_Aerospace Daily

Staff
Aerospace/Defense Stock Box As of closing March 12, 1998 Closing Change UNITED STATES DowJones 8602.52 -57.04 NASDAQ 1771.66 +7.60 S&P500 1068.59 -1.33 AARCorp 29.438 -.062 AlldSig 40.625 -1.000 AllTech 64.250 +.188

Staff
House Appropriations national security subcommittee chairman Rep. C.W. (Bill) Young (R-Fla.) has adopted the practice this year of starting off hearings on the military services' budget requests by reminding the service brass that "this year is a little different. We don't have that cushion of a little money over the budget." House National Security Chairman Rep. Floyd Spence (R-S.C.) concluded a hearing on the services' unfunded fiscal 1999 requirements last week by imploring the service chiefs to help make the case for more money for defense.

Staff
British Aerospace and Rolls-Royce praised an announcement late Thursday by U.K. Science, Energy and Industry Minister John Battle that the British government will raise the foreign shareholding limits for the two companies to 49.5%. "The changes are designed to promote the competitiveness of these companies by increasing their freedom to operate commercially in world markets," Battle said in a written answer to a Parliamentary question.

Staff
The U.S. Navy's plan to develop and buy the Tactical Tomahawk variant of the Tomahawk Land Attack Missile was prompted by Navy needs, not a desire to bail out Hughes from losses on the TLAM program, the Pentagon's Inspector General has concluded.

Staff
The U.S. Air Force expects delivery of the first Lockheed Martin C- 130J to be delayed further after an icing problem with the new transporter forced Lockheed Martin to slip delivery to its launch customer, the British Royal Air Force.

Staff
ACTD DEVELOPMENT: Every Advanced Concept Technology Demonstration should be followed by at least a short engineering and manufacturing development phase, Hawley says. That's at least one of lessons the Air Force has learned after it took over the Predator unmanned aerial vehicle. The length of the development program would depend on each system, he says, but it would allow the service to bring on training programs and equipment and work technical details. The AF is now putting Predator through a block upgrade program to get its desired capability.

Staff
The Pentagon next fiscal year plans to spending about $14.2 billion on research and development and procurement of classified programs, the Center for Strategic and Budgetary Assessment said Friday. The spending level represents about 17% of what DOD is spending overall on weapons acquisition. That level is on the order of what DOD has allotted to "black" programs over the past 10 years.

Staff
The service chiefs of the U.S. Army, Navy, Marine Corps and Air Force have told Congress they need assurances that by April 1 a non-offset supplemental to the fiscal 1998 defense budget will be forthcoming, or else readiness or modernization could suffer. Air Force Chief of Staff Gen. Michael E. Ryan told Congress in a late February letter that without a guarantee by April 1 day-to-day operations might suffer. The funds themselves have to be made available by July "to avoid severe program impacts and mission degradation."

Staff
Sabena has signed a contact for 34 A320s and two more A330-200s, while Swissair has ordered nine ultra-long-range A340-600s, Airbus reported last week. Both announcements affirm earlier commitments. The Sabena decision caps a battle between Airbus and Boeing to replace the carrier's 737 fleet. The carrier revealed late last year it had selected Airbus. Sabena selected CFM International engines for its new A320s. Swissair selected Airbus last December.

Staff
ALL IN THE FAMILY: The Ballistic Missile Defense Organization is trying to identify what new investments it has to make in its FY '00 Program Objective Memorandum to ensure all its family of theater missile defense (TMD) systems are interoperable as they come on line over the upcoming years, says Brig. Gen. Richard Davis, BMDO deputy for theater air and missile defense.

Staff
The Senate Commerce Committee yesterday adopted an amendment to the fiscal year 1998 NASA authorization bill imposing a $21.9 billion cost cap on the International Space Station. The amendment, proposed by Commerce Committee Chairman John McCain (R- Ariz.) and Sen. Kay Bailey Hutchison (R-Tex.), imposes the $21.9 billion cap on Space Station spending "through completion of assembly" and a $17.7 billion cap on "Space Shuttle launch costs in connection with assembly of the International Space Station," according to the printed committee amendment.

Staff
Pratt&Whitney Canada's Service Center network took over H+S Aviation Ltd.'s PW100 and PT6T turboprop engine overhaul business under a new deal whose terms weren't disclosed. Based in Portsmouth, England, a new unit - Pratt&Whitney Canada (UK) Limited - is doing repair and overhaul work on both PW100s and PT6T Twin-Pacs, using H+S's existing facilities. P&WC says that P&WC-UK, along with the P&WC/MTU Customer Support Center, will "provide total customer service for all operators in Europe, the Middle East and Africa."

Staff
ORDERS Ryanair ordered CFM International CFM56-7B turbofans valued at $300 million to power 25 737-800s on firm order from Boeing. Deliveries will begin next year....CFM International says China Eastern placed an order valued at $140 million for CFM56-5B/P engines to power 10 new leased Airbus A320 aircraft. The first aircraft was already delivered last month; the rest will be delivered by 2000....Aeromexico leased a Pratt&Whitney- powered 767-300ER from International Lease Finance Corp. for delivery in November on a 77-month lease.

Staff
Wood Dale, Ill.-based AAR Corp. turned in 57% better third-quarter profits on sales that were 35% ahead of last year's pace, the company reports. AAR earned $9.3 million on $208.5 million in sales - both record figures - in its fiscal 1998. Operating profits were up nearly 51% against year-ago levels to $17 million. So far this year, profits stand 57.1% higher at $25 million, compared with $15.9 million during the like period in 1997. Sales are up 31.4% to a record $559.6 million.

Staff
Phillips 66 is bringing back single-grade ashless dispersant aviation oil for opposed piston engines nearly two decades after it dropped its Type A 100AD single-grade oil, because many owners and pilots still want just a single-grade oil, the company says.

Staff
Three-year-old Extex, the Mesa, Ariz. parts manufacturer, delivered its 1,000th Allison Model 250 engine nozzle to Era Aviation of Lake Charles, La., and 500th compressor wheel to Airborne Engines of Richmond, British Columbia. The new company, headed by former Orenda Engines chief Larry Shiembob, has met its sales targets sooner than expected. "The market has responded very strongly to our offerings," Shiembob says.

Staff
A Florida federal court sentenced 32-year-old Jose Costales, Jr., to 12 years inprison and imposed a $1.3 million fine for robbing repair stations of jet engines, Allison turbine engine blades and other engine components, and then re-selling the stolen goods. A second defendant, Guy Salom, was sentenced to an 18-month term for his role in the scheme.

Staff
NASA officials are meeting with their Russian counterparts this week at Johnson Space Center in Houston to discuss Russia's plan for de-orbiting the Mir space station, NASA Administrator Daniel S. Goldin told lawmakers yesterday. "We remain concerned about the status of the RSA plans to de-orbit the Mir space station," Gore told the House Appropriations subcommittee on VA, HUD and independent agencies.

Staff
The Lockheed Martin Intersputnik Ltd. joint venture will launch its first satellite, LMI-1, late in December on a Russian Proton rocket, the companies announced yesterday.

Staff
Spain's Iberia airline expected this week to get bids from both CFM International and International Aero Engines in launching the competition to power up to 76 Airbus A320-series aircraft, a US$900 million contest. That's based on what airline executives describe as a "face value" of 140 billion pesetas, but insiders expect discounting and market share considerations to take a considerable sum off that total. Iberia is buying nine Airbus A319s, 36 A320s and 31 A321s.

Staff
Landsat 7 will not be launched as planned in July because the electrical supply hardware for the Earth remote sensing spacecraft must be modified, NASA reported yesterday. Meanwhile the Advanced X-ray Astrophysics Facility (ASAF), itself delayed because of checkout problems at TRW, has been completed and should be ready for launch in December, the U.S. space agency said.

Staff
A proposed upgrade program to the U.S. Air Force's 126 C-5 transport aircraft would boost the dispatch rate of the aging and not-so-reliable aircraft to levels near those the service is achieving with its newest transporter, the C-17, according to AF Gen. Walter Kross, commander-in- chief of U.S. Transportation Command and chief of the AF's Air Mobility Command.

Staff
With the West's medium turbofan specialists all jockeying to re-engine nearly 200 Air Force Boeing 707s (AP, Feb. 13), CFM International reports that two CFM56-2As powering a U.S. Navy E-6 TACAMO aircraft have set a new U.S. military record for engine time on wing, logging more than 10,000 flight hours without a single shop visit - and so far, the engines still aren't scheduled for removal.

Staff
U.S. airlines, coming off a fourth straight year of strong traffic growth and record profits, will experience a growth rate of 3.5% for the next 12 years, according to an FAA forecast issued yesterday. The growth rate for international routes will be 5.8%, DOT Secretary Rodney Slater said in remarks prepared for yesterday's 23rd annual Commercial Aviation Forecast Conference in Washington.

Staff
China-National South Aero-Engine Co. (SAEC) and Pratt&Whitney Canada formed a joint venture in Zhuzhou, in China's Hunan province, to make gas turbine components. Together the companies are investing US$27 million in Southern Pratt&Whitney Aero-Engine Co. Ltd., with SAEC holding a 51% stake. SAEC is controlled by the Aviation Industries of China (AVIC), and the latest deal marks the third joint venture between Pratt&Whitney and an AVIC engine company. Chinese partners and P&W parent United Technologies have formed 20 joint ventures over the years.