Two Advanced Training Systems International A-4 Skyhawks fly over the Bitterroot Mountains of Montana during a deployment to Canada. The Phoenix-based company flies 12 privately owned A-4s, and provides a variety of tactical air, training and flight test services for military customers. ATSI is training two classes of United Arab Emirates pilots in advanced fighter tactics (see p. 44). Photo by ATSI pilot Steve (Skids) Donnelly.
With the market flooded with used business aircraft and the general economy still weak, this would seem to be an especially risky climate in which to launch a new jet program. But that's exactly what Israel Aircraft Industries Ltd. is doing in a strategic alliance with a newly formed company, Avocet Aircraft LLC, headquartered in Westport, Conn.
Led by a notable jump in orders and a satisfactory operating result, EADS appears set to weather a difficult year and to reap benefits when the market rebounds. The aerospace and defense group reported half-year earnings before interest and taxes of 592 million euros ($680 million), down 29% from a year earlier, on sales of 13.1 billion euros (-7%). It posted a net loss of 66 million euros, compared with a net gain of 93 million euros a year before.
BLAME GAME A recent parliamentary report blames India's high number of MiG-21 crashes on "human error," although the country's air force is investigating potential quality control problems at Hindustan Aeronautics Limited (HAL). The Indian Air Force investigation follows the September 2002 crash of a HAL-upgraded MiG-21 and a decision to call in Russian MiG experts to help resolve technical problems. A spate of MiG-21 crashes have occurred in the interim. But the air force also defends the MiG-21's performance, noting that its accident rate is in-line with other aircraft.
After years of program delays and other adjustments, RAH-66 Comanche scout helicopter-makers Boeing and Sikorsky are about to start assembly of the first of nine engineering and manufacturing development aircraft.
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BONDS THAT TIE Fast-expanding Finmeccanica has decided to leverage its 18.3% stake in microprocessor manufacturer STM through a 440-million-euro ($506-million) convertible bond issue that could be used to finance new aerospace and defense acquisitions. The issue, which carries 0.375% interest and has been well received by institutional investors, could net 500 million euros by its July 29, 2010, expiry date.
For years, ex-fighter pilots having an entrepreneurial bent have extolled the benefits allied nations and the Pentagon could realize by outsourcing tactical pilot training. Private firms could provide economical "red air" or adversary fighter services, fly cruise and sea-skimming missile profiles, carry electronic warfare jamming pods and simulate "enemy" strikers attacking land- and sea-based targets--all for less money than military forces spend doing these tasks in-house.
Mitsubishi Heavy Industries, Arianespace and Boeing Launch Services have revealed a mutual backup agreement that will allow their customers to switch rapidly to each other's boosters in the event of a launch failure. The move was critical to the three companies, whose internal backup options, with the demise of older boosters and Boeing's decision to focus the Delta IV on military business, are now limited. This position contrasts to that of International Launch Services, which can allow clients to chose between the Atlas V and Proton.
US Airways reduced its unit costs and attained its best revenue performance compared with the rest of the U.S. airline industry since late 1999, but its bottom line in the second quarter still was what CEO David Siegel termed "less than stellar."
INDIAN SPENDING The Indian military is scheduled to buy 6-8 Heron unmanned aerial vehicles. The decision to acquire the medium-altitude endurance system built by Israel Aircraft Industries' Malat division was made several months ago, according to officials. India also is slated to spend some of its $13-billion defense budget on six Embraer Legacy business jets. Aircraft bought under the $130-million deal would be used by the air force's executive transport communications squadron, which currently operates Boeing 737s, Avros and Dorniers.
Spurred by a fifth consecutive profitable quarter, AirTran Airways executives waxed bullish about service to the western U.S., competition with Delta Air Lines and overall prospects for further growth.
Christophe Chicandard (see photo) has been appointed sales director for business aircraft in Canada for Bombardier Aerospace of Montreal. He was vice president-airline marketing, at New York-based CIT Aerospace.
CHINESE GROUND DEAL In another recent win for Alcatel, China has awarded the French manufacturer a satcom deal. After being chosen last year to supply the payload for China's DFH-4 telecom satellite, Alcatel has been picked to provide a turnkey "DSL-in-the-sky" satellite Internet access network. Under the award from Internet service provider Nanjing Toptry China-Spacenet Co., Alcatel will provide ground-based satellite links, consumer processing equipment and a network management system.
ATA Airlines reduced costs by 30% on a year-over-year basis and turned a modest profit in the second quarter, but hard-pressed by a revenue shortfall the carrier faces a 2004 challenge to meet $549.2 million in debt and lease payments.
Singapore Airlines Group performance in its April-June first quarter was pummeled by the combined effects of war in Iraq and the severe acute respiratory syndrome (SARS) crisis. Group revenue declined 35% year-over-year, with the group reporting an operating loss of S$377 million ($214.1 million). This compares to a S$271 million profit in the first quarter last year. After-tax loss totaled S$312, or 25.6 cents per share, compared to an after-tax profit of S$478 million last year.
Boeing's use of proprietary pricing information allegedly stolen from Lockheed Martin Corp. to win the Evolved Expendable Launch Vehicle (EELV) competition in 1998 almost certainly will mushroom into an even more costly blunder than has emerged thus far. "People haven't connected the dots yet," a major investor told Aviation Week & Space Technology. Boeing is facing damages of at least $500 million, and if punitive damages are included, the total easily could exceed $1-1.5 billion, according to legal sources close to the case.
6 Correspondence 7 Who's Where 8-9 Market Focus 11 Industry Outlook 13 Airline Outlook 15 In Orbit 16-17 World News Roundup 19 Washington Outlook 51 Classified 52 Contact Us 53 Aerospace Calendar
Greg L. Riggs has been promoted to senior vice president/ general counsel from vice president/deputy general counsel of Delta Air Lines, effective Sept. 1. He succeeds Robert S. Harkey, who will retire on Dec. 31. Walter A. Brill and Lesley P. Klemperer also have been promoted effective Sept. 1, to vice president/deputy general counsel. Brill has been vice president/associate general counsel and Klemperer vice president/associate general counsel/assistant secretary.
NEW PIAGGIO AERO SHAREHOLDER The Italian government has become a major shareholder in Piaggio Aero through Sviluppo Italia, a state-owned investment and holding company. Sviluppo acquired a 24% stake in the light aircraft manufacturer for 20 million euros under a recapitalization plan intended to raise 35 million euros in new equity. Massimo Caputi, Sviluppo Italia's top manager, will assume the vice president's post at the troubled company.
Northrop Grumman, Lockheed Martin and Raytheon recently posted second-quarter financial performances that beat what Wall Street anticipated, while Goodrich reported results that fell well short of expectations.
General Electric executives are painting a gloomier picture of the current downturn in the aerospace manufacturing business than most companies, and are now predicting that an improvement in commercial aircraft deliveries should not be expected until the second half of 2006 or early 2007. Speaking at a press conference here, David L. Calhoun, president and CEO of GE Aircraft Engines, said he realized this is a more conservative estimate than other major manufacturers are forecasting, "but it's smart to bet that way."
Glenn S. Johnson has become vice president-finance at Alaska Airlines. He was senior vice president-customer services of subsidiary Horizon Air and has been succeeded by Andrea L. Schneider. She was staff vice president-station operations and cargo services for Alaska Airlines.
