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Aviation History
1982
1982 - 0343.PDF
Some will recover. Will some perish? INTERNATIONAL Week ending 13 February. 1982 Number 3797 Volume121 tSSN 0015-3710 Published in association with Aeroplane Monthly and Airports Internationa/ by IPC Transport Press Ltd, Quadrant House, TheQuadrant, Sutton, Surrey SM2 5AS, England. World'5 first and only complete aeronautical weekly (£) Copyright IPC Business Press 1982 Founded 1909 Second-class postage paid at New York, NY, and additional entries. Editor David Mason Associate Editor Peter M i ddleton Assistant Editor Tom Hami 11 Air Transport Editor David Learmount AirTransport editorial Chris Kjelgaard BSc Defence Editor Graham Warwick BSc Defence editorial Mike Gaines Technical Editor David Velupillai BSc Technical editorial Richard Whitaker BSc General Aviation Cliff Barnett. Ian Parker BSc News Ian Goold, Julian Moxon BSc Production Editor Philip Jarretl Sub-editor Graham Cowell Art Editor Colin Paine Pictures and Photography Stephen Piercey Technical Artists Frank Munger, John Marsden Publishing Director John Crookshanfc Editor-in-Chief J. M. Ramsden Advertisement Manager Trevor Barrett Assistant Advertisement Manager Colin Kilkelly Senior Advertisement Sales Executive Michael Elmes Advertisement Sales Executive Sarah Beck Advertisement Production Howard Mason Advertisement Sales—France Pierre Mussard, 19 Rue Victor Pauchet, Vaucresson, France. Telephone: (331) 741 9510 Advertisement Sales—Italy Romano Ferrario, Etas Kom- pass SpA, Via Mantegna 6, 20154 Milano, Italy. Telephone: (2) 347051. Telex:37342 Kompass Advertisement Sales—USA (East Coast) Herb Salazar, US Sales Manager; Joe Connors, Advertisement Sales Executive, IPC Business Press, 205 East 42nd Street, New York NY 10017. Telephone: (212) 867 2080-Tel ex: 238327 Advertisement Sates—USA (West Coast) John Tidy, IPC Business Press, 2656 Vista del Oro, Newport Beach, CA 92660. Telephone: (714) 760 9438. Telex: 238327 Subscriptions Manager A. Walden Telephone England (0444) 59188 (UK and overseas sub scription rates and agents canbeloundinthis issue) Telephone 01-661 3315 (Display Advertisement Sales) 01-661 3500 Ext. 3809 (Classified Advertisement Sales) 01-661 3267 (Advertisement Production) 01-661 3321 (Editorial) Telegram/Telex 892084 BISPRS G lAgg Member 01 the Audit Bureau of Circulations NEXT WEEK 0 Flight visits three US airlines which are pioneering the use of simulators to replace flying training. # Our annual simulator census is the only published listing of active airline simulators. THE US major airlines have published their 1981 results. No one is surprised to find that they are bad, but just how bad they are is a shock. The US Air Trans port Association says that total operating losses are a record, and that the 16 largest member airlines together owe $10,100 million in long-term debts, including leases. Creditors must be in despair. Loan renegotiating is becoming a worldwide pastime for those who lend to airlines, and the normally prosperous United States is as badly affected as any other coun try. No creditor likes to see a bank ruptcy, because it involves writing off debts. But today many are go ing to unprecedented lengths to keep airlines alive. Whether they will succeed, or are simply post poning the catastrophe, remains to be seen. An increasingly common ar rangement is the renaming of a debt as a "nonperforming asset". This acknowledges that an airline, if it is to survive, cannot meet in terest repayments, let alone capi tal repayments, so the carrier is temporarily released from both. Since financiers dislike assets which do not perform, and norm ally take care not to invest in them, one can deduce from the lenders' actions only a belief that anything is better today than call ing in the receiver. They may be right, since recession is a bad time to sell airline assets. That assumes, of course, that the airline has any thing left to sell which is not already mortgaged. Braniff would probably not cover its debts today if it sold every thing it owned. It shows a 1981 loss, but much smaller than its 1980 loss. Figures for the last year show that Braniff is the world's most efficient airline in terms of passen ger-miles per employee, and its new leader Howard Putnam is still introducing cost cuts and new, aggressive marketing tactics. These steps might be seen by a creditor as adequate reasons for further extending already extended loans; but the basic reason for doing so is that tomorrow simply must be better than today. Braniff must hang on until the general economy turns upward. And when business does start to improve, Braniff's share of traffic increase will have to be large, or its creditors will cut their losses and sell the car rier's assets to one or more of the new airlines trying to break into the deregulated expanding market place. Braniff is only an example, though a clear one, of the state in which many airlines find them selves. Pan American also has an aggressive new leader, but its operating losses last year were almost unbelievably large, and the last quarter results were appalling despite Ed Acker's new tactics and cost cuts. It is repetitive to say it, but overcapacity is the main prob lem. If recession were the only cause of this overcapacity, then it would take only an end to the re cession for the airlines' troubles to be over. But the overcapacity was caused also by over-ambitious ex pansion, and the only answer to that is a trimming down, which now appears to have started on the European side of the Atlantic. The final lurch of Laker Airways into the chasm—if final it turns out to be—could well be only the first of a handful that punctuate the early months of 1982. If more go, the best that can be said is that they will bring the re maining available seat capacity into better balance with the num bers of passengers shopping for them. The really skilful managers in 1982 may prove to be those who can persuade their bankers to hold on for longest, until the field is slimmed down to leave the sur vivors with more of a chance. IN THIS ISSUE World News Air Transport Defence General Aviation Business Private Industry Avionics Spaceflight Propulsion BOEING'S BIG, QUIET 737-300 HELICOPTER INDUSTRY BATTLES RECESSION Books FLYING ENSTROM'S SHARK Letters Straight and Level 330 332 336 340 341 347 348 350 352 353 357 362 370 378 379 Front cover: The Westland 30 represents the front line of helicopter development in the world of commuter aviation. Its very-short-haul capability has endeared it to Airspur of Los Angeles, which will undoubtedly be the first of many operators.
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