FLUG REVUE update: Week ending May 27, 2001

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UPDATE

Week ending May 27, 2001

+++ European and US indutries talk common goals +++ Laying the foundation stone for MTU Maintenance Zhuhai +++ ATR Integrated formed +++ More ESA astronauts to fly to ISS +++ News in brief +++

European and US indutries talk common goals
AECMA und AIA im Gespräch

On 24 April Karl Krapek, Chairman of the Board of Governors of AIA (Aerospace Industries Association of the US) and President and COO of United Technologies addressed the Board of AECMA in Brussels. The meeting belongs to an intensified exchange between the two associations, including developing common positions on export controls and other issues. In his speech to the AECMA Board, the panel of Directors of Europe's national aerospace associations, Krapek presented his vision for a multilateral, free trade global aerospace community. Krapek said "Even in the sensitive field of aerospace, we can find ways to join forces with our former adversaries to work toward a common goal. Should we not be able to accomplish as much - if not much more - by working together with our long-term allies?"
Whilst the European aerospace industry is currently much supporting the creation of a single European Aviation Safety Agency (EASA), aircraft safety is also an area of agreement and activities between Europe and the US. Krapek welcomed the joint work with ICAO, the JSSI (Joint Safety Strategy Initiative), the JAA, the FAA, IATA and other international organisations and manufacturers to address this issue. One of the main issues that triggered a closer dialogue between both sides of the Atlantic was hushkits in 1999. At the Farnborough Air Show 2000 AECMA and AIA had initiated actions to review the respective governments' basic R&D programmes on noise and emissions. The activity is under way, and Krapek underlines that "we all believe that ICAO, and not the European Commission, the U.S. Congress or any other body, is the right place for all parties to agree on noise standards for aircraft." Both associations are also in strong agreement that it is in the interest of all parties to avoid trade conflicts. On both the European and the American side a need to reformexport controls are obvious. "The United States needs to simplify export regulations," said Krapek, "and the Bush administration needs to light the appropriate 'flare' under those who oversee them. Quite simply, we must adapt our export control systems to the multilateral reality of today's industry."

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Laying the foundation stone for MTU Maintenance Zhuhai
MTU baut in Zhuhai

Off they go into a mutually profitable partnership: On May 18, representatives of MTU Maintenance Zhuhai laid the foundation stone for their new shop in the Zhuhai special economic zone. A 50-50 joint venture of MTU Aero Engines and China Southern Airlines, Chinas largest carrier, MTU Maintenance Zhuhai is slated to begin repair work on CFM56 and International Aero Engines V2500 engines starting November 2002. Its proximity to Hong Kong and Macao puts the Zhuhai location within easy reach also for customers outside China. The two partners in MTU Maintenance Zhuhai Co. Ltd. had inked the agreement already back in mid-May 2000. Chinese authorities had been supportive of the joint venture from its inception, granting a business license on April 6, 2001. Plans are to grow the workforce at MTU Maintenance Zhuhai to 730 by 2009, and annual sales to US$220 million. Infrastructure and machine tool investments will run in the neighborhood of $180 million. The shop will start out repairing V2500s powering Airbus Industrie A320 family airplanes and CFM56s from various Boeing and Airbus aircraft, and it expects to successively expand its engine portfolio to include additional commercial engine families. What speaks for sending engines to the Zhuhai shop will additionally be its modern high-capacity test cell that accommodates also the larger among commercial engines.
The partners in the joint venture have raised the bar high: The Zhuhai shop expects to repair 150 engines annually before very long. With its projected 300-engine capacity, it will be able to flexibly cope with very special customer needs. China Southern Airlines brings a substantial dowry to its joint venture with MTU: As of early 2001, the Guangzhou-based carrier operates 81 Boeing and 20 Airbus transports. A good basic capacity utilisation of MTU Maintenance Zhuhai is already guaranteed by engines from China Southern turbines. The ongoing consolidation in China's air industry will boost these numbers to 180 aircraft totally.

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ATR Integrated formed
Neue Struktur für ATR

Finmeccanica/Alenia Aerospazio and EADS (European Aeronautic Defence and Space Company), partners in the ATR program, have decided to merge their ATR activities into a single entity " ATR Integrated ". These activities were previously split between thepartners' organizations. "ATR Integrated"" will significantly contribute to improve the efficiency and profitability of this program. Both ATR partners confirm their willingness to reinforce their partnership on the regional aircraft market. ATR Integrated will be effective on June 1st 2001. The company will continue to be named ATR. ATR Integrated will merge the industrial activities of EADS ATR (final assembly line, engineering, procurement), and Alenia Aerospazio engineering and procurement activities for the ATR program and the existing commercial activities of the current GIE ATR. The manufacture of fuselage and wings remain subcontracted respectively to Alenia Aerospazio and EADS Airbus. ATR Integrated, with these additional technical and industrial capabilities, will extend its operational autonomy. Philippe Camus and Rainer Hertrich, CEOs of European Aeronautic Defence and Space company said: "This is an other step of close cooperation with our Italian friends after the creation of MBDA on the missile sector. We are further completing European consolidation of our industry to enhance profitable growth and competitiveness." In 2000 ATR turnover amounted to EUR 580 millions.

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More ESA astronauts to fly to ISS
Vittori nächster ESA-Astronaut auf der ISS

ESA's Director General Antonio Rodotà and the Director General of the Russian Aviation and Space Agency (Rosaviakosmos) Yuri Koptev recently signed an agreement for European astronauts to fly to the International Space Station (ISS) on Russian Soyuz launchers in the period 2001 to 2006. ESA astronauts will perform the duties of flight engineer in both "taxi flights" and "increment flights". "Taxi flights" are short-duration flights (7-8 days) to the International Space Station with the purpose of exchanging the Soyuz capsule, which is permanently docked to the Station to be used as a rescue vehicle. "Increment flights" are crew exchange flights which may require the astronauts to stay on board the Station for up to 3-4 months. The agreement (technically know as a "Framework agreement") sets the general principles, terms and conditions of the ESA-Rosaviakosmos co-operation while the type of flight, the experimental programme content and the cost of each specific flight will be negotiated accordingly on a case-by-case basis. The total package price will include the cost for the training, planning and preparation of the missions, the on board stay, the up-load and download of flight equipment needed for the specific experimental programme. The number of flight opportunities is currently not specified, but it will be in the order of one mission per year.

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NEWS IN BRIEF / KURZMELDUNGEN

At IATA's "Cabin Health 2001" Conference, 17/18 May in Geneva, a particularly intense debate took place on DVT. The shared view of the medical community and the airlines is that there is at present no firm evidence that flying is a specific risk in itself. There is a shared view amongst the medical community and the air transport industry that it is known pre-existing conditions or factors and immobility, rather than the cabin environment itself, which are the key elements in developing DVT. "It is at this point that common sense and cooperation come into play," continued Jeanniot. "Airlines will continue to encourage common sense, simple, measures on the part of passengers, many of them involving gentle exercises, which can guard against DVT and make the journey a better experience. At the same time, and in the best public health tradition, it is essential that airlines and the world medical community cooperate to obtain the best information possible on any links, however tenuous they may be, between flying and the condition."
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On May 23, NASA's X-40A, a prototype of a space-return vehicle, successfully completed its seventh and final test flight, gathering information and clearing the way for future flights of its larger brother, the X-37. The unpiloted X-40A, an 85-percent scale model of the X-37, 22 feet long and about 2,600 pounds, was released from an Army helicopter above NASA's Dryden Flight Research Center, Edwards, CA. The series of two-minute descents provided valuable information for development and testing of the full-scale X-37 orbital and re-entry vehicle. "Every X-40A free-flight test met or exceeded our expectations," said Susan Turner, X-37 program manager at NASA's Marshall Space Flight Center, Huntsville, AL. "The most significant thing we learned is that our predictions for X-37 are right on target." The X-37 experimental space plane is designed to demonstrate technologies in the orbital and reentry environments for next- generation reusable launch vehicles that should increase both safety and reliability, while reducing costs by tenfold.
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Air Berlin in May became the first airline in Europe to operate a Boeing Next-Generation 737-800 equipped with winglets that were installed during production in the Boeing factory. Other carriers have chosen to retrofit winglets onto 737-800s already operating in their fleet. Winglets increase trip range up to 130 nautical miles (240 kilometers), lower operating costs by reducing fuel burn, and decrease emissions and takeoff noise. Air Berlin is a German carrier that offers scheduled tourism services.
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In the ongoing wage dispute between Lufthansa and Vereinigung Cockpit (VC) an agreement on arbitration has been signed by both parties. In full agreement, both sides have won former Foreign Minister of the Federal Republic of Germany, Hans-Dietrich Genscher as the arbitrator. In view of his vast experience, both in the fields of international politics and collective wage bargaining, Mr. Genscher enjoys the confidence the parties concerned, who have agreed to commence talks without delay at an undisclosed location. Both Lufthansa and VC expressed their interest in quick resolution of the dispute. Lufthansa and the Vereinigung Cockpit (VC) pilots union have agreed (Tuesday evening, May 22, 2001) to take their pay dispute to arbitration. Arbitration procedure is to start as soon as possible. The VC union have undertaken to refrain from industrial action during arbitration.
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The Swissair Group has appointed Jacqualyn Fouse as its new Chief Financial Officer. The 40-year-old American joins the aviation group from Nestlé S.A. in Vevey, Switzerland, where she is currently Group Treasurer. Fouse, who has been with the Nestlé Group since 1986, will assume her new position on July 1. "I am very much looking forward to the exciting challenges that await me in my new role and to working hand-in-hand with the team of over 70 000 Swissair Group employees," she said, commenting on her appointment. Fouse will be the first woman to serve on Group Executive Management, the Group's top management body.
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The Austrian Airlines Group recorded further strong increases in its revenue and operating revenue in the first quarter of 2001, even though expenses also grew considerably following the full consolidation of Lauda Air, investment in new aircraft and extremely high fuel costs. The streamlining of the Group, which was begun last year, has been consistently taken forward: as a result, significant synergy effects may now be expected as soon as the second half-year of 2001. The EBIT for the first quarter was EUR -51.9 million (2000: EUR -22.3 million) and profit before tax stood at EUR -61.1 million (2000: EUR -34.2 million). When adjusted for profits from asset sales (EUR 2.0 million), the results are on budget. The decline in results in the first quarter needs to be seen in the context of the strongly seasonal business cycle that is typical for airlines. Again, the full consolidation of Lauda Air had an intensifying effect here. Based on a change in working capital and increased depreciation, cash flows from operating activities of the Austrian Airlines Group increased from EUR -21.5 million in the first quarter of 2000 to EUR 13.3 million this year. The first quarter was marked by a further rise in passenger figures (+9.1 %) and strong growth (+7.7 %) in the Cargo Division. EBIT for the first quarter stood at EUR -51.9 million, after EUR -22.3 million in the comparable period the previous year. Profit before tax reached EUR -61.1 million against EUR -34.2 million in the first quarter of 2000. When adjusted for profits from asset sales, however, (EUR 2.0 million compared with EUR 10.0 million), the results for the first quarter of 2001 are on budget.
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The U.S. Air Force Global Hawk unmanned aerial vehicle program surpassed 1,000 hours in flight recently, while supporting a 25-hour mission here for exercise Tandem Thrust North 2001. Reaching an altitude of more than 63,000 feet, Global Hawk -- a high altitude, long endurance, intelligence, reconnaissance and surveillance platform -- flew its 81st sortie, increasing the total hours flown to 1001.7, said Col. Wayne Johnson, Global Hawk division program director. The UAV arrived in Australia on April 23 following a 23-hour flight, 7,500 miles across the Pacific. The UAV will fly six more missions in Australia, three supporting Tandem Thrust and three maritime/littoral surveillance sorties, Johnson said. Global Hawk is scheduled to return to Edwards Air Force Base, Calif., on June 7.
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Bombardier Aerospace announced it has finalized a sale with Phoenix-based Mesa Air Group for up to 80 Bombardier CRJ regional jet aircraft, confirming a letter of intent announced earlier this spring. The deal calls for the U.S. regional carrier to purchase 20 70-seat CRJ700 and 20 86-seat CRJ900 aircraft plus 40 options. The firm aircraft portion of the transaction is worth approximately U.S.$1.2 billion (Cdn.$1.9 billion). Deliveries of the firm aircraft will begin in the first quarter of 2002 for the CRJ700 and the first quarter of 2003 for the CRJ900. Mesa intends to operate the aircraft on behalf of America West Airlines under a recently concluded long-term code sharing agreement.
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The European commercial aircraft manufacturer Airbus (headquartered in Toulouse, France) announced the establishment of its subsidiary, Airbus Japan K.K., as of May 11. With the establishment of its new subsidiary, Airbus will intensify full-scale marketing and sales activities in the Japanese market. The office of Airbus Japan is located at Marunouchi, Chiyoda-ku, Tokyo - Japan's business and finance center. Noël Forgeard, Chief Executive Officer of Airbus, and other senior executives visited Tokyo to inform airline companies, aircraft manufacturers, and governmental organisations of the formation of Airbus Japan K.K., demonstrating the European manufacturer's commitment to the Japanese market. Forgeard said, "We have consistently won about half of the new order intake worldwide for the past five years and have become the joint number one commercial aircraft manufacturer in the market for airliners with more than 100 seats. We have increased our market share in North America and China by establishing local subsidiaries with well-organized sales and customer support task forces. In order to increase our market share in Japan and to build closer ties with Japanese industry, we have established Airbus Japan K.K.," he added.
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A Boeing Delta II 7925-9.5 expendable launch vehicle lifted off on 18 May at 1:45 p.m. EDT from Space Launch Complex-17B, Cape Canaveral Air Force Station, carrying a satellite for the National Reconnaissance Office (NRO). The satellite, GeoLITE (Geosynchronous Lightweight Technology Experiment), is an advanced technology demonstration satellite with a laser communications experiment and an operational UHF communications mission. GeoLITE was built by TRW of Redondo Beach, Calif., and will be operated by the NRO once in orbit. The Boeing Delta II maintains a 100 percent success rate since 1997 and is capable of delivering payloads of 898 kg to 2,030 kg to geosynchronous transfer orbit. The NRO, a Department of Defense agency located in Chantilly, Va., is responsible for the engineering, development, acquisition and operation of space reconnaissance systems.
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On May 23, the first of four Boeing C-17 military cargo aircraft being leased to the United Kingdom Royal Air Force arrived today at RAF Brize Norton, its new home base. The aircraft was flown in from Charleston Air Force Base in South Carolina where it picked up support equipment. Wing Commander Malcolm Brecht, commander of the RAF's 99th Squadron, was at the controls for its delivery flight. Also on board for the historic flight was U.S. Air Force Gen. Tony Robertson, Commander in Chief, U.S. Transportation Command. All four U.K. C-17s will be delivered this summer. They are being acquired on a seven-year lease arrangement, with training and maintenance support through a separate contract with the U.S. Air Force and Boeing.
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Tom Enders, head of the defence and civil systems division of European aerospace group EADS has depplored declining European defence spending and wondered if industry consolidation and cooperation alone could make Europe strong in defence. "The industry cannot walk over water. If Europe wants to become strong in defence, it has to significantly increase its defence spending," he told the "Forum Europe" defence industries conference in Brussels "There is no way industry can compensate for lagging defence budgets in Europe."
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Integral Systems has won contracts to provide its Epoch 2000 control centers for three upcoming NASA scientific satellite missions. Financial terms of the contracts were not disclosed. The contract was awarded recently by the Johns Hopkins University Applied Physics Laboratory (APL), the prime contractor to NASA for the three missions. The three missions, planned to take place over the next five years, are Contour, which will visit the nuclei of two comets; Stereo, which will observe solar eruptions known as coronal mass selections; and Messenger, which will orbit Mercury. The company said APL already is using its Epoch 2000 system for two current missions, Near, a satellite that recently made the first landing on an asteroid, and Timed, an atmospheric observatory planned to launch this summer. Integral, headquartered in the Washington suburb of Lanham, Md., supplies control and management
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On May 23, NASA's Galileo spacecraft passed the closest point to Jupiter of the spacecraft's current orbit of the giant planet, and remains healthy as it heads for a flyby of Callisto, the outermost of Jupiter's four largest moons. Galileo swung within about 460,000 kilometers (about 285,000 miles) of Jupiter's cloud tops at 10:33 a.m. PDT time, according to engineers managing the spacecraft from NASA's Jet Propulsion Laboratory, Pasadena, Calif. Flying that close to Jupiter exposes the spacecraft's electronics to potential harm from intense radiation belts."We have indications Galileo is bearing up well to the harsh environment, but it is still in a challenging environment," said Dr. Eilene Theilig, Galileo project manager at JPL. "As anticipated, we are seeing an intermittent anomalous behavior in the camera, similar to what we saw during Galileo's last encounter five months ago. Prior to high-priority observations, we plan to cycle power to the instrument off and on to decrease the risk of losing images. Cycling the power has cleared the intermittent anomaly in the past." Galileo is on course to pass within about 123 kilometers (76 miles) of Callisto at 4:24 a.m. PDT on Friday. Galileo has succeeded at more flybys of assorted worlds -- including Venus, Earth, and two asteroids as well as Jupiter's four largest moons -- than any other spacecraft, and Friday's will be its closest yet.
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The Anglo-Swedish BAE Systems Plc/Saab Aerospace consortium behind the JAS 39 Gripen fighter is reportedly the only bidder left in the tender to supply the Czech air force new fighters.According to the online edition of the Prague Business Journal, all other participants, the US companies Boeing and Lockheed Martin, the Eurofighter consortium (EADS, BAE and Finmeccanica) and the French company Dassault Aviation, have withdrawn from the race. The Financial Times has reported that the US bidders were ordered to withdraw as the US government allegedly felt that they were not allowed to participate in the bidding on an equal footing with their European competitors. According to unofficial sources quoted in Czech media, Eurofighter and Dassault Aviation withdrew after speculation that BAE Systems/Saab had already unofficially been selected. The Czech government has played down the importance of the withdrawals but opposition politicians have called on the Cabinet to consider cancelling the tender which, they claim, threatens to discredit the country. The Czech fighter tender has previously been criticised for being too complicated and for being affected by lobbying.
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At the conclusion of a successful Board of Directors meeting in Berlin, MEADS International announced Joel Strickland of Lockheed Martin as its new president. Since the creation of MEADS International in 1996, Strickland has held primary responsibility for integration of technology for the Medium Extended Air Defense System and has served as the company's executive vice president for the past 3 years. In line with the company's charter agreement, the announcement marks a rotation to an American president after 36 months of German leadership. The change positions MEADS International to begin the MEADS Risk Reduction Effort (RRE) contract with its senior management team in place. Strickland succeeds Dr. Jurgen Ebmeyer, who returned to Germany. Succeeding Strickland as executive vice president of MEADS International is Klaus Riedel of EADS/LFK. In announcing the management transitions, Binder said, "We recognize the role of the MEADS program as the model for successful transatlantic defense cooperation. Through these leadership changes, which were outlined during the formation of our company 5 years ago, we again demonstrate that this cooperation is working at the highest level, and we expect to show the benefits of shared technology development to make MEADS uniquely cost-effective for each of the participating countries."
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