet, and delivery of six SPAS-8B Acoustic Signal Processors built by Sociedad Anonima Electronica Submarina (SAES) of Cartagena, Spain for those aircraft.
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One year after its official opening in January 2003, Lufthansa Technik Malta looks back on a successful start. "We are more than pleased with the first year of operation, since our performance developed even better than expected, with 52 C-Checks at year's end. In addition, six stand alone cockpit door modifications have been carried out both in Malta and Belgium", explained Louis Giordimaina, Chief Executive Officer of Lufthansa Technik Malta. As a "Center of Excellence" within the Lufthansa Technik Group, the company focuses on C-Checks of Boeing 737s as well as of the Airbus A320 family. A joint venture of Air Malta (49 percent) and Lufthansa Technik (51 percent), Lufthansa Technik Malta operates with 110 employees - nearly all-local staff.
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Lockheed Martin has selected Northrop Grumman Corporation as a teammate in the competition to develop the Space Based Radar (SBR) system for the U.S. Air Force.'The Space Based Radar mission will provide worldwide, on-demand, persistent surveillance and reconnaissance for Department of Defense and national intelligence users. Scheduled for initial launch in 2012, the SBR system will grow to a constellation of spacecraft to provide rapid-revisit coverage of the entire Earth's surface. Lockheed Martin Space Systems will lead the effort as the system prime contractor, while Northrop Grumman will serve as Lockheed Martin's primary teammate and subcontractor. Lockheed Martin has been under contract to the Air Force Space and Missile Systems Center since December 2002 to perform trade studies and define alternative concepts for the SBR system.
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Lockheed Martin signed a Memorandum of Understanding (MOU) with Poland's leading defense electronics company, Przemyslowy Instytut Telekomunikacji (PIT), to pursue industrial cooperation related to missile defense, initially focusing on radar technologies. The MOU outlines the areas of cooperation between the two companies, agrees on ways to exchange proprietary information and establishes a business development steering committee.
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A struggling airline industry, ongoing pressure on profits and intensifying competition are transforming the EUR 8.5 billion European commercial maintenance, repair and overhaul (MRO) market. The resultant trends toward outsourcing and industry consolidation are expected to force market participants to redefine their competitive strategies. Several major, low-cost and regional carriers are today outsourcing their maintenance work. As airline maintenance units strive for third-party work due to compulsions of overcapacity, aggressive competition is expected to result for some of the newly generated outsourced businesses. Even as the contest between airline maintenance units and independent MRO companies heats up, the entry of original equipment manufacturers (OEMs) is expected to further aggravate competitive pressures. “Maintenance providers are being challenged to fulfill flexible short-term contracts and long-term total service packages to grasp the benefit of the general tendency towards outsourcing,” says Frost & Sullivan Aerospace & Defense Manager Manuel Magalhaes. “In particular, MRO providers who are able to provide total service packages or develop the capability to offer such packages should be able to gain maintenance contracts from the booming low-cost carriers sector,” he adds.
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The Rocketdyne Propulsion & Power business unit of Boeing successfully completed hot-fire testing of an RS-88 rocket engine at NASA's Marshall Space Flight Center in Huntsville, Ala.The 50,000-pound-thrust engine was designed and built by Boeing for use on Lockheed Martin's Pad Abort Demonstration (PAD) vehicle, scheduled for launch in late 2005. The vehicle will carry four RS-88 engines. A series of 16 hot-fire tests were conducted adding up to 53 seconds of firing, including multiple full-duration six-second burns. "This is a significant milestone in the development and demonstration of the PAD propulsion system," said Terry Lorier, Rocketdyne's TA-10 propulsion program manager. "The entire NASA/Rocketdyne/Lockheed-Martin team has done a great job in successfully completing the engine and performing this test on schedule." The liquid oxygen and alcohol powered thruster was originally designed by Rocketdyne under NASA's BANTAM program and has been modified for application to the Lockheed-Martin PAD vehicle. Critical Design Review of the PAD propulsion module is planned for later this month.
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The EU Secretary-General/High Representative for Common Foreign and Security Policy, Javier Solana, appointed Mr. Nick Witney as leader of the team tasked by the Council1 to prepare for the establishment of the Agency in the field of defence capabilities development, research, acquisition and armaments. Mr. Witney is currently Director-General for International Security Policy at the UK Ministry of Defence. The Agency Establishment Team should submit proposals to the Council with a view to the adoption of the necessary decisions concerning the creation of the Agency and to launching the activity of the Agency in the course of 2004.
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Saab Aircraft Leasing (SAL) announced today an order for two Saab 340BPlus aircraft for Swedish Defense Materiel Administration (FMV). SAL won an international Request For Proposal (RFP) process to supply the two aircraft. Both 30-seat turboprops are scheduled for delivery during early spring 2004. The Swedish FMV intends to replace its three remaining Beech 200 King Air aircraft with the two Saab 340BPlus'. One aircraft will be stationed at F-21 in Luleå and the other at F-17 in Kallinge. Both will be used for transportation of personnel both within Sweden and throughout Europe.
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On January 23, 2004, before numerous prominent national and international guests from federal and provincial political life, as well as from industry and the press, Christian Dries, CEO of Diamond Aircraft Industries, opened the new Diamond Composite production center in Wiener Neustadt, Heisenberg-Strasse 3-5. The largest and most modern plant in Europe presently manufacturing this class of aircraft of synthetic materials was erected on an area of 10,900 square meters (117,000 square feet). This building project was completed in a record time of only 7 months, from go-ahead to start of production, including assembly of all machinery and systems. Extremely high worldwide demand for the twin-engine four-seater, the DA42 Twin Star, and the single-jet five-seat D-JET, which is now under development, led the firm to construct new production facilities and to expand these sectors of its operations to meet the demand. The aircraft parts produced here will move into the production chain of the existing factory in Wiener Neustadt, Austria and the branch works in Canada at London, Ontario, for final assembly. The expansion of operations allows for a total production capacity of up to 600 planes per year. In the medium to long term, orders for development and production may also be undertaken for promising applications of synthetic materials in fields other than aircraft construction.
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Lockheed Martin Corporation today reported record net sales of $31.8 billion in 2003, a 20% increase over 2002 sales of $26.6 billion. Sales grew in all business segments in 2003. The Corporation booked more than $38 billion of orders in 2003, increasing its year-end backlog to a record $76.9 billion. Net earnings for 2003 were $1.1 billion ($2.34 per diluted share) compared to $500 million ($1.11 per diluted share) in 2002. Cash provided by operating activities for 2003 was $1.8 billion, after a discretionary pre-funding of $450 million in December for future defined benefit pension plan contributions. “We continued to execute our disciplined growth strategy in 2003. Our operational and financial performance, and strong cash flow, enabled us to deploy cash to enhance long-term shareholder value,” said Chairman and Chief Executive Officer Vance Coffman. “We are focused on generating profitable growth and providing the best solutions to our customers with an emphasis on Defense, Government Information Technology and Homeland Security. We look forward to supporting initiatives to reinvigorate space exploration. Lockheed Martin and its innovative team of 130,000 dedicated employees are well positioned for continued success.” Net earnings for 2003 were $1.1 billion ($2.34 per diluted share). The 2003 results included the gain on the sale of the commercial IT business and previously reported net charges of $110 million ($0.24 per share) primarily associated with the early retirement of long-term debt and the exit from the commercial mail sorting business. The combined effect of these items was to decrease 2003 earnings by $102 million ($0.22 per share).
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Chief Executive Officer Vagn Soerensen made the following analysis of the traffic statistics for the Austrian Airlines Group: “The trend we originally detected several months ago – that passenger numbers and load factors on our scheduled services were rising again due to our targeted marketing offensives since September – accelerated in December 2003. We managed to achieve convincing rates of growth in both the scheduled and charter sectors; in the last month of 2003, indeed, we carried 5.6 % more passengers and raised our load factor by 6.3 percentage points to 73.8 %. Thanks to our policy of well-balanced capacity adjustment, we succeeded in increasing the load factor of scheduled flights for 2003 compared to 2002, to a total of 71.3 %.” With passenger numbers increasing by 2.6 % in the fourth quarter of 2003, the load factor on scheduled flights rose by 6.4 percentage points to 74.3 %. In 2003 as a whole, production of scheduled and charter flights were cut down, primarily in the first half of the year due to the Iraq crisis and SARS. The group made a total of 142,786 flights in 2003, 4.8 % fewer than in 2002. The total number of passengers carried on scheduled and charter flights, meanwhile, fell by only 4.0 % to 8,479,417.
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The 18 international German airports recorded a passenger growth of 3,9 per cent to 141,9 million for 2003. Compared to 2001, this is a rise of 0,9 per cent. Intra-German travel rose 4,2 per cent, intra-European 4,9 per cent and intercontinental 1,1 per cent. Scheduled flight passengers were up 5,5 per cent, mainly due to the rise of the low-cost sector. This sector exploded 112 per cent and got a 9,8 per cent share of the total. Traditional charter services decreased by 1,7 per cent.
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During Chinese President Hu Jintao's state visit to France to mark the 40th anniversary of diplomatic relations between the two countries, Snecma has bolstered its partnership with China at several levels. Liu Yanhua, Vice Minister of Science and Technology, and Jean-Paul Béchat, Chairman and CEO of Snecma, signed a framework agreement on January 28, concerning collaboration on training and research. Chinese President Hu Jintao and French Prime Minister Jean-Pierre Raffarin attended the signing ceremony. This framework agreement complements an initial agreement concerning the training of Chinese engineers in France, signed on November 7, 2002 in Beijing, by Snecma Moteurs, the Ecole Centrale de Lyon engineering school and four Chinese universities: Beijing University of Aeronautics and Astronautics (BUAA), and the Jiao Tong universities in Shanghai, Xi'an and Chengdu.
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Cessna Aircraft 2003 deliveries totaled 842: 197 Citations, 57 Caravans and 588 Single Engine Piston Aircraft. Sales revenues totaled $2.3 billion and the year-end order backlog is $4.4 billion. According to Cessna's President and CEO Jack J. Pelton, “We expected 2003 to be a challenging year and it was. In spite of the adverse 2003 economic conditions, the Cessna team showed tremendous flexibility in responding to the necessary reduction in production schedules. Our cost structure has been adjusted by implementing a number of efficiency improvements in our manufacturing processes. We can be proud of our 2003 accomplishments, and are confident that our planned 2004 delivery schedule is stable. “In response to our customers' needs, Cessna introduced several new models and model upgrades in 2003. The Citation XLS, Citation X interior and options upgrades, and G1000 glass-cockpit avionics on Skylanes and Stationairs were announced in October. These announcements, in combination with the available bonus depreciation provided under the Jobs Creation and Workers Assistance Act, have boosted our new order intake.
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Although Operation Iraqi Freedom saw no major aerial engagements between the involved combatants, this will not hinder sales of air-to-air missiles in the future. Sales of air-to-air missiles (AAMs) over the next 10 years will total $12.2 billion, according to Forecast International's “The Market for Air-to-Air Missiles.” Some 49,379 missiles will be produced, the lion's share by American and European firms. “The value of annual production will steadily increase over the next 10 years, reaching $1.5 billion by 2013,” said Forecast International missile analyst Larry Dickerson. “A large part of this market – nearly 50 percent – will be controlled by U.S. and Western European companies,” he said. “Raytheon will have the largest single share of this market at 28 percent, but this is somewhat misleading,” said Dickerson. “Raytheon's hold on the top position in this market is actually much stronger once you remove certain non-competitive countries from the calculations,” he said. “An example of a 'non-competitive' country is the People's Republic of China, which produces thousands of missiles each year but would be lucky to export a few hundred,” Dickerson remarked.
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British Airways has set a target of £300 million for reduced staff costs in its business plan for the next two years. The airline will target improvements to working practices and seek to introduce more efficiencies to lower unit costs. The plan includes a 30 per cent reduction of employee costs in head office and support functions and 15 per cent in operational areas. The airline envisages the size of the current flying programme being maintained. Options to achieve any necessary headcount reductions will include unpaid leave, part-time working, early retirement and voluntary severance. Further reductions will be achieved through natural turnover and restricted recruitment. The savings will be in addition to the 13,000 manpower reduction due to be achieved by March 31 this year under the airline's Future Size and Shape review announced in February 2002. Chief executive Rod Eddington said:“We must make the necessary changes in partnership with our staff and trade unions, and without impacting on the service our customers have rightly come to expect. “We have shown we are able to meet our targets through voluntary means and that will remain our aim. “The last two years have been about survival – now we want to be in a position to prosper.” The new cost target will run alongside £450 million savings being delivered from existing programmes, including greater use of technology and reduced external spend.
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Embraer welcomed the European Commission's decision to close the investigation into the Brazilian Export Finance Program (PROEX). The investigation, which began in 1999 in the context of the European Commission's Trade Barriers Regulation, was to evaluate the Brazilian program's compatibility with the provisions of the World Trade Organization's Agreement on Subsidies and Countervailing Measures. According to a notice published in January in the European Union's Official Gazette, the investigation of the PROEX program as currently applied to regional aviation is now closed, thereby reiterating the legality and full compliance of the Brazilian program with applicable international norms. “This important decision of the European Commission once again emphasizes that PROEX is a perfectly valid instrument for the equalization of interest rates applicable to Brazil,” said Henrique Costa Rzezinski, Senior Vice-President - External Relations at Embraer. “This decision will certainly put an end to the allegations questioning the legality of PROEX, a program that is in line with international laws and intended to diminish the cost of funding so as to render competition between developed and developing countries more equal.”
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United Airlines has awarded Pratt & Whitney a 10-year Fleet Management Program for the airline's fleet of V2500-A5 engines. The Fleet Management Program with United Airlines is the largest aftermarket agreement in Pratt & Whitney history and has an estimated value of more than $2 billion USD. The 10-year agreement includes two five-year options and covers over 300 installed and spare engines that power United Airlines' Airbus A319 and A320 aircraft. Pratt & Whitney will provide maintenance services at its Columbus Engine Center in Columbus, Georgia. “We are extremely pleased that United Airlines has chosen Pratt & Whitney to support its V2500-powered Airbus fleet,” said Pratt & Whitney President Louis R. Chênevert. “United Airlines and Pratt & Whitney have had a long and rewarding relationship for more than a half century and this fleet management program agreement demonstrates the success of that business partnership. We believe the Columbus Engine Center's world-class competitive turnaround times and high quality maintenance services were key factors in the award of this agreement and we look forward to helping United Airlines create value with their V2500 maintenance.”
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