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United Technology - less the Rocketdyne technology part

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Three messages come out of the move by United Technologies - parent company of Sikorsky, Pratt & Whitney and Hamilton Sundstrand - to rejig its plans for actually paying the $16.5 billion it's soon going to have to lay down to close its acquisition of Goodrich.

One: we're not in 2007 anymore. Back in those heady pre-crisis days, raising a quarter of the price in new equity and the rest in debt would have been normal enough to do a deal that created a commanding position in a fast-growth industry like civil aerospace. Many such deals were done, of course, and when the crisis hit it didn't seem so wise to have taken on the debt, but that's the value of hindsight.

So, it's no surprise that UTC has surrendered to market unease - and fears that its credit rating would take a hit - with a new plan to raise no equity now and take much less debt by parting with some cash, raising some more by divesting a few "non-core" businesses, and issuing some bonds, convertible to equity at maturity. In retrospect, it is a surprise that the original equity-and-debt plan was settled on at all.

Two: $16.5 billion is a lot of money. This deal is perhaps the biggest aerospace industry takeover ever, and it represents a gamble by UTC. Post-deal, aerospace and propulsion revenue will be around half UTC's total (it also owns Otis lifts and Carrier air conditioning, and is a big play in fire and security systems). As things stand, civil aerospace looks like an industry with solid long-term growth prospects, but a sluggish global economy is also a reasonable prospect, so the risk is all on the downside if it turns out (as so often it does) that extrapolating current trends leaves a wide gap between expectations and reality.

UTC has long been heavily diversified company, and while diversification isn't every investor's favourite flavour, UTC does hold what looks to be a basket of winners. Scale and success don't necessarily go together, and the history of mega-acquisitions is littered with failures; company cultures often clash badly, and synergies have a habit of proving elusive. There's lots of work ahead to make this deal a success, and it's entirely possible that UTC and its investors will look back and think they overpaid for Goodrich.

Recall that before news of the UTC offer for Goodrich broke last September, Goodrich shares were trading for $85-90, giving it a market capitalisation of nearly $11.5 billion. On news of the  talks, shared surged to $105, a market cap of some $13.5 billion. UTC is paying $3 billion on top of that.

Three: Pratt & Whitney Rocketdyne hasn't made much noise recently, but it' an interesting company. UTC plans to sell what it sees as a non-core and slow-growth unit it as part of a bid to raise $3 billion toward the Goodrich purchase, but it's worth at least wondering if some valuable expertise is being let go.

True, Rocketdyne has been something of a corporate orphan for decades - spun off by North American Aviation, sucked up into Rockwell, sold off to Boeing and again in the mid-2000s to UTC. And, the end of the Space Shuttle programme's demand for Rockwell main engines and the absence of any serious US space programme to replace it leaves the rocket engines specialist without a strong market to play its strength to.

But there's more to Rocketdyne than big rockets. The company sells high technology to such growth industries as solar power generation, and cleverly describes itself as a "power, propulsion and optimization" company skilled at delivering highly-engineered solutions in extremely demanding environments. With no big US space programme to feed its natural order book there may be no big aerospace companies lining up to buy Rocketdyne. But it does sunds like a company you'd like to have, especially if you already own it.



Aviation - it's a question of survival

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While aviation people spend a lot of time and energy worrying about how to squeeze fuel burn a bit or if the wings can be bit more carbon fibre, the ultimate customers - passengers - seem to have very different concerns.

Indeed, Gadget Duck's pitch for the $18.95 Knee Defender suggests that passengers don't give a hoot about economy - what concerns them is mere survival.

According to Gadget Duck, by disabling the reclining mechanism on the seat in front of yours, Knee Defender "helps you defend the space you need when confronted by a faceless, determined seat recliner who doesn't care how long your legs are or about anything else that might be 'back there'...

"If the airlines will not protect people from being battered, crunched, and immobilized - very real problems according to healthcare professionals, medical studies, government agencies, and even some airlines - then people need options to protect themselves."

And, according to Gadget Duck, the stylish device violates no US aviation law, as long as it's not used during taxi, takeoff or landing.

This column, it must be said, neither endorses nor discounts Gadget Duck's claims for Knee Defender's effectiveness - but do note, dear readers, that Gadget Duck does not appear to sell any devices to defend against being punched in the face by an irate passenger in the seat ahead.

The Airport of the Future

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The airports of the future might bear little resemblance with those of today...or so seem to think the winners of the recent '2011 Fentress Global Challenge'. This international contest, launched by airport design firm Fentress Architects and open to architecture and engineering students, aimed to present an unconventional and unconstrained vision of the airport in decades to come.

The results of the contest are certainly impressive: from aircraft that look like flying cars to a modern concept of an airship docking facility.

Airportfuture2.jpgCredit:Martin Sztyk І Fentress Architects

Airportfuture6.jpgCredit: Alexander Nevarez І Fentress Architects

The top prize, though, went to a futuristic and environmentally sustainable vision of London's proposed Thames Estuary island-airport, complete with vertical take-off pads for the aircraft of tomorrow.

Airport delta future.jpgCredit: Oliver Andrew І Fentress Architects

LDNDeltaAirport1.jpgCredit: Oliver Andrew І Fentress Architects

Diverse as all these proposals are, a common theme stands out: space and compactness. Aware of the increasing difficulty of expanding on existing airport facilities, it is likely that the aviation and aerospace industry will need to come up with innovative solutions to increase capacity while reducing the environmental impression. Despite the fact that these projects might have a touch of fantasy, some of these innovative ideas could soon become reality.

Visit our Future Aviation Concepts Gallery to see more

Price of oil? Ask an ayatollah

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2011 - The Year in Review: Top Ten Video Stories

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1. A380 hits CRJ while taxiing at JFK

Video footage emerged showing an Air France Airbus A380 colliding with a Comair Bombardier CRJ700 during taxiing at New York JFK back in April. The A380 "clipped the tail fin" of the parked Comair jet, causing only "material damage".

2. Tu 154 struggles against in-flight oscillation

The video clips below show a TU-154 departing from an air base in Moscow before it appears to encounter problems in lateral and longitudinal control.

It eventually returns to the airfield to land.

 

 

3. Sendai airport deluged as earthquake strikes

 

 

 

4. ANA 737 rolled near inverted after rudder trim blunder

Japanese investigators have detailed the extraordinary in-flight upset involving an All Nippon Airways Boeing 737-700 which resulted in the aircraft banking to a near-inverted attitude.

Flight NH140 from Naha had been cruising at 41,000ft, en route to Tokyo on 6 September, and had been some 43km south of Hamamatsu when the incident occurred.

5. ANA unveils first 787 configuration

All Nippon Airways has unveiled the long-awaited configuration of the first 787 to enter service, outfitting its first 787s with 264 seats for regional and domestic operations, with later regionally-configured aircraft to have 222 seats as the carrier ramps up its initial pilot and cabin crew training.

The aircraft, painted in bespoke white and blue colours highlighting Boeing's Dreamliner brand and ANA's service goals - innovation, uniqueness and the inspiration of Japan - is the eighth 787 built. It is also known as ZA101 and has been registered JA801A.

6. PICTURES & VIDEO: F-35B critical tests

With the beginning of at-sea trials for the Lockheed Martin F-35B, the short take-off and vertical landing (STOVL) variant had entered the most critical phase in a year-long campaign to overcome probation and be spared cancellation.

7. An-12 rolled inverted before Congo crash

Video evidence of an aircraft crash in Pointe-Noire, Republic of Congo in March identified the type as an Antonov An-12 freighter, and showed it rolling inverted moments before impact.

Images of the aircraft's last seconds show it diving steeply and rolling to starboard, crashing inverted.

8. No viable all new single aisle before 2030

Airbus believes that a viable all-new single-aisle airliner will not arrive before 2030, due to the timing of the necessary advances in powerplant technology.

John Leahy, Airbus' chief operating officer, spoke to Flightglobal on video.

9. Boeing poised for crucial phase in 747-8 test effort

Boeing underwent a crucial phase in the 747-8 flight-test effort as it prepares to start trials of the -8I passenger variant including maximum-brake-energy demonstration on the freighter version, plus an analysis of back-to-back wake vortex testing to determine whether the stretched 747 will be approved in the same separation category as the smaller 747-400. Four 747-8Fs were engaged in the flight-test programme, which began in February 2010.

 

 

10. Test pilots extract stranded Alrosa Tu-154

Pilots in Russia extracted an Alrosa Tupolev Tu-154 from a remote military airfield, six months after an in-flight power loss and emergency landing left the aircraft stranded.

The landing damaged the trijet, when it overran the 1,300m runway at Izhma in the Komi republic, and the short field meant that it could not easily be flown out again.

Was Lucky Lindy really first across the Atlantic?

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How about reverse engineering a 727?

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My colleague Stephen Trimble today blogged over on The Dew Line that Iran plans to reverse-engineer its very own Lockheed Martin RQ-170 from the example of the US stealth drone its forces apparently shot down earlier this month. As Stephen suggests, good luck to them.
Your correspondent back in October joined Boeing for a tour of European 787 suppliers, and was treated to a memorable presentation by Dassault Systemes chief executive Bernard Charles. Making the point that modern 3D digital design software has transformed our concept of reality, Charles observed that if Chinese counterfeiters were to buy a 787 and attempt to copy it, they would never succeed - but if they got ahold of the digital plans, they could do it.
That remark left one programme insider none too bemused; working from digital plans would clearly be miles better than trying to measure up all the parts with a pair of calipers, but still doesn't take into account the fact that the machine's measurements are only one aspect of its true essence, which arguably resides in its 18 million lines of computer code as much as its shape and size.
The incident brought to mind a real example of Chinese reverse engineering, which followed president Nixon's opening of the door to "Red China" back in 1972. One early goodwill gesture, Flight is told, was the sale to Beijing of three Boeing 727s. On a subsequent visit, Boeing legend Joe "father of the 747" Sutter was shown a fourth aircraft, which certainly looked like a 727.
But, on inspecting the machine, Sutter found such incongruities as a control yoke that would have taken the strength of three gorillas to move and urged the Chinese not to attempt a flight. Thankfully they heeded his advice.






Tier 1 suppliers: on the way out?

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Interesting thought from GKN technical director Rich Oldfield - the aerospace industry is evolving to leave no room for tier 1 suppliers, those providers of major structural components and systems to airframers like Airbus and Boeing.
What Oldfield is anticipating is an increasing reliance by the airframers on what he calls "super tier 1s", who are responsible for major design work and become so integral to any programme as to be indispensible partners for the life of the programme. Electronic systems suppliers are a good example, he notes; already, much of what they provide is a "black box" as far as the airframers are concerned.
Aerostructures are reaching a similar stage, as production processes that are developed by, and belong to, suppliers become as much a part of the finished aircraft's performance as the shape and size of the components.
Thus, reckons Oldfield, companies will either become super tier 1s, or be tier 2s providing subsystems or individual components. The tier 1 as we
And, he says, there's no reason why any particular supplier can't operate on both levels. GKN already does that, he says, noting that its $500 million of business with Airbus makes it a partner, while at $70 million it is really a tier 2 to Boeing.
That Boeing business can certainly grow, he adds, based on capabilities being developed to supply Airbus.

Making aircraft, good; flying them, less so

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Further evidence of a surging civil aviation economy comes from systems supplier Goodrich. Overall, sales were up 16% at $2.03 billion and pre-tax profit gained 34.5% to $300 million, and for the full year Goodrich forecasts a 15% increase in large airliner original equipment sales, assuming Boeing 787 and 747-8 schedules are maintained.

Meanwhile, on the operating side of the equation things are less cheerful. The world's mightiest - or at least biggest - airline, United-Continental, saw rising oil prices add $1 billion to its quarterly fuel bill to slash pre-tax income by 22.5% to $660 million despite an 8.7% rise in operating revenue, to $10.2 billion. And, earlier this month, American Airlines parent AMR swung to a $162 million pre-tax loss for the third quarter, reversing a $143 million profit recorded the year-prior, as its fuel bill rose 41% year-on-year.

Are both of these trends sustainable?

Innovation where it matters most

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Full marks to Lyon-Saint Exupery airport for deploying technology to good effect. Noting that "wait times to pass through security are often a source of stress for passengers", the airport now features signs on the public side of the concourse indicating estimated time from the end of the queue to the security gates, to help passengers better manage their time in the airport.
The system - installed at security point 15 (Terminal 1) and set to be airport-wide by year-end - uses several cameras that count the number of passengers in the queue; an algorithm calculates the estimated time to reach the departure lounges.
Why has nobody thought of this before?

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