FLUG REVUE update: Week ending January 28, 2001

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UPDATE

Week ending January 28, 2001

+++ SAir strategy change ousts Bruggisser +++ Eurocopter has strong turnover in 2000 +++ EADS launches group bid for big UK air tanker deal +++ Gripen proposal for Austria +++ Hamburg delivers 500th Airbus +++ ICAO proposes tighter noise rules +++ News in brief +++

SAir strategy change ousts Bruggisser
Krisenmassnahmen bei der Swissair

In further assessing the company's current situation, the SAirGroup Board of Directors has reaffirmed the Group strategy that focuses on the two main pillars of airline and airline-related sectors. The Board agrees, however, that the bottom line of the airline business must be successively improved. The SAirGroup therefore aims to substantially upgrade the appeal of Swissair, Crossair and Sabena while simultaneously enhancing the level of cooperation among the airlines. In doing so the Group will place a great deal of emphasis on the quality of passenger service. As Swiss airlines, Swissair and Crossair will increasingly utilise the quality location afforded by Switzerland in an effort to promote an attractive and top-quality product.
The SAirGroup and Philippe Bruggisser have mutually agreed that Mr. Bruggisser leave his post with the Group with immediate effect. Group Chairman Dr. Eric Honegger will assume the function of Group CEO on an interim basis. Wolfgang Werlé, CEO of SAirRelations, will serve as his deputy. The Group's SAirLines division, which includes Swissair, Crossair, Balair CTA, Sabena, AMP and the Group's airline equity holdings, will now be managed by Moritz Suter, CEO of Crossair. Mr. Suter will also serve in the Group's Executive Management body. Beat Schär has been named new CEO of Swissair while André Dosé will take over that position at Crossair.

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Eurocopter has strong turnover in 2000
Gute Geschäfte für Eurocopter

In 2000, the Eurocopter Group enjoyed a second year of exceptional orders (effect of the NH 90, after the Tiger in 1999) for 531 new helicopters. The breakdown of the orders is as follows: 61 EC 120 B Colibris, 137 single-engine Ecureuil/Fennecs, 13 twin-engine Ecureuil/Fennecs, 40 EC 135s, 7 BK 117s, 18 Dauphin/Panthers, 7 EC 155 Bs, 5 Super Puma (EC 225) and Cougars (EC 725) and 243 NH 90s. Taken together, these orders are worth 4,983 million euros. This amount includes the new helicopters (plus 45 pre-owned helicopters sold by Eurocopter and its subsidiaries), the R& D activities, the services provided to customers and miscellaneous items. In terms of value, the civil and parapublic sector accounts for 21% and the military sector for 79%. The consolidated orders for production helicopters amount to 3,450 million euros, with 2,808 million euros for the NH 90 alone. Thanks in particular to the Tiger and NH 90 contracts, the order book of Eurocopter is well-filled for the next ten years.
The consolidated turnover in 2000 reached 2.0457 billion euros, up by 17% over 1999. The main contributors to the turnover are the services provided to customers, the R&D activities and the delivery of 289 helicopters. The civil and parapublic sector generated 55% of the turnover and the military sector 45%. The export share (excluding France and Germany) accounts for 63%. Eurocopter maintained its share of the market compared to 1999. The upturn that marked 1998 and 1999 was sustained in 2000: close to 500 helicopters were delivered in 2000 compared to 477 in 1999. This is due to the very buoyant context existing in Europe (145 helicopters delivered in 2000 compared to 124 in 1999), as well as in the United States (170 deliveries in 2000). In Asia, the market has remained stable and, in Latin America, it is showing signs of slight expansion.

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EADS launches group bid for big UK air tanker deal
Tanker-Angebote für die RAF

Five leading aerospace and defence companies have joined forces to form AirTanker, to bid for the UK Ministry of Defence's GBP9 billion Future Strategic Tanker Aircraft (FSTA) programme. The consortium includes the European Aeronautic, Defence and Space Company (EADS), Rolls-Royce, Cobham, Brown & Root Services and Thales. The FSTA programme is to be a Private Finance Initiative (PFI) to replace the RAF's ageing VC10 and TriStar tankers with a complete air-to-air refuelling and air transport service provided by industry. AirTanker's proposal will be based on the latest generation of Airbus wide-bodied aircraft powered by Rolls-Royce Trent engines. The AirTanker consortium will be able to provide the best value-for-money air-to-air refuelling capabilities required by the MOD in this groundbreaking project. Cobham, EADS, Rolls-Royce, Thales Defence (formerly Thomson Racal Defence) and Brown & Root Services will be equal shareholders in the new AirTanker company, bringing together proven expertise in flight operations, aerospace engineering, electronic systems and support services. Significant partnerships with financial institutions and airlines are currently being discussed.

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Gripen proposal for Austria
Österreich sucht neue Fighter

On January 22, Gripen has today submitted its response to the Austrian government's Request for Information (RFI) for new fighter aircraft to fulfill its national defense requirements. The response is based on the supply of up to 30 new Gripen four-generation multi-role/swing-role fighters, supported by an innovative finance package and offset program. "Saab Aerospace, which manufactures and markets Gripen internationally in partnership with BAE SYSTEMS of the United Kingdom, has developed a close understanding of Austrian defense operations and requirements since signing a contract to supply the Draken fighter in 1985", stated Roger Lantz, who heads the Gripen campaign in Austria. "The Gripen team looks forward to further developing this long-standing relationship with Austrian defense during the competition process for new fighter", he continued.

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Hamburg delivers 500th Airbus
500. Airbus aus Hamburg geliefert

On January 24, Airbus delivered its 500th aircraft produced in Hamburg since the opening seven years ago, near the Elbe, of the second Airbus final assembly line after Toulouse. The aircraft, with Manufacturer Serial Number (MSN) 1415 is an A319 delivered to Air France, scheduled to become the 100th Airbus single-aisle aircraft to enter service with the French carrier. Since making its first delivery in 1994, the Hamburg delivery centre has handed over 176 A321s - the first aircraft type to be built there - and 324 A319s. The first section of the family's smallest member, the A318, has already arrived in Hamburg and final assembly will take place this summer. Following the tremendous success of Airbus' A320 Family on the market place, production rates for the entire family are being steadily ramped up, from a current 23 aircraft per month, to 30 per month by 2003.

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ICAO proposes tighter noise rules
Strengere Lämvorschriften vorgeschlagen

The Committee on Aviation Environmental Protection (CAEP) of the International Civil Aviation Organization (ICAO) has developed a comprehensive series of recommendations to reduce the environmental impact of aircraft noise and engine exhaust emissions. The recommendations will be submitted to the Council of ICAO for review and further action. "The conclusions and recommendations of CAEP will greatly assist the Council in formulating new policies and adopting new standards for aircraft noise reduction, as well as developing procedures to limit or reduce greenhouse gas emissions from civil aviation. This in turn will support Contracting States and the air transport industry in achieving maximum compatibility between the safe and orderly development of civil aviation and the quality of the environment," said Dr. Assad Kotaite, President of the Council of ICAO.
Specific CAEP recommendations in these four areas include: a new noise standard which is 10 decibels lower, on a cummulative basis, than the current Chapter 3 standards in Annex 16 to the Convention on International Civil Aviation, for new aircraft design, effective 1 January 2006; procedures for re-certification of existing aircraft meeting the new standard; more stringent noise standards for helicopters; publication of guidance material on land-use planning; a proposal for new take-off noise abatement procedures.

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NEWS IN BRIEF / KURZMELDUNGEN

MTU has started testing a new fan demonstrator for future military engines. The three-stage design delivers a 5:1 pressure ratio, an important improvement over the 4,2:1 performance achieved by the current design used in the EJ200 powering Eurofighter. The new fan used blisk technology throughout. The masimum diameter is 80 cm, which means it is the largest blisk ever made by MTU. Also, the design features highly sophisticated aerodynamics. The new fan met all targets, and there were no undue vibrations. The programme is funded by the German ministry of defence.
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Bombardier Aerospace has delivered two 72-passenger Q400 aircraft to Augsburg Airways, a Team Lufthansa carrier. The first aircraft was delivered on Jan. 12. The second aircraft departed from Bombardiers Downsview Airport production facility on Jan. 15 to travel to Augsburg, Germany, carrying representatives from the airline and European journalists. These aircraft (serial numbers 4028 and 4029) are the first two of five ordered by Augsburg. The airline expects to inaugurate service with the new aircraft in early February. Augsburg has been a customer since 1991 and currently operates a fleet of 14 37- and 50-seat Bombardier Q Series and Dash 8 turboprop aircraft, serving cities in Germany and throughout Europe. A total of 21 Q400 Series aircraft have been delivered to five airlines : SAS Commuter (12), Tyrolean (4), Changan (2), Horizon (1) and Augsburg (2). Eight airlines have placed firm orders for 68 aircraft and an additional 54 options and conditional orders which brings the overall Q400 program total to 122 aircraft.
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The Release to Service for the British Army Apache helicopters was signed on January 16th 2001 by Brigadier Richard Folkes OBE ADC, Director Army Aviation, at Middle Wallop in the UK. This marks the moment the Army assumes ownership of the first nine AH Mk1 Apache aircraft and commences the training of its pilots. The Defence Procurement Agency (DPA) specified the In Service Date (ISD) in the prime contract as the delivery of nine production standard aircraft by December 2000. The manufacture programme has remained on schedule since contract award in March 1996 and the ninth aircraft was delivered on 14 December 2000. The DPA formally declared achievement of ISD on 16 January 2001 to coincide with the Release to Service. This important milestone has been achieved within days of the original date set nearly five years ago when the #2bn prime contract for 67 AH Mk1 Apaches was placed with GKN Westland Helicopters Ltd.
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The Turkish Navy's first S-70B SEAHAWK helicopter conducted its first flight at Sikorsky Aircraft Corporation's main facility in Stratford. The two-hour flight was also the first time aloft for the Sikorsky Glass Cockpit in an international Naval Hawk. Sikorsky is building eight S-70B aircraft for Turkey. The program includes modifications, publications, spares, ground support equipment and training. Deliveries will take place in 2001 and 2002. The Sikorsky Glass Cockpit, supplied by Rockwell Collins, performed well during the two-hour flight, controlling flight and engine instrument displays and the communications and navigation functions. Pilots performed basic hover controllability checks. The aircraft was flown through a series of sideward and rearward flights,climbs and descents, auto-rotation, airspeed and vibration flight checks.
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Lockheed Martin Missiles and Fire Control's Joint Air-to-Surface Standoff Missile (JASSM) successfully performed its first development test at White Sands Missile Range in New Mexico. It was the first flight using a seeker to guide to a target. This is the first of eight contractor development test and evaluation (CDT&E) flights that are part of Engineering and Manufacturing Development (EMD). The test met all objectives. Launched from a U.S. Air Force F-16 Fighting Falcon flying at Mach 0.80 and 15,000 feet above the New Mexico desert, the JASSM cruise missile successfully separated from the F-16, deployed its wings and tail, and started its engine. After weapon release, the missile navigated via predetermined waypoints and descended to a selected altitude above ground level for target ingress. The missile performed a terminal maneuver that enabled the missile to achieve the desired impact angle and accuracy. The imaging infrared seeker and the automatic target correlator (ATC) algorithm successfully reduced the target impact guidance error. This flight is the first of eight contractor development test and evaluation (CDT&E) flights to prove out the JASSM on the F-16 and the B-52 host aircraft platform. These tests will demonstrate a maximum number of key and critical system parameters. Each flight will be an end-to-end test, with successive tests providing a more detailed exercise of the total JASSM system from intelligence and mission planning to bomb impact assessment and target destruction.
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United Airlines, the airline that launched the Boeing 777 program and was the first to fly the world's most passenger-preferred jetliner, became the first carrier to operate 50 twin-aisle 777s. United took delivery of its 49th and 50th 777s - the first deliveries this year United was the launch customer for the 777 program, ordering 34 of the twinjets in October 1990 and 27 more since then. The airline also was one of the eight "working together" airline partners that helped define the airplane that is now so dominant in its class. United flies each of its 777s an average of 14 hours a day on routes such as San Francisco to Paris, San Francisco to Beijing, or Denver to Frankfurt, Germany.
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Northrop Grumman reported increased economic earnings (excluding the after-tax effects of pension income and amortization of goodwill and other purchased intangibles) of $429 million, or $6.05 per share (EEPS), for the year ended Dec. 31, 2000, compared to $390 million, or $5.59 EEPS, for 1999. On Dec. 5, 2000, Northrop Grumman stated that it would begin reporting its earnings in the form of EEPS since the company believes it to be a better performance metric. Under Generally Accepted Accounting Principles (GAAP), the company reported record net income from continuing operations totaling $625 million, or $8.82 per share for the year, up 32 percent from the $474 million, or $6.80 per share, for 1999. For 2000, the company generated nearly $1 billion in cash from operations and reduced its net debt by more than $750 million to $1.3 billion at Dec. 31, 2000. Sales for 2000 were $7.6 billion, the same as reported for 1999. Operating margin for the year was $1.1 billion, up from the $954 million reported a year ago. Operating margin includes pension income of $538 million in 2000 compared with $343 million in 1999. Northrop Grumman's pension funds outperformed their benchmark indices in 2000, which were down approximately 4 percent, however the funds still experienced a negative return for the year of less than 2 percent. As a result, a preliminary estimate for pension income in 2001 is between $250-$300 million.
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Boeing has successfully completed the Joint Strike Fighter X-32A concept demonstrator's flight test with a loaded internal weapons bay. Test pilot Air Force Lt. Col. Edward Cabrera opened and cycled the X-32A's weapons bay doors as part of vibration and acoustic testing during the aircraft's 61st flight. The testing validates the design predictions of the X-32A's weapons carriage environment. In the test flights, the X-32A carried an instrumented AIM-120 Advanced Medium Range Air-to-Air Missile, or AMRAAM, and a Joint Direct Attack Munition. "The tests were successful; the vibration and acoustics data validated our predictions that the environment inside the side-mounted weapons bays is excellent for weapons carriage and release," said Mike Heinz, Boeing vice president and JSF deputy program manager. "This milestone is another positive step in reducing risk as we move closer to the next phase of the program." Boeing designed its JSF with side-mounted weapons bays for both operational and supportability reasons.
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Pratt & Whitney, a division of United Technologies Corp. (NYSE: UTX), has purchased the Astronautics and Aerosciences Division (AASD) of Adroit Systems, Inc. (ASI) as part of Pratt & Whitney's overall advanced technology plan. The Seattle-based division of ASI has developed leading-edge technology in fluid mechanics and advanced combustion concepts. Its work in pulse detonation technology holds great promise for advanced gas turbines, rocket and other applications. "AASD is a first rate engineering organization," said Stephen Finger, president of Pratt & Whitney's military engines unit. "We believe combining that team's outstanding talent and knowledge with Pratt & Whitney's opportunities will advance this technology more rapidly."
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A private jet piloted by Michael A. Chowdry, chairman, president and CEO of Atlas Air Inc. (NYSE:CGO) crashed in an open field in Watkins, near Denver, Colo. One other person was on board. Both were killed in the crash. No one on the ground was injured. The other person's name is being withheld pending notification of relatives. "Our hearts go out to the family and friends of both Michael and the other victim," said Richard Shuyler, executive vice president for Atlas Air. "This is a great loss to us all." The plane took off from the Front Range Airport at approximately 11:25 a.m. MST for a scheduled 30-minute flight. It crashed in an open field in Watkins at approximately 11:27 a.m. MST. The National Transportation Safety Board will conduct a thorough investigation into the cause of the crash. Richard Shuyler, executive vice president for Atlas Air will assume Chowdry's chief executive responsibilities until further notice. Jim Matheny, executive vice president of operations will remain responsible for the operational aspects of the company.
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The Progress M1-5 cargo ship successfully docked with the Mir space station on January 27. It is loaded with more than two tons of fuel, which will be burned up to send the 140-ton station hurtling through the Earth's atmosphere over South Pacific. Russian space officials set March 6 as a tentative date for discarding the station, but warned that it may change. The flawless automatic docking at 8:33 a.m. Moscow time was greeted with relief and applause at Mission Control.
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Cessna Aircraft Company ended 2000 with a solid increase in sales, bringing Cessna's total revenues to approximately $2.8 billion. Cessna's total backlog of 1,385 units reached the $6.6 billion level, the largest in its history. Of Cessna's 1,541 orders received in 2000, 415 were Citations (up 24 percent over 1999), 116 were Caravans and 1,010 were Single Engine models. Cessna's aircraft deliveries for 2000 totaled 1,258 units: 254 Citations, 92 Caravans, and 912 single-engine piston aircaft. "Cessna concluded the year with a remarkable 49 Citation deliveries for the month of December, the highest number for a single month in Cessna's history," Cessna CEO Gary Hay said. "These numbers reflect the hard work and dedication of 13,000 Cessna employees."
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Gulfstream Aerospace Corporation, a wholly owned subsidiary of General Dynamics , recorded sales of 82 aircraft in 2000, setting an all-time mark for retail sales. The 2000 sales figures include 27 orders for the next-generation Gulfstream, the GV-SP. The successful GV-SP sales launch has resulted in program deliveries being sold out through mid-2004. "From our record aircraft sales mark to our tremendous growth in service, Gulfstream had an outstanding 2000," said Bill Boisture, president and chief operating officer for Gulfstream. "We are also extremely gratified that the new GV-SP is being well received in the marketplace. It will be a great airplane and the ultra-long range business aircraft market is anxious for it." Gulfstream recorded sales of 35 GIV-SPs and 20 GVs, in addition to the highly successful GV-SP product launch. The company also produced and completed in excess of 70 aircraft in 2000. At year-end, Gulfstream's order backlog reached $3.5 billion.
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The German airline Eurowings Luftverkehrs AG, headquartered in Dortmund, and French-Italian ATR (Avions de Transport Régional) announce they have signed a contract in December 2000 for six new generation 72-500s. Deliveries of these aircraft will take place at a rate of 2 in March, followed by 2 in April and the remaining 2 in May and June 2001. Eurowings is, with a fleet of 27 ATRs (11 ATR 42, 16 ATR 72), the largest ATR operator in Europe and has started its ATR operations in 1986. The ATR 72-500's entry in the Eurowings' fleet is part of a fleet renewal and development plan. These new generation aircraft will be put into service on the European regional network in collaboration with Lufthansa. The ATR 72-500 has been selected by Eurowings for its greater seating capacity and will be equipped with 68 leather seats. The ATR 72-500 will replace the smaller ATR 42-300 on certain routes where traffic has grown.
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Fairchild Dornier has named Robert Stecher 328JET program manager effective immediately. Reporting to John Wolf, chief operating officer, Stecher is based here at the company's headquarters and primary production facility. In this position, Stecher will manage all aspects of the 328JET program, with a focus on product improvement and enhanced customer satisfaction. The 328JET, the world's only 32-seat regional jet, is in service with operators in Europe, the United States, Africa, China, the Middle East and the Pacific Rim.
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Lufthansa Technik AG (LHT) is acquiring Composite International, Inc., based in Tulsa, Oklahoma, and is setting up a new workshop for servicing high-grade aircraft components inShenzhen, China. This "double coup" is a further step toward LHT's expanding its role in the business of servicing airframe-related components (ARCs) and strengthening its presence in the U.S. and Asia, two of the world's most important markets. Coupled with the operation in Hamburg, the two facilities will form an ARC network that will overhaul and repair thrust reversers, engine cowlings and other composite components on a worldwide basis. Located in Tulsa, Oklahoma, a growing aviation center, Composite International Inc. has over the past ten years become a significant player in the servicing of aircraft components in North America. Its equipment, which includes two autoclaves, enables it to do complete repairs and overhauls of aircraft structural elements.
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Yet again, a company in the Lufthansa Group has earned a notable accolade. The international Air Transport World (ATW) Magazine has today voted Lufthansa CityLine "Regional Airline of the Year 2001". In their yearly airline analysis, the prestigious magazine's editors singled out the Lufthansa regional carrier's successful networking of the European regions. "CityLine has brought the power of Lufthansa's global network to cities across Europe while offering superior customer service and operational excellence," said ATW editor-in-chief J.A. Donoghue in Washington D.C.
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The reconnaissance drone systems of the type CL-289, which provided impressive reconnaissance images in more than 400 missions during the peacekeeping missions in Bosnia and Kosovo, will be made fit for the future by the modern electronics of EADS, the European Aeronautic Defence and Space Company. NAMSA (Nato Maintenance and Supply Agency) awarded the contract for improvement and upgrade of the German and French CL-289 drone to Dornier GmbH - a group company of EADS. The AOLOS (ADA Operational Onboard Software) project has a contract volume of more than DM 53 million and will be implemented by the Business Unit EADS Defence Electronics. This was reported by Dornier GmbH in Friedrichshafen. Dr. Stefan Zoller, CEO of Dornier GmbH and Head of the Business Unit Defence Electronics: "In the AOLOS project, a total number of 140 drones will be equipped in our Airborne Systems Unit. This will ensure the operational readiness of the CL-289 reconnaissance systems for further years". The CL-289 drone has been in service with the German and French army since 1992 and is currently the only unmanned imaging reconnaissance system in these countries. The drones are equipped with an infrared line scanner and an optical camera and fly over the area to be surveyed on a previously programmed flight path.
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"Achieving a true 'One European Sky' - which is critical to the ending of ATC delays - could take a long time in the present political set-up. So, we believe that to get the change underway, what is needed is "corporatisation" of national ATC Service providers. Corporatised ATC could be financed through a brand new market instrument," said IATA Director General Pierre J. Jeanniot, speaking at the European Congress on Participation in Global Infrastructure in Frankfurt, 23 January. "If the paper of ATC corporatisation is to be quoted on the Frankfurt stock exchange, this does not have to be in the form of equity. In fact, we believe these corporations can be debt financed - and there are some good examples of this working, for example in Canada." "While those current financial arrangements are all of relatively short term nature, it would seem to me that an opportunity exists for various financial institutions, working with us, to develop a new type of low risk, long term debt financing for aviation infrastructure - a brand new aviation financial instrument." "These could, typically, be 25 year bonds, carrying an attractive rate of interest. They would at the same time be low-risk, with their viability guaranteed by the contracted cash-flow from future user charges."
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Newport News Shipbuilding (NNS), Newport News, Va., is being awarded a $3,829,260,045 contract modification for advanced planning and procurement for CVN 77, the tenth aircraft carrier of the CVN 68 (Nimitz) Class. Under this modification, NNS will accomplish the detailed design and construction of the CVN 77 and Lockheed Martin Integrated Systems Inc. will execute the development, design, procurement, test and installation of the ship's new Integrated Warfare System. Work will be performed in Newport News, Va. (97%), and, Mount Laurel, N.J. (3%), and is expected to be completed by March 2008. Contract funds will not expire at the end of the current fiscal year.
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The DRF-operated EMS helicopter at Freiburg, southwest-Germany, has made its 6000th emergency flight. The BK 117 is based at Freiburg airport since 1993. In 2000 alone, it flew 965 missions.
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