The global helicopter business faces little or no prospect for growth in the next 12-36 months as a weak economic climate and fallout from last year's terrorist attacks force operators to intensify efforts to control costs and survive on razor-thin profit margins.
Zurich-based Gate Gourmet, a subsidiary of the bankrupt Swissair Group, is expected to be acquired soon by U.S. investors. The Texas Pacific Group, a private equity firm, has entered into an exclusivity agreement to buy the airline catering company. The transaction is tentatively scheduled to be completed in the second quarter. Gate Gourmet has 26,000 employees and operates 152 kitchens in 33 countries. Last year, it posted nearly $2 billion in revenues.
Transportation Secretary Norman Mineta said last week that the nation's largest airline screening service, Argenbright Security Inc., will be phased out of all airport operations beginning Feb. 17. Previously, Argenbright was expected to continue its work until November. As a practical matter, the announcement may not mean much. The Air Transport Assn. said it reached agreement with the Transportation Dept. to maintain the status quo for 45-60 days to allow the new Transportation Security Administration to hire federal screeners and implement contingency contracts.
EUROCOPTER REPORTS GROWING DEMAND for its helicopter product line, especially in the entry-level and single-engine segments. According to the company, Eurocopter has received 294 orders for the single-engine EC 120B and has delivered 251 to customers. The EC 130B4 has garnered 27 orders and eight are in service, while orders for the twin-engine EC 135 have reached 258, with 183 delivered. Eurocopter is scheduled to deliver the first EC 145 this month and has orders for 48 of the aircraft, while the EC 155 has captured 50 orders and 26 have been delivered.
Standard&Poor's last week lowered its ratings on Boeing Co. and Boeing Capital Corp., reflecting the likelihood of ``significantly weaker'' commercial aerospace business for the next few years.
The eight nations participating in the planned A400M airlifter have agreed to a compromise proposal to save the embattled program, and have given Germany until Mar. 31 to obtain parliamentary approval for it, French defense ministry officials said last week.
European airline passenger traffic is slowly returning to its pre-Sept. 11 level. However, transatlantic demand remains weak and is significantly retarding overall recovery. In late January, international traffic figures reported by the Assn. of European Airlines (AEA) were 2.8% below those of January 2001. This is a robust improvement over mid-December (-13.5%) and a major comeback from the dramatic September/October plunge (-20%).
The U.S. Air Force will upgrade some of the nation's most long-lived missile warning/defense and space-object tracking systems under a new contract that could reach $959 million, if all options are exercised over the next 18 years. ITT Industries Inc. received the $519-million cost-plus-award-fee contract to upgrade U.S. Ground-Based Electro-optical Deep Space Surveillance (GEODSS) systems and the Ballistic Missile Early Warning System (BMEWS). As the System Engineering and Sustainment Integrator contractor, ITT's Systems Div.
Russian cargo specialist Volga-Dnepr is looking at the option of acquiring two used Antonov An-124 four-engine heavy transport aircraft from the Russian government as an alternative to purchasing two aircraft being built at the Ulyanovsk production facility in central Russia (AW&ST Dec. 17, 2001, p. 86). The cargo airline has nine An-124 aircraft on its inventory, and is about to apply for European type certification. Volga-Dnepr officials say they will submit a formal application through the British Civil Aviation Authority in March for European JAA certification.
NASA added $936 million to Boeing's prime contract for the International Space Station, covering new work in the areas of sustaining engineering and operations through the end of December 2003. The funds, covered in the Fiscal '03 budget request sent to Congress last week, mark the continued transition of the station program from development to operations. With the modification, Boeing's ISS prime contract, awarded in 1995, now totals $10.7 billion.
Fresh from a radical shakeup in its shareholding structure, Mil is attempting to build up revenues through subcontracting and product improvement; broaden acceptance of its wares beyond the CIS and the Third World, and put some life into languishing product development efforts. A dry-up of government orders, combined with an inability to compete on the world market, led the Moscow-based Mil Helicopter Plant into bankruptcy at the end of 1998. The company went through a succession of court-appointed trustees as rival investors struggled for control.
The Future Imagery Architecture, the next-generation intelligence satellite system, is headed for some close scrutiny. Peter B. Teets, the new director of the National Reconnaissance Office (NRO) and undersecretary of the Air Force, says he has ``some concerns'' and fears ``downstream problems.'' Contractor Boeing contends it is working up to snuff. Teets agrees, sort of, saying the company is ``fundamentally'' on schedule and within budget. The same can't be said for the Space-Based Infrared System-High project.
United Airlines, under analysts' scrutiny as an endangered aviation species, will focus on labor concessions and business-flier yields in its attempt to make it through 2002 and return to profitability. As major news media quoted dire speculation about the No. 2 U.S. carrier--bankruptcy in The New York Times, a federal loan guarantee application in The Washington Post--top company officials reported dismal 2001 financial results Feb. 1 and acknowledged that their short-term plans depend on challenging negotiations.
The White House proposal to spend almost $40 billion next year on homeland defense to prevent another Sept. 11 is no more than a down payment in the twilight struggle against ``undeterrable'' terrorism. In the next 30 years, the U.S. may have to pay hundreds of billions of dollars to overcome a global scourge which probably will include the use of biological, chemical and nuclear weapons of mass destruction (WMD) against mass urban populations.
NASA's $15-billion Fiscal 2003 budget request marks a second chance from White House managers for an agency that still can't say for certain just how much it will cost to complete even a truncated version of the International Space Station. Although the Bush Administration didn't give NASA a funding increase, it didn't whack away at it either, as some had predicted with the war on terrorism driving the federal budget deeper into the red.
Jeffrey P. Pino has been named senior vice president-marketing and commercial programs for the Sikorsky Aircraft Corp., Stratford, Conn. He was senior vice president-commercial and international business for Bell Helicopter Textron. R. Michael Baxter, who was head of government programs, has been appointed vice president-business development. Paul W. Martin, formerly vice president-engineering and advanced development programs, has become senior vice president-government and advanced development programs. He has been succeeded by Mark F. Miller. Robert R.
U.S. and French engineers have begun work upgrading Manas international airport, near Bishkek, Kyrgyzstan, so that it can handle fighter aircraft. The U.S. plans to station 30-40 F-15s and F-18s; and France, six Mirage 2000Ds and a pair of C-135F tankers. Around 3,000 American troops and 400-500 French personnel are to be stationed in Manas, which is expected to be operational by the end of the month.
Already a risk-sharing partner in Bombardier's Global Express program, Mitsubishi Heavy Industries is expected to take a role on the Global 5000 intercontinental derivative, which was introduced in October 2001. When operating at Mach 0.88, the aircraft will have a range of 3,700 naut. mi.--slightly more than half of the larger Global Express. Bombardier officially launched the program last week with 15 letters of intent and wants MHI to design, manufacture and integrate the main wing and center fuselage, as it did on the Global Express.
Korea Aerospace Industries has added Tecnomatix Technologies Inc.'s eM-Power suite to the software tools it is using to manage production of the T-50 supersonic trainer project (AW&ST Dec. 3, 2001, p. 58). The trainer/light attack fighter is expected to have its first flight in June with production to begin in 2003.
Wall Street's defense industry analysts expect all prime military contractors to benefit if Congress approves the Bush Administration's $379.3-billion Defense Dept. budget request for Fiscal 2003. ``This will be a rising tide that will lift all boats,'' predicted Credit Suisse First Boston analyst Pierre Chao, who favors companies specializing in defense electronics and information systems.
Canada will spend US$150 million for its 10-year participation in the Joint Strike Fighter system design and development phase. Canadian officials believe the project could spark around US$6 billion in revenue in Canada through JSF's life. The Canadian military would replace its CF-18s with JSFs, but that wouldn't happen until after 2017, says Alan S. Williams, Canada's assistant deputy defense minister for materiel.
Stephen Zujkowski, formerly president of Qiva, has become senior vice president of business development/strategic accounts for Savi Technology. Melvin Poi, former Asian general manager for Ariba, has become vice president-sales and marketing for most of Southeast Asia.
Singapore Airlines (SIA) has accelerated the phaseout of its A340-300 fleet from March next year to February. The original target date wasOctober 2003, but that goal was shifted last December. SIA now operates nine A340s from a high of 17 that it had early last year.
Officials at regional carriers American Eagle and American Connection are preparing to slash available seat miles to help parent company American Airlines honor its contract with the Allied Pilots Assn.
Emboldened by the performance of unmanned aircraft in the Afghan war, the Bush Administration is keeping alive last year's commitment to fund them and advance efforts to arm a variety of these systems. The Fiscal 2003 budget request would accelerate by two years the fielding of an Air Force unmanned combat aircraft. The Defense Advanced Research Projects Agency-led development of a Boeing design would result in the first operational UCAV squadron (totaling 14-24 aircraft) in 2008.
